Pay-per-click marketing is an advertising model wherein advertisers pay publishers, such as Google or Facebook, a fee each time someone clicks on their ad. Because businesses only pay a fee (known as the cost-per-click or CPC) when a user clicks on their ad, it is regarded as a very cost-effective form of marketing that generally yields a good return on investment.

Here are some of the most popular PPC marketing platforms:

• Google Ads
• Facebook Ads
• Microsoft Ads
• YouTube Ads
• LinkedIn Ads
• Amazon Ads
• Etsy Ads
• Yelp Ads

Regardless of the advertising platform, chances are, you see PPC ads every day if you use a smartphone or computer. Paid search ads, such as Google Ads, appear at the top of search results pages as sponsored content. Whereas, paid social (including shopping ads), are typically placed within other content, such as an Instagram feed or Etsy product listings.

PPC and SEM are frequently confused, and it’s easy to understand why. While PPC  (pay-per-click) advertising falls under the umbrella of SEM (search engine marketing), SEM is not the same as PPC. The main difference is that PPC is paid traffic and SEM covers a variety of strategies, such as PPC and content marketing.

Here’s the difference between PPC and SEM in a nutshell:

• Pay-per-click (PPC) refers to sponsored advertisements that usually have the word “Ad” and link to promotional landing pages.
• Search engine marketing (SEM) is an umbrella term for strategies including search engine optimization (SEO) and PPC. It encompasses activities that aim to improve a brand’s visibility and results on search engines.

For additional insights, learn more about how to grow your business with SEM.

PPC advertising has become a favorite advertising channel for businesses small and large, and for good reason. Not only is PPC advertising generally considered very cost-effective, but it’s one of the few ad channels that you can build and manage in-house, it doesn’t require a large investment, and it’s both measurable and trackable–a rarity in the world of advertising.

Here’s a quick rundown of some of the advantages of using pay-per-click marketing:

• Budget flexibility. Advertisers can allocate a budget for PPC campaigns. Depending on your results, you can quickly scale up your ad spend or take a break and stop spending.
• Measurable and trackable. PPC ad results can be tracked and measured in Google Ads and Google Analytics. These tools provide an overview of real-time clicks, conversions and impressions.
• Targeting options. Users can target specific audiences based on their search behavior, browsing history, demographic data, etc. By testing and experimenting with various targeting options, you can maximize impressions and reach specific audiences.
• Stay ahead of the competition. Target brand-related or competitor-related keywords to prevent your rivals from dominating the search engine results pages (SERPs).
• Access to marketing data. Data collected from PPC campaigns can inform your SEO and content marketing strategy.

Additionally, while most PPC platforms involve a bit of a learning curve, it’s entirely possible to learn how to create great campaigns with platforms like Google Ads and Facebook Ads thanks to the abundance of helpful tutorials and video content available for free online.

Wondering what is foundational to building a successful paid search campaign? Let’s look at these four aspects to get you on the right track.

Keyword Research

Paid search platforms, such as Google Ads and Microsoft Ads (formerly Bing Ads) depend on keywords. These keywords serve as triggers to display relevant ads. For example, if someone goes to Google and searches for bicycle rentals in San Diego, it will display ads from businesses that input keywords such as “bike rentals in San Diego” or “bicycles for rent in La Jolla.”

Keywords are the main building blocks of paid search campaigns, so it’s worth taking the time to create a keyword list closely related to your products and services. Besides the basic search terms, it’s important to note that long-tail keywords make up 70% of all search traffic. Broaden your list with specific and lengthy search terms because these are often more affordable and less competitive.

Choose keywords with a high click-through rate (CTR), cost-effective cost-per-click (CPC) and many conversions to see positive results.

Over time, you’ll have data on cost-effective and profitable keywords for your campaigns. Based on the data, you can grow and refine your keyword list (e.g., with negative keywords) so your campaigns will continue to display ads to the right users and thus be effective.

Ad Groups

A PPC ad won’t always be an excellent match for the keyword you’re targeting. Therefore, advertisers must make ad groups that house related keywords, landing pages and text ads.

For the best results, ads within the group must have a consistent message. Ensure that the copy aligns with users’ search intent to improve your click-through rate.

For example, a customer searched for “sushi new york” and saw a PPC ad linked to a landing page of your sushi restaurant in the area. You’re more likely to convert searchers because your campaign has integrated keywords and landing pages.

Ad Auctions

Each time Google Search has to decide which ads will appear on the search results, an ad auction occurs. This is how Google determines which of the relevant ads to display. In addition to those that are the highest bidder, Google also considers factors such as ad quality to determine whether an ad will lend to Google’s user experience.

The three main factors that will determine whether your ad will be displayed and its position include:

• Bid – This is the maximum price you’re willing to spend for a click on your ad. Bids are flexible and adjustable at any time, but the amount you end up paying per click is usually cheaper.
• Ad Quality – Google evaluates the Quality Score (QS) of your ad based on its relevance and usefulness to searchers. Advertisers with higher Quality Scores can get a lower cost-per-click at better positions. You can view the Quality Score on your Google Ads account.
• Impact of ad extensions and ad formats – Having additional extensions can increase your click-through rate and ad rank once you create an ad. Some examples of extensions are your location, contact number, app and promotions.

Quality Score

Quality Score refers to Google’s rating of the relevance and quality of your PPC, ad copy and landing page.

This metric is measured on a scale of one to ten, with eight to ten considered very good. A good score will increase your ad rank and decrease your cost-per-click.

The Quality Score is dependent on your click-through rate, ad relevance, landing page experience and your historical Google Ads account performance. Overall, what Google is looking to determine is whether or not your ad provides its users with a good user experience.

After launching your PPC ads, frequently monitor your campaigns and analyze their performance.

Keep adding industry-related keywords and experiment to find out which ones will drive results for your business. Not all keywords will perform well, so pause underperforming keywords with negative results to avoid wasting your ad budget.

Splitting your ad groups into smaller, more relevant clusters will also help you produce targeted campaigns, boosting your CTR and Quality Score.

Visitors will bounce if your landing page isn’t compelling, even if your ads are optimized. A good tip is to keep improving the content and calls to action (CTAs) in your landing pages to reduce bounce rates.

While PPC ads are generally considered affordable, with the average cost per click hovering around $2 for Google Ads and $1.86 for Facebook Ads, costs can vary greatly from around $1 to over $30 per click. This is because the cost per click (CPC) depends on a number of factors, such as your chosen PPC platform, keywords (or audience in the case of paid social), industry, amount of competition, and ad quality.

Essentially, the rate you pay for the click is based on Google’s formula (Ad Rank of the ad below yours) / (your Quality Score) + $0.01. For example, if the Ad Rank of the person below you is eight and your Quality Score is four, you can expect to pay $2.01.

Your Ad Rank will be calculated based on the formula: (your maximum CPC bid) x (your ad’s Quality Score). For example, an ad with a maximum bid of $2 and a quality score of 15 will have an Ad Rank of 30.

In other words, having a better QS means you could pay less per click and earn a higher position in search engine results.

Keep in mind that not only can CPCs range in price, but what matters more than CPC is your ad campaign’s return on investment or return on ad spend (ROAS).

Looking to find the right platform or tool for your business? There are several options to choose from when it comes to PPC marketing tools or platforms. To determine the best option, consider your needs and compare the features of each device.

Semrush has a PPC keyword tool to identify the best keywords based on cost-per-click, volume and other vital metrics. You can also manage and optimize keywords in your list and access data-backed keyword suggestions.

PPC marketers who want one tool that covers all the basics should consider Google Ads. The software makes it easy to specify your goal, create campaigns and set an ad budget. Done right, your ads will quickly go live on Google Search and Maps. Google also has launched popular PPC marketing tools such as Google Search Console and the Google Display Network.

In addition, tools such as SpyFu let you know what competitors are doing so you can get ahead. You’ll be able to find competitor keywords, track their campaigns and browse their Google ads.