Definition

Pay per click (PPC) is an online advertising model in which advertisers pay a fee each time their ad is clicked by a user. 

What is pay per click?

Pay per click is a method of buying visits to a website rather than earning those visits organically through search engine optimisation (SEO) or other forms of digital marketing. PPC is commonly used in search engine advertising, social media advertising, and display advertising to drive traffic to websites and generate leads or sales.

PPC ads are typically displayed on search engine results pages (SERPs), social media platforms, websites, and other digital channels where users are likely to encounter them. Advertisers select relevant keywords related to their products or services and bid on them to have their ads displayed when users search for those keywords.

With PPC advertising, advertisers only pay when their ads are clicked by users, hence the name “pay per click.” The cost per click (CPC) is determined by the bidding process and can vary based on factors such as keyword competitiveness, ad relevance, and ad position.

PPC offers several benefits for advertisers, including immediate visibility and traffic generation, precise targeting options, measurable results, and the ability to control ad spend and budgets in real-time. It is a highly scalable and cost-effective advertising channel for businesses of all sizes and industries.

Example of pay per click

Let’s say you own a small online shoe store and want to increase traffic to your website. You decide to launch a PPC campaign on Google Ads.

• Setting up the campaign: You create an ad campaign targeting users searching for “running shoes” and “athletic footwear.” You set a daily budget of $50 and bid $1 for each click on your ad.
• Ad creation: You create engaging text ads with compelling headlines and descriptions, highlighting the benefits of your running shoes.
• User interaction: A user sees your ad at the top of the search results and clicks on it to learn more about your products.
• Cost incurred: As the user clicks on your ad, you are charged $1 for that click. If five users click on your ad during the day, you’ll incur $5 in advertising costs.
• Website visit: The user is directed to your website’s landing page, where they can browse your collection of running shoes and make a purchase if interested.
• Tracking performance: You use Google Ads’ analytics tools to track the performance of your campaign and you adjust your bidding strategy and ad targeting based on the data.