What Is Pay Per Click and What is the Benefit of PPC?
Pay-per-click or PPC is a commonly used advertising model in online campaigns which helps to drive traffic to our website. It is the best way for advertisers to advertise because the advertiser only pays the publisher when their ads are clicked and not for impressions. For doing PPC campaigns the advertisers don’t have to invest much budget, PPC is the fastest way to drive traffic on your website rather than the organic way. PPC model is the very mandatory part of digital marketing.
When you think of PPC you might have the following questions
How does PPC work?
PPC calculations
What are the advantages of PPC?
How does PPC work?
PPC is an online advertising model in which advertisers get a fixed amount whenever the ads get clicked, the main aim of pay per click campaign is to drive traffic to sites and to take action against users to buy their product or services. Many people think PPC is an only online payment method but it’s not true PPC is different from PPM (payment per thousand) and PPA (payment per acquisition) in PPM the advertiser has to pay a fixed amount for every thousand impressions the main disadvantage in this is that the advertiser doesn’t know the exact amount they have to pay for each visit. In PPA the advertiser has to pay for every action that the user takes like downloading any app, therefore, it is too costly than PPC.
The most popular PPC advertising platforms are Google Ads, Microsoft Advertising, and Facebook Ads, however, given the volume of searches and number of options, Google is by far the most valuable for any PPC campaign.
There are 3 primary types of Google ads, each of which with its PPC rates and efficiency:
- Search Network – these are text-based ads that show on Google search results, like sponsored links, shopping page ads, and results in the shopping banner.
- Display Network – typically image-based ads that are displayed on the websites your audience visits, usually in the form of a banner, sidebar, or footer image.
- Video – these are video-based ads that feature before, during, or after YouTube content
PPC calculations
- CPC (cost per click): CPC is the fixed amount paid by advertisers for each click on their ad. The calculation for CPC is
CPC = cost ÷ clicks
CPC = (CPM ÷ 1000) ÷ CTR
CPC = conversion rate x CPA
- CTR (Click-through rate): CTR is the percentage by which we get to know the users who clicked on the ad out of the total number of users who have seen the ad. Calculation of CTR
CPC = clicks ÷ impressions
CTR = (CPM ÷ 1000) ÷ CPC
- Impressions: Impressions are the views that the advertisement receives, whether the users click it or not.
- Segmentation: Segmentation helps the advertiser to segment your audience in a proper way so that the selected audience will see your PPC campaign. PPC campaign gives you a lot of options to select your audience like age, location, gender, etc. Doing this will help you to pay only for the clicked users which can be a golden chance to become leads.
- Landing Page: The landing page is the webpage where users go directly when they click on your ad it is the first page of your website. The landing page decides whether the customer will stay or leave so the landing page should be creative, readable, and must have clarity, and the main point is the landing page should be downloaded within 3 seconds this gives your site plus point. There are many tools to make a landing page.
- Conversion: The term conversion is every purchase made by users after clicking on your ad. Conversions are also used as the most important metric in a PPC campaign. Conversion can be calculated by using this formula.
Conversion ratio = number of conversions ÷ web visits
- Frequency: Frequency is how many times your ad has been shown to every user during a given period it can be calculated by this formula.
Frequency = number of impressions ÷ number of unique users
What are the advantages of PPC?
- In a PPC campaign, the advertisers have to pay only for the clicks made by users on their website.
- With the help of PPC, we can identify which ad is working or not we can compare ads to see which ad is giving better results.
- PPC gives you detailed information about all your ad happening including your clicks, impressions, etc.
- PPC is the fastest way to drive traffic on the website and get leads.
- You get a variety of options in the PPC campaign to select your audience which gives a boost to reach your correct audience.
- In PPC you get full control of your budget and it also helps you to maximize your budget.
- PPC campaign gives options in where and when the ad will be shown and on which platform, you can also select location and time to show your ads.
- PPC campaigns can be done on any social network, search engine, and also by showing display ads.
