What is PPC?

PPC or ‘pay-per-click’ can be a powerful tool for driving targeted traffic to your website and achieving your business goals. You’ve probably already heard of PPC campaigns. However, before you dive straight into the world of PPC advertising, it’s essential to have a solid understanding of what it is, what it can do and what’s involved to achieve great results for your business.

In this guide, we’ll break down PPC in simple terms, explaining what it is and why it’s significant for your online presence.

What is pay-per-click (PPC?)
How does PPC advertising work?
How do I set up a PPC campaign?
What are the different types of PPC ads?
Which platforms can I use to create PPC ads?
Managing your PPC campaigns
Measuring your return
Ongoing PPC strategy and management
Key takeaways
PPC glossary

Before we get started, take a look at our PPC glossary to help you familiarise yourself with key terms you’ll encounter along the way.

Pay-per-click (PPC) is a form of online advertising where you pay every time someone clicks your advert. Done right, PPC is a cost-effective way to quickly reach relevant customers and generate leads.

Traditionally, only platforms that use cost-per-click (CPC) pricing models to charge for ad placements are classed as PPC. This includes Google, Bing, Amazon and similar search-focused platforms.

However, despite leaning towards impression-based pricing models like cost-per-mille (CPM), social media adverts often fall under the broader category of PPC advertising too.

Don’t worry though, in this guide we will explain all these different ad types.

How does PPC advertising work?

Both Google and social media ads operate on bidding systems where you compete for ad spaces. On Google, depending on the placement, you bid on keywords, products or audiences. On social media, you bid for ads to be shown to target audiences and in various placement locations such as newsfeeds or stories.

Where your ad appears, who sees it is and how much you pay is determined by your bid amount and quality scores (on social media quality scores are called relevance scores). These are affected by a variety of factors including ad and landing page relevance, engagement and quality.

How do I set up a PPC campaign?

The way you set up PPC campaigns differs slightly on every platform, but there are lots of similarities. Generally speaking, here’s what to expect:

Define your goals and objectives.
Research opportunities, whether that’s keywords and search volumes on Google or interests and audience sizes on social, know your niche and what it has to offer.
Create compelling ads.
Create highly converting landing pages.
Decide on budgets and build your campaigns.
Launch, monitor*, analyse and optimise.

*Make sure you’ve got correct tracking tags and conversion actions set up to allow you to monitor and optimise your campaign performance.

What are the different types of PPC ads?

You can create PPC adverts on various platforms, either completely text-based or with images and videos. Here are the four main types of PPC adverts:

Search

Search ads are the sponsored links that appear at the top of, or more prominently in, SERPs. You bid on keywords you want to rank for, then your ad appears when a user searches for them.

Here’s an example of two text-based Google Ads that appear when we search for ‘coffee equipment’.

The ads are the two sponsored links right at the top for Nisbets and Clumsy Goat. Each link takes you to a page on their website where you can buy coffee machines and espresso makers.

Nisbets and Clumsy Goat pay a fee when someone clicks the ad, whether they buy a coffee machine or not. This cost is taken out of the budget they have already set in Google Ads Manager.

Shopping

Shopping ads are product-based ads that include an image, title, price and store name. These are designed for e-commerce businesses.

Social

Social ads appear on platforms like Facebook, Instagram, TikTok, X (formerly Twitter) and LinkedIn. These ads are displayed to users within their social media feeds and timelines, while they browse or engage with social content. The ads come in various formats, including images, videos, carousels, and slideshows, and they seamlessly integrate into users’ social media feeds. Unlike Google ads, Social ads allow you to reach people who aren’t specifically looking for the products you offer.

Display

These are the adverts you see on other websites, platforms and apps. They are strategically placed, targeting specific audiences based on a range of criteria like demographics, interests, or browsing behaviour.

Remarketing

Remarketed ads are shown to those who have already engaged with your brand’s website or social channels. So the next time you visit a website and wonder why you’re suddenly inundated with related adverts, that’s why.

Which platforms should I use to create PPC ads?

Here are the most popular PPC platforms to consider.

Google

Google Ads (previously AdWords) is the biggest PPC platform in the world. With a market share of 28%, it allows you to create and manage various ad types like search, shopping and display all within your account. Bing (Microsoft) Ads offers similar functionality too.

Meta, TikTok, X for Business, LinkedIn

You manage social media paid ads within your account. Each social platform has its own ad manager tools, including:

Amazon Ads, eBay, Etsy

Again, you create PPC ads within your marketplace account – this applies to Amazon Ads, eBay or Etsy. Each one differs in appearance and features but offers similar bidding, targeting and reporting functionality.

Display Network

To launch a display ad campaign, you need to use an external publisher network such as Google Ads. These tools allow you to promote your ad on other websites where your audience is browsing, to help stay front of mind.

Why is PPC important?

Before you jump into launching a PPC campaign, let’s explore the benefits PPC could bring to your business.

Quick results

PPC adverts are one of the only digital marketing tactics where you can generate traffic and leads almost instantly. This makes it much faster than other strategies as you can see results and report back within hours of starting.

Effective customer targeting

PPC enables you to position your brand in front of relevant people. The level of targeting depends on the platform, but generally speaking, you can expect to refine your audience by:

Demographics: Age, gender, income, marital status, education.
Location: Cities, regions, countries.
Keywords: Popular search terms your target audience uses.
Placements: Where your ads appear e.g. websites, apps and videos.
Behaviours: Data-driven ads based on a user’s web activity.

Targeted ads ensure that clicks come from genuinely interested people, so you spend your budget in the right places. You’re paying for quality, over quantity.

Managing your PPC campaigns

You’ll only enjoy the benefits of PPC if your campaigns are effectively managed. This can be time-consuming and difficult to drive results without expert knowledge.

The following explains what is involved in PPC management, including which metrics to measure and which tools you need to track them.

What is PPC Management?

PPC management involves overseeing and continuously improving your entire PPC strategy. This involves everything from budgets and bidding to targeting and tracking, to ongoing optimisations and reports. It’s a crucial role because if your ads aren’t set up, adjusted and scaled correctly, they quickly become expensive for minimal return.

Measuring and tracking results

Accurately tracking PPC campaigns enables you to gain valuable insights. You’ll understand which ads work and which don’t, so you can make data-driven adjustments to achieve better results.

Two of the most important metrics to report on are return on ad spend (ROAS), which measures a specific ad campaign, and return on investment (ROI), which measures your overall profit from the wider investment.

Before we dive into these, let’s first explore the tooling you’ll need to accurately track your PPC campaign.

PPC tracking tools

There are various marketing tools and software you can use to monitor your campaign. Popular platforms like Google Ads, Meta and Amazon Ads all offer a suite of metrics including:

Clicks: How many clicks your ad receives.
Click-through-rate (CTR): The percentage of people who click your ad after seeing it.
Cost-per-click (CPC): The average cost for every click.
Impressions: Every time your ad is shown to a user.
Meta’s relevance score: This is used by Meta to determine how it delivers your ads. Ads are scored between 1-10, and they’re calculated based on positive and negative ad interactions.
Quality score: This is used by Google Ads only, to evaluate your ad’s quality and relevance. This determines how your ads rank in SERPs and how much you pay for a click.

External tools like Google Analytics 4 enable you to see what users do after they click your ad, and if they convert. You can set up a conversion (event) as anything you want, whether it be a sale, subscription, content download or form completion.

Measuring your return

To understand how much bang you’re getting for your marketing buck, you need to measure your return on ad spend (ROAS) and return on investment (ROI).

These two metrics determine if PPC is worthwhile for your brand. They’re often confused as the same thing, but they are different. Here’s a quick breakdown of each, with an example of how to calculate them.

The difference between ROAS and ROI

ROAS
ROAS measures your return on a specific ad campaign.

Calculation: ROAS = (ad revenue / ad spend ) x 100%

Example
(£2,000 ad sales / £500 ad spend) x 100% = 400% ROAS.
This means you earn £5 for every £1 you spend on ads.

ROI
ROI measures your overall profit from the wider investment. This means you need to account for additional costs like staffing and software.

Calculation
ROI = (total net profit / total ad investment) x 100%

Example
(£800 net profit / £500 ad investment) x 100% = 160%.

Your ROI is 160%, so you earn £1.60 for every £1 spent.

Ongoing PPC strategy and management

For your PPC campaign to be successful, you need to constantly test and optimise your ads to uncover what works and what doesn’t. Great performance takes time, analytical thinking and being reactive. Done right, you can achieve fantastic results for your business.

How to optimise your PPC campaign

You can’t create a PPC campaign and hope for the best. You need to analyse your campaign’s data while it’s live and adjust your ads accordingly.

There are several optimisations you can make to improve ad performance. These differ by platform but include:

Bidding strategy: Review your ad’s keyword performance and adjust your bids to ensure you’re prioritising the most relevant words and phrases.
Schedule: Review your ad schedule and adjust the timing your ads are shown to align with peak user activity.
Landing page: Test different layouts of your landing page to deliver the best user-experience. Use tools like GA4 to see if users engage or if they quickly leave your page. This will help you identify and overcome conversion barriers that are hindering your ad’s success.

Ad copy and creative: Experiment with different ad copy and creative to determine what resonates with your audiences.

Key takeaways

Hopefully, you now know the answer to “what is PPC?” but to summarise, here are the key points:

PPC is an abbreviation for per-per-click, so you only pay when someone clicks your ad.

You can create various types of PPC campaigns including search, social, display and remarketing.

You can manage PPC campaigns within various online platforms like Google Ads, Meta Business Suite, Amazon Ads and external display networks.

PPC ads can be cost-effective way to reach your target audience and generate fast results.

Successful PPC campaigns take effective management, measuring the right metrics and ongoing optimisations.

PPC glossary

Ad copy: The text that appears in the ad. Copy should be concise, engaging and include clear call to actions.
Ad creative: The image or video that appears in your ad. These should be designed to engage users and encourage them to click.
Bid amount: How much you’re willing to pay per click, impression, conversion or whatever else you choose as your pricing model
Bidding strategy: Your bidding strategy is an algorithm-based way of bidding
Clicks: How many clicks your ad receives.
Click-through-rate (CTR): The percentage of people who click your ad after seeing it.
Cost-per-click (CPC): The average cost for every click
Cost-per-mille (CPM): Cost per mille (or cost per thousand) is the average cost for 1000 views or impressions of an ad.
Landing page: The page your ads land people on.
Return on ad spend (ROAS): Measures your return on ad spend.
Return on investment (ROI): Measures your overall profit from the wider investment.
Search Engine Results Page (SERP): Web page displayed by a search engine in response to a user’s query.
Quality score: A metric used in Google Ads that evaluates the relevance and quality of keywords, ads, and landing pages, influencing ad rankings and cost-per-click

Book your free PPC audit

Reckless is a PPC agency in Liverpool, Chester and Manchester. We’ve been around since 2007, helping global brands reach new customers and generate leads through PPC. Here’s a bit more information about our paid media services so whether you’re considering PPC or already running campaigns and want better results, get in touch.

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What is PPC?