Pay-Per-Click or PPC which is its acronym is a model of internet marketing in which advertisers pay a fee each time one of their advertisement is clicked. Additionally, it is a way of buying visits to your site, rather than attempting to earn those vists organically.
Search engine advertising is one of the most popular forms of PPC. It allows advertisers to bid AD placement in a search engine's sponsored links when someone searches on a keyword that is related to their business offering. For instance, if we bid on the keyword "PPC software", our AD might show up in the very top spot on the Google results page.
Every time our ad is clicked, sending a visitor to our website, we have to pay the search engine a small fee. When PPC is working correctly, the fee is trivial, because the visit is worth more than what you pay for it. In other words, if we pay $3 for a click, but the click results in a $300 sale, then we’ve made a hefty profit.
A lot goes into building a winning PPC campaign: from researching and selecting the right keywords, to organizing those keywords into well-organized campaigns and ad groups, to setting up PPC landing pages that are optimized for conversions. Search engines reward advertisers who can create relevant, intelligently targeted pay-per-click campaigns by charging them less for ad clicks. If your ads and landing pages are useful and satisfying to users, Google charges you less per click, leading to higher profits for your business. So if you want to start using PPC, it’s important to learn how to do it right.
Google AdWords is the single most popular PPC advertising system in the world. The AdWords platform enables businesses to create ads that appear on Google’s search engine and other Google properties.
AdWords operates on a pay-per-click model, in which users bid on keywords and pay for each click on their advertisements. Every time a search is initiated, Google digs into the pool of AdWords advertisers and chooses a set of winners to appear in the valuable ad space on its search results page. The “winners” are chosen based on a combination of factors, including the quality and relevance of their keywords and ad campaigns, as well as the size of their keyword bids.
More specifically, who gets to appear on the page is based on and advertiser’s Ad Rank, a metric calculated by multiplying two key factors – CPC Bid (the highest amount an advertiser is willing to spend) and Quality Score (a value that takes into account your click-through rate, relevance, and landing page quality). This system allows winning advertisers to reach potential customers at a cost that fits their budget. It’s essentially a kind of auction. The below infographic illustrates how this auction system works.