Starting with the basics
Pay-per-click (PPC) advertising via Google (or Bing, Facebook, LinkedIn etc.) is essentially where you pay to put your adverts in front of people when they’re online. We’ll use Google as an example as it’s the most commonly used and the others work a similar way.
To buy advertising with Google you use a platform called Google Ads, formerly known as Google AdWords.
This platform lets you create those ads that appear at the top of your Google searches (search ads). It’s also where you can set up the visual ads that sometimes follow you around the internet (display ads), and the shopping ads that let you buy a product straight from a Google search (shopping ads).
For the purpose of this, we’ll stick with the most common form of Google advertising—search ads.
Setting up a PPC account
After setting up an AdWords account, you can set up campaigns for various things you’d like to advertise. If you were a pet shop, you might set up campaigns for ‘fish tanks’, ‘hamster cages’, or ‘funny costumes for dogs’.
Once you have your campaigns, you create ad groups to fill them. This is where you categorise related products into groups. So your ‘fish tanks’ campaign might have ad groups such as ‘tank sizes’, ‘tank varieties’, or ‘tank cleaning products’.
The next step is choosing and adding keywords and phrases that are relevant to each ad group. So for ‘tank sizes’ your keywords might be: ‘10 litre fish tank’, ‘20 litre fish tank’ and ‘50 litre fish tank’.
These keywords are the backbone of your PPC campaign. They’re what trigger your advert when someone searches for that term on Google.
Obviously, for that to happen you also need an advert. So when you’ve decided on your keywords, you’ll write an advert that links to them.
You can create multiple ads for each ad group. One for your ‘fish tank’ group might read like this:
There’s a lot that goes into crafting a successful ad, but that’s a conversation for another time.
You might be thinking, “yes but how can Google show every single advert for 10 litre fish tanks?”.
That’s a good question. The answer is that they rank your ad, and based on that rank, they decide if they’ll show your ad when someone searches for that keyword.
This is where bidding enters the picture. You bid with your competitors for each of your keywords. The more you bid on each keyword, the more chance it has of pushing one of your ads to the top of somebody’s search results when they google that keyword.
The more competitive a keyword is, the higher you’ll have to bid to get your ad seen.
There’s more to it, but that’s the basics for now — more on this to follow…
Pay per click
If you’re wondering what happens next then the clue is the name. Google displays your ad to the relevant people, and you pay for each time someone clicks on your ad. The amount you pay will depend on how much you bid.
It’s also important to remember that you won’t always pay your maximum bid amount, you’ll just pay enough (up to your bid amount) to get your advert seen.
You don’t need to worry about setting a high bid for a competitive keyword, going to bed, and waking up to find you’ve spent millions. Sure, you can spend as much as you want, but you can also add a daily budget, which AdWords will stick to. That way you know you’ll only ever spend a certain amount.
The trick is getting your ad seen within your budget. That comes through a mixture of research and ongoing optimisation.
How to spend less money
The amount you bid is only one part of the story when it comes to Google deciding how highly to rank your ad (how high up in the listing it appears). Another important factor is something called quality score.
Simply put, the quality score — which appears as a number out of ten — of your keywords is Google’s way of judging whether or not the keyword you’re bidding on relates to the page your ad sends people to.
If your keyword is ‘fish tank’ and your ad sends customers to a page selling holidays in southern France, you’re going to get a low quality score.
This is important because if you have a high quality score — over 7/10 — then your ad will appear higher in the search than people who have bid more than you but have a low quality score. Conversely, if you have a low quality score then you’re going to have to really pay up if you want to appear anywhere near the top of a search.
For this reason, it’s imperative that you pay as much attention to the page you send people to — your landing page — as you do the ad itself. It’s often worth creating specific landing pages for your ads to make sure that they’re as relevant as possible.
Your return on investment (ROI)
Nobody wants to spend money on Google ads without getting something in return. So the question is: how can you measure your ROI?
First you need to figure out what you want to track as a conversion. Think: what action do I want customers to take? For our example, let’s say it’s purchasing a fish tank.
You now need to put a number to how much these conversions are worth to you. Let’s say your average fish tank sale makes you £30 profit.
Once you know what conversions you want and how much they’re worth to you, you need to set up your ads to track those conversions. This way, once data starts to accumulate, your AdWords account can start to tell you how much you’re paying for each conversion.
In Google lingo, this is called Cost Per Acquisition (CPA).
Now here’s the important part. Your CPA needs to be less than your profit per conversion. If you make £30 profit per fish tank, you don’t want to pay Google £35 for every conversion.
That’s why one of your key goals with your PPC account should be to continually optimise, until your CPA still leaves you with a healthy profit and ROI.
Ad group — more defined than a campaign, collects a group of similar keywords.
Bidding — how much you’re willing to pay Google for each of your keywords, so that your ads appear ahead of your competition’s.
Campaign — a group of something you’ want to advertise.
Cost Per Acquisition (CPA) — how much it has cost you on AdWords, on average, for each conversion.
Keywords — the words you choose that you think people looking for what you’re selling might type into Google. These form the basis of your PPC campaigns and ads.
Pay-per-click (PPC) — paid advertising on platforms such as Google.
Quality score — the score out of ten that Google gives you to rate how relevant your keyword is to your landing page.
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