What is Pay Per Click (PPC)?

Pay per click (PPC) is an advertising model where you pay when someone clicks your ad, not when it is shown. It is the standard model for search ads: you bid on keywords, your ad can appear on the results page, and each click costs you money. PPC is often used as another name for paid search.

How does pay-per-click advertising work?

On Google Ads, the process runs like this:

1. You choose keywords and write ads. Each ad points to a landing page.
2. You set bids and a budget. A bid is the most you are willing to pay for a click. The budget is the average you want to spend per day.
3. An auction runs for every search. Google says the auction is "not like an art auction where the highest bidder always wins." It ranks ads on bid, ad and landing page quality, minimum quality thresholds, competition and the context of the search.
4. You pay when someone clicks. Your actual cost per click is often lower than your bid, because you pay only what is needed to hold your position. Google filters out invalid clicks, such as accidental or automated ones.

Quality matters as much as money. Google states that a competitor can bid more than you and still rank lower if your ad and landing page are better. See quality score.

How do PPC budgets work?

Your daily budget is an average, not a hard cap. Google says most campaigns can spend up to two times the average daily budget on a busy day, and will not charge more than 30.4 times the daily average in a month. See ad budget.

Which platforms use pay per click?

• Google Ads shows search ads on Google results pages and across Google's network.
• Microsoft Advertising, called Bing Ads until 2019, shows ads on Bing and partner search engines such as Yahoo and DuckDuckGo.
• LinkedIn Ads can charge per click when you use manual bidding. Its automated options, maximum delivery and cost cap, charge per thousand impressions instead. For B2B teams, its targeting options include job title, job function, seniority, company name, company size and industry.

Many social and display platforms also sell on cost per thousand impressions (CPM), so check how each campaign is billed before comparing costs.

How do you get started with PPC?

• Start with buying-intent keywords. Bid on searches that describe a need, such as "CRM for small sales teams", before broad research terms like "what is a CRM".
• Add negative keywords. Google Ads lets you exclude search terms, such as "free" or "jobs", so your ads don't show for searches that don't fit your offer.
• Match the ad to the page. The landing page should answer exactly what the ad promised.
• Track conversions, not just clicks. Connect demo requests, sign-ups and pipeline to your campaigns so you can see cost per lead, not only cost per click.
• Review search terms weekly. Cut terms that spend without converting and add the ones that work.

What are the pros and cons of PPC?

Pros: results start as soon as ads are approved, you only pay for clicks, and you can target searchers who are already looking for a solution.

Cons: traffic stops when spending stops, you compete with every other bidder on the same keywords, and campaigns need regular management to avoid wasted spend.