What is PPC in Digital Marketing? An Easy-to-Follow Guide

PPC marketing is an ad model where advertisers pay for every click generated from a Google search or social media ad. With its flexible budget management, A/B testing, and audience targeting, PPC marketing can bring serious ROI.

Table of contents:

1. What is PPC marketing? [Video]
2. How do PPC ads work?
3. How does PPC bidding work?
4. What are the components of a PPC search ad?
5. PPC advertising platforms
6. How to build a PPC campaign in 9 steps
7. PPC tools and software
8. Benefits of PPC marketing
9. PPC search ads vs. SEO
10. PPC search ads vs. paid social ads
11. PPC search ads vs. display ads
12. How to find the right PPC agency for you

Read along as Sam Yadegar, CEO of award-winning digital marketing agency HawkSEM, unpacks everything you need to know about PPC, including how to build an ROI-driven PPC campaign for your business.

What is PPC marketing?

PPC marketing is a form of advertising where you pay only when someone clicks on your ad. It’s basically a way to buy traffic to your site, with the goal of bringing in more conversion-ready visitors.

PPC secures top spots on the search engine results page (SERP) while increasing brand visibility and generating more revenue for your business.  Beyond the SERP, these ads can also appear on other websites as people browse the internet, such as before YouTube videos, and on social media sites. 

The most popular PPC platforms marketers use today are:

• Google Ads (which includes YouTube Ads)
• Facebook Ads (which includes Instagram Ads)
• Microsoft Advertising (formerly Bing Ads)
• LinkedIn Ads
• Amazon Ads
• Yahoo Ads
• Twitter Ads
• TikTok for Business

PPC ads can be a highly effective tool in your digital marketing arsenal, whether your industry is SaaS, financial services, higher education, healthcare, insurance, or something in between. 

They help connect you with potential clients through engaging copy, images, and video — ultimately taking them to a targeted landing page on your site. 

Paid search ads (Google Ads) are the most recognizable type of PPC ad. These appear at the top of the SERP above the organic, search engine optimized (SEO) results. They look similar to the organic results, except with the word “Sponsored” in bold right before the URL.

How do PPC ads work?

Once you choose a PPC platform, you can start creating ads. Then, you can bid on the keywords you think your audience might type into Google’s search bar. You’ll place a bid based on how much you think a click is worth. 

When your ad shows up and is clicked, you’re charged a fee; the fee can vary greatly depending on industry, competition, keywords, Quality Score, and more.

The higher you bid, the more likely you’ll appear atop the organic results, before your competitors’ PPC ads. 

How does PPC bidding work?

PPC bidding, also known as cost-per-click (CPC) bidding, is similar to a public auction. When someone enters a query into their chosen search engine, the built-in algorithm picks what it determines are the most relevant paid and organic search results, and that’s what the person sees.

It’s up to you to determine the amount you’re willing to pay when someone clicks on your ad. Essentially, you decide how much each click is worth. 

What makes this tricky is that, unlike a public auction, you don’t know how much your competitors are bidding on each keyword.

With the PPC advertising model, if another advertiser outbids you, their ad might get shown. But it’s not so cut and dry.  For example, a competitor might outbid you with an ad that’s less relevant or has a lower Quality Score. In this case, you have a good chance of winning the auction.

If you bid too high, you may get more clicks, but you can also go through your budget in a snap. To find the happy medium, it takes time and attention — from you, a team member, or a digital marketing agency.

Keep an eye on your click volume and the types of clicks you’re getting. Are they qualified leads (real, potential customers) or are they serial browsers? These insights will help you modify both your bidding strategy and your ad content accordingly.

What are the components of a PPC search ad?

PPC search ads generally follow similar ad formats, though they vary slightly depending on the platform (more on those later). Let’s start with PPC components for the most popular ad type: search ads. 

PPC ads on Google and Bing contain: 

• A headline
• A display URL
• A meta description up to 90 characters long
• Ad extensions

Your display URL can be your site’s homepage or a simple, clean URL that relates to the keywords and ad copy.

Headlines

Recently, Google upped the ante by allowing up to three headlines in PPC text ads, separated by a vertical pipe “|” symbol. Your headlines are where you have the opportunity to catch someone’s attention and highlight a product or service while being direct about what you offer.

When brainstorming PPC ad headlines, consider elements like:

• Keywords
• Audience pain points and solutions
• Character limits
• Concise, to-the-point language
• Questions

Display URL

Your display URL can be your site’s homepage or a simple, clean URL that relates to the keywords and ad copy (such as hawksem.com/ppc). This clean display URL is what appears to users within your ad.

Ideally, though, the URL links to a targeted landing page on your site. The landing page should closely match with the look, feel, and verbiage of the ad, with a clearly defined CTA so the person knows what action to take next.

For example, if HawkSEM were to create a PPC ad that offered a free PPC audit, the display URL could be something like hawksem.com/free-ppc-audit. This way, the offer is clearly matched with the ad itself. 

The link might then route to a more complex URL for tracking purposes, such as:

Descriptions

You’ve got a limited number of characters to work with for your PPC search ad’s description — 90, to be exact. Make them count! 

Your description should speak specifically to your target audience and user demographics, highlight benefits for them (vs. just talking about how great your offering is), and have a strong call to action (CTA).

Descriptions are most effective when they’re tangible (i.e., offering “25% off” instead of simply saying “we’re the best!”). Plus, Google now allows for two descriptions, doubling your character count to 180.

Ad extensions

Ad extensions are no-cost additional lines of text that can help improve your CTR by adding more info and context to your ad (as well as more real estate on the SERP). As Google explains, ad extensions can include:

• More text
• Call buttons
• Location info
• Pricing info
• Additional links to your website
• Star ratings

Your extensions aren’t guaranteed to show up with your ad, but if your ranking is high enough and the extension is likely to improve performance, it will.

Suspect your PPC program might be broken? Here’s how to fix it.

Ad Groups

An ad group is a function of Google Ads that lets you organize your ads into different classifications so that it will target each ad in that group when the keywords are triggered.

Oftentimes, PPC marketers will group ads with similar themes based on the categories that appear on the website. Let’s say you sell skating gear. You can create ad groups to target  specific search queries. It might look something like this:

Ad Group: skates           Ad Group: gear

inline skates                      skating safety gear

rollerblades                       elbow pads

roller skates                      knee pads

skate wheels                    wrist guards

quad skating                    helmet for skating

Remarketing

Remarketing allows you to retarget potential customers who have already engaged in your content in some way.

They may have clicked on your search result in a SERP, clicked on an ad, abandoned a cart, or even made a purchase. Remarketing lets you show tailored ads to these folks, which brings you two benefits. First, you cut advertising costs, since it’s always cheaper to re-convert existing customers than new ones. Second, you increase your chance of conversion since this ad speaks more directly to that segmented audience. 

Curious about how to set up a remarketing campaign in Google Ads? Learn more here.

PPC advertising platforms

Wondering where to place your ads? Start with wherever your audience hangs out online. Most often it’s probably Google, but social media platforms offer windows to capture your audience’s attention with PPC ads as well. 

Google Ads

Google Ads is the most popular PPC platform, with over 6.9 million searches per minute:

However, its popularity brings significant competition that results in higher ad spend. If a platform has more competitors, you’ll naturally spend more to rank for your chosen keywords. 

Microsoft Advertising PPC

Microsoft Advertising search ads function and look similar to Google Ads search ads. 

They feature the “Ad” box next to the result and include a headline, URL, and description. As you can see above, some ads include additional links and descriptions as well.

Google Shopping

Google Shopping ads spotlight a specific product or service to entice people to click and buy. Because they are more visually appealing, they often result in a higher CTR than plain-text ads. These can be especially effective for independently run small businesses and ecommerce brands that sell products online. Did someone say “add to cart?”

Shopping ads are automated based on data you send to the search engines. That’s why it’s crucial to fully optimize your website product pages, update your product feed, and ensure product details are compatible with the shopping feed’s ad platform. 

Once you submit your product data to the search engine in the proper format, you’ll be primed for ad placement perfection. The approval process may take 24-72 hours.

Merchant centers for Google and Microsoft have their own breakdowns to ensure you’re following the proper steps.

Pro tip: Your overall PPC marketing campaign can include several different types of PPC ads, including search, social media, display, and shopping ads. 

Social media PPC platforms

Most social media channels offer both organic and paid marketing capabilities. Instagram, Facebook, LinkedIn, Pinterest, and X all have PPC platforms to get in front of your audience. You just need to prioritize the channels your audiences use the most. 

If you’re a B2B SaaS brand, LinkedIn Ads offers great targeting potential to reach leads based on employer, industry, and even job title, though CPCs tend to be higher on LinkedIn. Instagram Ads is a more affordable way to harness user-generated content and affiliate marketing to build more trust with your audience. 

How to build a PPC campaign in 9 steps

Ready to nail ROI-driven PPC? Make sure to follow these steps when crafting your campaign:

1. Determine your campaign’s goals
2. Conduct keyword research
3. Pick a campaign type
4. Write out your ad copy and landing page copy
5. Establish a budget and choose a bidding strategy
6. Set up proper lead and conversion tracking
7. A/B test your ads
8. Assess performance and optimize your ads
9. Calculate PPC marketing ROI

Let’s bake some PPC magic.

1. Determine your campaign’s goals

Your goals are the driving force behind your PPC marketing campaigns. While revenue is an easy desire to identify, campaign goals are more detailed and nuanced than that. 

You might use PPC campaigns to: 

• Build brand awareness
• Target more qualified leads or a new audience segment
• Improve website traffic
• Build niche authority and brand visibility
• Promote a specific product or service

Just make sure your goals are measurable by KPIs, which you can assess throughout the lifetime of your ad campaigns (more on KPIs later).

2. Conduct keyword research

What keywords will your target audience type into Google? Whatever they are, your ad should encompass them, with a few caveats. 

Keyword research also includes analysis into key specs like:

• Keyword volume: how often people search the query into Google)
• Keyword difficulty: how hard it is to rank) 
• CPC: how much you’ll pay for each click
• Search intent: the motivation behind the person’s search (informational, navigational, commercial, transactional)
• Relevance: between the keyword and your products and services
• A winning keyword list covers competitor gaps without overburdening your ad budget with expensive CPCs. 

You can also consider keyword match types to target. Broad encompasses any query with that keyword, while exact focuses on queries limited to that keyword or keyword phrase only. 

Pro tip: Attracting the right people to your ads isn’t just about choosing the most effective keywords. You also want to use negative keywords to prevent unqualified leads (i.e., the wrong people) from clicking on your ads.

3. Pick a campaign type

We know that the best PPC platforms are the ones your audience uses the most. But for most brands, Google Ads is a vital PPC platform. There, you can pick from a few different campaign types, including: 

• Search: Text ads atop organic results on the SERP
• Display: Image-based ads that come up on various websites your audience browses
• Shopping: Product listing ads on Google’s SERP
• Video: Appear as bumper, in-stream, and in-feed video ads on YouTube as well as other Google video partner platforms 
• Performance Max (PMax): Goal-based campaigns that allow cross-platform advertising for the same campaign 
• Demand gen: Customizable and personalized ads especially common for social media PPC campaigns 
• App: Ads within Google’s app store, or in-app advertisements

Go for campaign types that consider your industry’s unique trends and best appeal to your target audience. 

4. Write out your ad copy and landing page copy

Ad copy should be both concise and compelling to intrigue your audience enough to click on it. Keep descriptions focused on your product’s benefits and keep keyword inclusions to one primary keyword (nobody likes keyword stuffing). 

Pro tip? Use ad copy to promote limited-time offers and social proof to appeal amidst the competition. 

Similarly, your landing pages (the page your audience lands on once they click your ad) should be equally persuasive. Keep graphics and layouts consistent with your branding and focus landing page copy on key benefits, concise lead forms, and a clear call-to-action (CTA).

5. Establish a budget and choose a bidding strategy

Part of your account structure is your daily budget, which tells Google your maximum amount of ad spend you’re comfortable spending each day. Your ad budget should account for your ideal keywords and return on investment (ROI) goals. 

While manual bidding gives you most control over your budget, Google’s automated bidding strategies help you maximize performance and streamline campaign management. 

You can pick bidding strategies based on your campaign goals: 

• Maximize conversions: Focus on the most possible conversions
• Maximum conversion value: Focus on the highest-value conversions
• Maximize clicks: Focus on garnering more website traffic
• Target CPA: Bid with a target average cost per acquisition (CPA)
• Target ROAS: Bid with a specific target return on ad spend (ROAS) 

HawkSEM uses each client’s campaign goals to inform a tailored daily budget, but they usually resemble one of these two formulas: 

Revenue-based goals: 

Avg. CPC x (Revenue goal / average order value) / conversion rate) = Total budget needed

Conversion-based goals: 

(Number of conversions needed / Website conversion rate) x Average cost per click = Total budget needed

Still need help with your PPC budget? Learn how to calculate it with this guide!

6. Set up proper lead and conversion tracking

As a top-3% PPC agency, we leave no stone unturned to optimize your PPC campaigns and overall strategy. That always starts with a comprehensive PPC audit to determine where you’re at with your audience and revenue. 

Guess what we find in 70% of our PPC audits? Improper tracking. This unfortunately can set you up to fail before you even begin. But it’s avoidable. Just make sure you capture every type of conversion that matters in your marketing strategy, including: 

• Newsletter signups
• Filled-out lead forms
• Demo bookings
• Purchases
• Repeat purchases
• Discount or offer redemptions

You should also ensure you know the value of every conversion and lead that your ad generates. 

Lead scoring and revenue

Lead scoring assigns a value to each lead received based on how likely it is that the prospect will convert. 

You can calculate revenue per lead using the following formula:

Total Revenue Generated / Total Number of Leads = Average Revenue Per Lead

However, this doesn’t paint the whole picture. 

There are other factors at play as well, including your average sales cycle length, site traffic, customer relationship management (CRM) data, and lead scoring to determine your high-quality leads.

Ensure you’re properly measuring your PPC ROI by:

• Setting up lead scoring
• Tracking your leads and conversions properly
• Adding in subjective data regarding experiences with the lead
• Calculating anticipated ROI before anticipated site traffic

When you know the true value of the leads coming in through lead scoring, you can better prioritize and iterate your PPC digital marketing strategies. In other words, lead scoring is one of several important metrics that can help you drive more quality leads in the future.

You can determine your lead value by setting up a lead scoring system that connects your quality leads to the amount spent on each lead. UTM parameters can be added to landing page URLs that gather info about who is clicking on your ads.

From there, you can pull this PPC marketing campaign data into your CRM to connect with lifetime value and lead score. 

Lead scoring helps determine which campaigns are driving the best leads and value — and it’s an essential part of ConversionIQ, HawkSEM’s unique approach to marketing. 

Armed with this information, you can better analyze your PPC campaigns and keywords to maximize your ROI.

7. A/B test your ads

You’ve got your keywords, ad copy, and conversion tracking all sorted — but how do you know which ad combinations bring you the best results? 

That’s where A/B testing comes in. 

Compare one element (headline, CTA, description, keyword) at a time over a set period (ideally 1-2 months). The one that brings the most traffic and revenue is the one you should scale with bigger daily budgets. 

Once you decide on the most revenue-generating ad campaigns?

8. Assess performance and optimize your ads

Remember those marketing goals we discussed earlier? It’s time to see if your PPC campaigns lived up to them. HawkSEM’s skilled PPC strategists assess performance based on key metrics like:

• ROAS: Your ad revenue compared to ad spend
• Clickthrough rate: How often audiences click on your ad versus scrolling past it
• Website traffic: The number of monthly visitors to your website
• Keyword rankings: SERP positions for specific keywords
• Customer lifetime value (CLV): How much money your customer brings your business throughout the course of their interactions with you
• Quality score: Google’s assessment of your ad quality from 1 to 10
• Ad rank: a specific value used to determine where your ad appears on the page (relative to other ads)

You can also leverage customer and audience data from PPC analytics from each platform to help inform your next steps and strategy. 

9. Calculate PPC marketing ROI

Put simply, you can calculate revenue per lead using the following formula:

Total Revenue Generated / Total Number of Leads = Average Revenue Per Lead

However, this doesn’t paint the whole picture. 

There are other factors at play as well, including your average sales cycle length, site traffic, customer relationship management (CRM) data, and lead scoring to determine your high-quality leads.

Ensure you’re properly measuring your PPC ROI by:

• Setting up lead scoring
• Tracking your leads and conversions properly
• Adding in subjective data regarding experiences with the lead
• Calculating anticipated ROI before anticipated site traffic

PPC tools and software

PPC campaigns are time-consuming to launch, manage, and optimize. But even HawkSEM’s seasoned experts harness automation and efficiency from PPC tools and software. 

Here are some examples you might consider in your strategy: 

• Semrush’s Keyword Magic Tool: This SEO software helps you identify relevant keywords with accompanying metrics like volume, competition, and difficulty. 
• Optimizely: This software helps you A/B test various elements of your PPC campaigns as well as other web elements to see what converts the most. 
• ConversionIQ: HawkSEM’s unique performance analysis system helps you assess performance across your campaigns and grander marketing strategy — every client has access to the dashboard. 

Check out our full guide for more PPC management software!

Benefits of PPC marketing

Brands spent about $185 billion on search engine PPC marketing in 2022, and that number’s expected to reach $260 billion by 2028. That doesn’t even include social media PPC marketing (which we’ll discuss in a bit). 

So, why does this form of digital marketing deserve so much of the world’s marketing budgets? 

A quick browse through our case studies offers some insights. 

PPC marketing brings you closer to your target audience and revenue goals much faster than other tactics, which can drive traffic, conversions, and ultimately, revenue. 

Keep reading for more details on PPC marketing benefits: 

PPC brings much faster results than other marketing tactics

SEO SaaS brand Ahrefs says most brands need at least a year to rank organically in the top 10 results of the SERP. PPC gets you to an even higher position in a fraction of that time — between 2-3 months. 

You don’t have to invest as much time to develop website content or building niche authority to end up in position #1 — all you need is a hefty budget to surpass your competitors in keyword rankings, since you’re paying per click. Plus, your search ads aren’t at the mercy of Google’s organic ranking algorithms. 

PPC marketing offers more detailed audience targeting 

Organic website content ranks based on keywords and content quality. Even though your target audience might type your content keywords into Google, you still cast a fairly wide net compared to PPC marketing. 

Google Ads offers custom audiences to help ensure your search ad appears in front of your ideal customer profile (ICP) based on demographics, location, website history, purchase behavior (if you import data from your CRM), and more. Social media ad platforms like LinkedIn and Facebook Ads go similarly detailed with similar audiences that replicate your customers’ profiles. 

With SEO, you can’t get near this kind of targeting precision. 

Target customers with specific job titles on LinkedIn Ads or ones that have visited your website with Google Ads remarketing. Either way? You get closer to audiences most likely to purchase your products. 

PPC ads are easy to A/B test and optimize

How do you know if one blog article is more effective than another? Sure, you can compare performance like traffic and conversions, but what is it about one that’s more effective? Which out of the seven paragraphs, 11 bullet points, outline headings, or keywords converted more visitors than the other? 

It’s much easier to compare performance with fewer elements. 

A/B testing helps you isolate one PPC ad element at a time, including lead form questions, graphics, meta descriptions, and keywords to identify what works faster and scale accordingly. 

PPC marketing ads offer simple conversion tracking and marketing attribution

No matter your PPC platform (Google Ads, Microsoft Advertising, Instagram Ads, etc.), you can bet on laser-sharp conversion tracking for every single ad campaign. 

For example, Google Ads automatically tracks revenue and conversions, while providing valuable data insights on ad elements that bring the best results. On top of that, you can use PPC analytics to track calls from your ads and timelines for your conversion journey. 

PPC ads and channels complement each other 

Who said you could only run one ad at a time? PPC ads give you a network of possible campaign types and channels to maximize traffic and revenue. For example, you can run ads on both your social media platforms, Google’s search engine, and Google’s Display Network at the same time. 

Another pro? PPC marketing helps you further SEO efforts. For example, you can generate traffic to your organic content through PPC ads. 

PPC search ads vs. SEO

PPC and search engine optimization (SEO) are two sides of the same coin. PPC will typically yield faster results (usually about three months) while ranking organically via SEO takes more time (roughly four to 12 months).

SEO is an excellent addition to your search engine marketing efforts because you can show up in organic search results through relevant content marketing assets without paying. Of course, you’ll likely get better audience reach and overall results with a holistic digital marketing approach for your ad campaigns.

PPC search ads vs. paid social ads

Paid social media advertising involves sponsored or promoted posts that appear on your audience’s social media feeds. Yadegar points to paid social as an effective and cost-effective PPC strategy for top-funnel audiences, who are just getting familiar with your brand:

“[Paid social] usually has less expensive CPCs and helps you build brand awareness,” says Yadegar. 

On the other hand, search engine PPC tends to have higher costs, but there’s a reason: 

“[Search engine PPC ads] typically have higher returns and drive meaningful and revenue-based results from bottom-funnel audiences,” says Yadegar.

Depending on the platform you use, paid social ads can be a cost-effective alternative to pay-per-click advertising. However, because these ads appear in the newsfeed and can easily blend in with the countless other posts people see as they scroll through social media, visibility and reach may be limited. 

PPC search ads vs. display ads

Display ads show up on almost every revenue-generating site across the web. They are the ads you see on the top, side, or bottom of a website you visit, a mobile app you use, or a video you watch.

They differ from PPC search ads in both cost and placement. While PPC search ads are paid for by the search engine, display ads are paid for by the advertiser. Though generally less expensive, display ads also cast a wider net — meaning they are less targeted. 

Display ads are known for their high visibility rates. Ads created via the Google Display Network reportedly reach more than 90% of people on the Internet. However, because of their prevalence, they typically have a lower click-through rate (CTR) than PPC search ads and result in fewer conversions.

Most often, this ad type is used for branding, so you stay top of mind after someone visits your site, in conjunction with your PPC efforts.

How to find the right PPC agency for you

What if you don’t see the PPC results you want, or simply don’t have the time and resources to manage it all? Partner with a PPC agency to keep your PPC campaigns profitable. They have seasoned PPC experts and dedicated account managers to monitor results, research keywords, test your ads, and so much more. 

Before you sign on with an agency, prepare for your initial consultation with: 

• A list of goals and objectives
• An idea of which services you need
• A budget in mind
• Ideal key performance indicators (KPIs)

Ideally, a PPC agency should have demonstrated success with clients similar to your brand. For example, if you’re a SaaS brand, go for an agency like HawkSEM, who has a roster of B2B and B2C SaaS clients in its roster. Same goes for business size and niche. 

The takeaway

PPC marketing is a fast-track to reach your audience and convert them. It’s faster than SEO and organic social media marketing, making it a vital component to any digital marketing strategy. But conversion tracking, ad creation, and audience analysis takes time that you might not have as a busy marketer. 

Ready for PPC results without the time investment? Leave your PPC campaigns to HawkSEM. Our dedicated PPC experts will give your campaigns the TLC they need to bring you the ROI you deserve. 

Ready to take your PPC game to an average of 4.5X ROI? Let’s chat.

This article has been updated and was originally published in November 2019.