Written by Caroline Cox on Oct 28 , 2022

Pay-per-click (PPC) ads are among the most effective marketing tactics to get your business in front of the right people at the right time.

Here, you’ll find:

  • The different types of PPC ads (and how pay-per-click advertising works)
  • The latest PPC marketing stats 
  • A quick intro to PPC bidding & ad ranking
  • How to calculate PPC marketing ROI

Ah, the ever-changing algorithm. Many a marketer wishes they knew the magic words to instantly land them at the top of search results. But we all know it’s not that simple.

And that’s too bad, because we also know that approximately three-fourths of users don’t read past the first page of search results. That’s where pay-per-click (PPC) ads come in.

What is PPC marketing?

PPC marketing is a form of digital advertising where brands pay to be featured on the search engine result page (SERP).

PPC marketing falls under the “search engine marketing” umbrella. This type of online advertising allows marketers to have their brand’s ads show up across the internet. Most commonly, this means the sponsored results sections of the SERP. However, these ads can also surface on other websites as users are browsing the internet, before YouTube videos, and even on social media sites. 

Among the most popular PPC platforms used by marketers 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 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 “Ad” in bold right before the URL.

los angeles ppc agency on serp

PPC search ads look similar to organic search results, except with the word “Ad” in bold right before the URL.

How do PPC ads work?

As the name implies, you only pay when someone actually clicks on your ad.

Getting the clicks — that’s the tricky part. To create the most effective digital marketing PPC campaigns, you want your ads to appear in front of the right audience searching for the right keywords that make sense for your product or service.

From there, you place your bid (more on this below) to say 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.

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.

PPC search ads vs. paid social ads

Paid social media advertising is the use of sponsored or promoted posts on social media platforms. Paid social is a great way to meet your target audience where they are. Plus, it can help you subvert pesky platform algorithms that can keep your content from showing up in feeds.

Depending on the platform you use, paid social ads can be a cost-effective alternative to PPC marketing ads. However, because these ads appear in the newsfeed and can easily blend in with the countless other posts people see as they’re scrolling 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.

Display ads differ from PPC search ads in both cost and placement. Whereas 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.

What are the components of a PPC search ad?

When looking at PPC in digital marketing, it helps to understand what components make up an effective PPC search ad. For the purpose of this blog, let’s take a look at search ads within Google Ads (Google’s paid advertising platform). Google Search ads are basic text ads that are grouped together to make up a PPC campaign. Per Google, they can contain:

  • 1-3 headlines
  • A display URL
  • A description up to 90 characters long
  • Ad extensions
display URL on SERP

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 a PPC Search ad, 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 such as:

  • Including keywords
  • Highlighting a common problem and/or solution
  • Getting as close to character limits as possible
  • Asking questions
  • Using concise, to-the-point language

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 2 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.

bing serp

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

What are Microsoft Advertising PPC search ads?

Microsoft Advertising PPC search ads function and look similar to Google Ads (formerly Google AdWords) PPC 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.

bing shopping serp

Shopping ads are more visual, often leading to a higher CTR than plain-text ads.

What are PPC shopping ads?

For e-commerce brands and those who sell products online, Google Shopping ads can be a great way to get someone to “add to cart.” 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.

Shopping ads are automated based on data you send to the search engines. That’s why it’s crucial to fully optimize the product pages on your website and keep your product feed updated

To ensure your product is included in the results feed, your product information needs to be 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. 

What are some PPC marketing stats?

  • The first PPC ad spaces were reportedly created in 1996 by Planet Oasis and Google as a research project at Stanford University.
  • Microsoft’s search network Bing attracts 653 million unique desktop searchers a year.
  • Brand awareness can be increased by up to 80% through Google paid ads.
  • The paid search market is worth approximately $60 billion in the U.S.
  • 34% of Bing users have household incomes in the top 25%.
  • Google processes over 100,000 search queries every second on average.
  • Mobile devices account for about 69% of all Google’s paid ads clicks in the U.S.

What are the benefits of PPC marketing?

With PPC in digital marketing, you don’t have to fight against the algorithm to show up at the top of a SERP listing. These ads put your business in front of people who are searching for something similar to what you have to offer.

Gone are the days of buying ads and crossing your fingers hoping that they’ll be seen by enough interested people to be worth their price.

A PPC strategy with proper keyword research to target your audience and only paying for the clicks you actually get will have a great chance of turning that click into a conversion.

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 user sees.

It’s up to you to determine the amount you’re willing to pay when someone clicks on your ad. Essentially, you’re deciding 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 in comparison.

With PPC advertising, if another advertiser outbids you, their ad is the one that’ll get shown. 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 junk? These insights will help you modify both your bidding strategy and your ad content accordingly.

What is a Quality Score (Google)?

If you are running ads on Google’s paid advertising model (Google Ads), each ad will be given a Quality Score, which Google describes as, “…a diagnostic tool meant to give you a sense of how well your ad quality compares to other advertisers.”

Along with your bid, your Quality Score also factors into your ad ranking. Google decides on your overall Quality Score (on a scale from 1, which is not great, to 10, which is excellent).

This can be viewed in the keywords section of your Google Ads account. The better your Quality Score, the more you’ll rise through the ranks of results and the better your CPC rate will likely be.

photobooth atlanta ppc ad on the serp

Your PPC search ad’s ranking at the top of a SERP depends on factors such as the keywords you’re bidding on, the competition for those keywords, your bid amount, and your Quality Score.

What affects a PPC search ad ranking?

Your PPC search ad ranking is a specific value used to determine where your ad appears on the page (relative to other ads) and it depends on a few factors. These include which keywords you’re bidding on, the amount of competition there is for those keywords, the amount of your bid, and your Quality Score.

The formula looks something like this:

The ad ranked below you

———————————- + $0.01 = actual CPC

Your Quality Score

The higher your ranking, the greater your chances are of getting a click — pretty simple. If you want to up your ranking without increasing your ad spend, make sure your search ads are compelling, accurate, and in line with the hyper-focused landing pages connected to them.

You also want to be mindful of who you’re targeting, when you’re targeting them, and where you’re targeting (from region to the search engine itself).

What is PPC lead scoring?

Generating leads is one thing — but knowing the value of those leads is another thing altogether. Lead scoring, as you may have guessed, is the process of assigning a value to each lead received based on how likely it is that the prospect will convert. 

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 return on investment (ROI).

How do you 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

How can you optimize your SEM plan for PPC success?

You can have the best PPC ads around — but if the rest of your online presence is lackluster, you still risk those clicks turning into dead ends instead of closed deals.

Take another look at your search engine marketing (SEM) program. Are you leveraging the right keywords? Have you planned out your ROI goals? Is your site fully optimized

Being able to answer “yes” to all of these questions will give you and your team the peace of mind that you’re doing all you can when it comes to search engine marketing.

Plenty of companies make the mistake of letting conversion tracking fall by the wayside. Some set it up improperly, and some aren’t tracking conversions at all. Conversion tracking is crucial for giving you insight into performance while providing you with valuable data about customer actions.

A step-by-step plan for an ROI-driven PPC campaign

Think you’ve got the ROI-driven PPC thing down? Make sure you’re taking all of these steps when crafting your campaign:

  • Determine your campaign’s goals
  • Identify, prioritize, and categorize the right keywords for your campaign
  • Write out your ad copy
  • Set up your ads within your chosen ad platform
  • Determine the desired CTA
  • Make sure your landing pages are targeted, consistent, and optimized
  • Have proper tracking set up (more than 70% of our PPC audits reveal improper tracking)

How to find the right PPC agency for you

If you’re not seeing the PPC results you want, or if you just don’t have the time and resources to manage it all, partnering with an agency can be hugely beneficial. (OK, so maybe we’re a little biased.)

When you’re vetting the agencies you potentially want to work with, it’s a good idea to prepare by:

Once you decide which agencies you want to actually connect with in person or via phone, make sure you have an understanding of their fee structure, company culture, and communication style.

The takeaway

PPC in digital marketing is a smart way to reach your targeted audience and turn search engine users into customers. 

Not only can paid ads significantly boost your brand awareness, but they can expand your reach, drive traffic, and, ultimately, make you more money.

Ready to take your PPC game to the next level? Let’s chat.

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

Caroline Cox

Caroline Cox

Caroline is HawkSEM's content marketing manager. She uses her more than 10 years of professional writing and editing experience to create SEO-friendly articles, educational thought leadership pieces, and savvy social media content to help market leaders create successful digital marketing strategies. She's a fan of reading, yoga, quick vegetarian recipes, and making lists.

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