Paid Search (PPC) Defined: What, When, Where, How, Why?

by on January 14, 2013

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Paid search is increasingly becoming a more important aspect of search engine marketing, as more and ppc-defined-what-where-when-how-whymore people use the Internet to research products and services before making a purchase decision.   

What is Paid Search (PPC)?

Paid search marketing is the practice of increasing traffic to a website by paying for ads on search engines.  It is also referred to as PPC (pay-per-click) and CPC (cost-per-click), as most ads on search engines are sold as PPCs/CPCs.  

When Should Paid Search Campaigns be Run?

Organic SEO is crucial to getting your page to show up in search engine results, but benefits of good SEO practices do take time to materialize. Paid search enables advertisers to pay to reach their target audience.  If you are a business in the beginning stages of building your online presence, paid search is a great way to start driving traffic to your web page immediately. 

That being said, if you’re just starting out using PPC, it’s incredibly important that you budget appropriately, and doing so depends on having a clear understanding of what the goals are of your campaign.  While most businesses pay for paid search on a PPC or CPC basis, some pay for ads based on the number of impressions the ad gets instead (campaigns where brand awareness is the goal).  And so, a direct response campaign would typically have a lower CPA than a branding/awareness raising campaign. 

Bottom line – make sure you base your cost per acquisition / cost per conversion on the customer’s lifetime value as well as the goals/objectives of the campaign. 

Where are Paid Search Campaigns Most Effective?

Understanding what you specifically want to achieve (besides increased revenue) with your PPC ads will help you determine where you will be most effective.  In order to figure out what your goals are besides increasing revenue ask yourself these three questions: 

  1. If you have a physical store location, are you trying to get people to come in and make a purchase?
  2. Is your business an eCommerce site and trying to get people to purchase your products online?
  3. If you offer a service (home repair, pizza delivery, etc.), are you trying to get people to make an appointment either on your site or by phone or other means?
  4. Are you a newcomer on the scene and trying to build brand awareness for your business?
  5. Are you some combination of all of the above?

Once you’ve figured out what your goals are, you will be better at designing ads to meet them.  For example, if you’re trying to get someone to come into your store and make a purchase you will be running ads promoting your store, your product assortment, promotions or specials and link ads to your business listing to display the store’s location, business hours, and other relevant information to help visitors find and want to visit your store.  If you’re an eCommerce site, your ads will describe your products, special offers or discounts and provide information on where they can be ordered online.  

Where your PPC ads are displayed in SERPs (search engine results pages) is based on a number of different factors including: 

  1. Bid level for the ad (how much you are willing to spend for each impression)
  2. Quality score (determined by Google and Bing differently, a quality score is given to each PPC ad and is based on whether or not the ad seems like it is successful)
  3. Competitive keywords (are you bidding on and using keywords that people are searching for?)
  4. Landing page quality (the higher the bounce rate on a landing page, the lower the quality of that page)

Each time a relevant search query is entered into a search engine an auction automatically takes place between ads that have bid on keywords included in the query.  The auction winner is the ad that has the highest bid, quality score, most competitive keywords and lowest bounce rate on for the landing page. 

How to do Paid Search:

A lot goes into building an effective paid search campaign. You should consider the following four fundamentals before you start: 

1. Keywords

Bidding on the right keywords is extremely important in running paid search ads that will reach your target customers.  When doing keyword research to determine which keywords to bid on, make sure you are looking at keywords in every stage of the purchase funnel.  Say for example you are an eCommerce selling organic foods in bulk; your funnel might look something like this:

sales-funnel-paid-search

Depending on your goals, you may want to be bidding on keywords that will reach customers at some or all points in the sales funnel in order to make sure you are reaching all of your potential target audience.   

Some of your customers are already aware, of your product, they’re interested in it, and they have a desire to own it, you target those customers with the most specific and branded terms; whereas some customers don’t even know what they are looking for but they are aware of a need they have, and so you target those customers with more general terms, that they will more likely be using to locate relevant information.  

2. Landing Pages

Once someone clicks on your ad you want to make sure that they are taken to a landing page that provides them with more information that builds on what the ad copy presented.  If your ad is about printers, then the landing page should provide additional information about those printers, with an easy way for customers to purchase them.  

You can tell how successful your landing pages are by looking at the bounce rate.  That’s the rate at which visitors leave or “bounce” from your page without going beyond what they see there. In other words, a single page visit, possibly indicating lack of interest, is considered a bounce. If the bounce rate is high, that is an indicator that visitors who are clicking on the ad are not finding what they expect to find post-click.  Either the ad copy or the landing page content need to be modified to ensure continuity of experience and expectations for the visitor. A high bounce rate also is costly as it results in a low quality score (quality scores are based on metrics having to do with traffic to your site, using the logic: the more time spent on site = the more relevant and useful the content is), and will lead to a higher cost per click for your campaign. Beyond just looking at conversions, the longer average time spent on page and higher the number of pages visited per visitor, the more likely your landing page is doing its job.  

3. Ad Format

How an ad looks and where it is displayed has a huge impact on how effective it will be. Google AdWords currently offers several different types of ad extensions and functionality to accommodate the different types of businesses and goals that rely on paid search as a marketing channel. Here are six of them:  

  1. Remarketing: companies can track visitors with a cookie and display relevant banner ads around the web until the customer clicks the ad
  2. Ad Sitelinks: displays the usual listing for your business along with 10 additional links you can create to encourage visitors to more easily find and engage with relevant content on your site, for example: service page, contact page, product page, blog, etc.
  3. Social Ad Extensions: displays who has added your site on Google+, acts somewhat as a review and increases credibility.
  4. Map/Location Ad Extensions: best for local businesses and local paid search in that it displays your company address and phone number in local searches, and is displayed only to customers in your target area.
  5. Chat Ads: pop-up chat window that asks visitors to a site if they’d like to chat with a sales person.
  6. Click-to-Call Ads: perfect for mobile paid search advertising as this ad format allows customers to call a business directly with just a click of a button.
4. Testing, Testing, Testing!

No matter which keywords, landing pages, or ad formats you decide to go with in your paid search campaigns, you need to make sure that you are testing keywords and ad copy to see which ones are most effective at driving traffic and which ones aren’t giving you any return on your investment.  

Why do Paid Search?

Even if you are doing onsite SEO, if your site isn’t being displayed in the first page of Google search results (for relevant searches), the odds of someone finding your product/service, decreases significantly.  With a paid search campaign you can pay for your ads to be displayed on the first page of Google search results pages.   

To learn more about why paid search is so beneficial, check out this FREE eBook The Why Book of Paid Search.  

Related Posts
8 Basic Steps to Setting Up Your First PPC Campaign
5 Must-Do Tips for Awesome PPC Results in Q4
PPC Quick Tip – Test Ad Copy for Improved ROI

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