13 Jan 2016

What Is PPC? A Layman Explanation For Graduates New To Digital Marketing

Let’s start with the Wikipedia definition of Pay Per Click Marketing:

Pay per click (PPC), also called cost per click, is an internet advertising model used to direct traffic to websites, in which advertisers pay the publisher (typically a website owner or a host of website) when the ad is clicked. It is defined simply as “the amount spent to get an advertisement clicked.”

OK, so let’s explore this Internet Advertising Model commonly known as PPC.

You’d be stupid if you didn’t know who Google are, or what a search engine is, right? But, most people don’t know exactly how Google and other search engines such as Bing and Yahoo make their money. It’s through search and I’m going tell you how they do it, briefly, here…

PPC explained in layman terms

When you type a word into Google you are presented with listings that match your search. Some listings are ‘organic’ (more on that in SEO) and others are ‘paid for’.  Pay-per-click are the paid for listings.

The top few (usually 3) listings on the page, plus the smaller listings displayed down the right hand side of the page, are paid for by advertisers who want their website to be listed for the term you typed in. They can be identified by the little yellow Ad tag at the top left corner.

PPC or pay-per-click advertising is different to other types of advertising because the advertiser only pays when a user clicks on the advert. That’s what made PPC a hugely successful and groundbreaking new form of advertising (and made companies like Google A LOT of money!)

A little bit more about the advertising model

PPC is an auction based advertising model. Let me give you an example to explain this: Advertiser A chooses how much they are prepared to pay for a click (let’s say £1) and if that is more than Advertiser B, C or D are willing to pay then Advertiser A’s listing will sit above the others on the search results page (you may also hear this called the SERPs). If Advertiser B raises their bid a penny higher to £1.01 their listings will now come top.

This is an over-simplified example of how the auction bidding system works as there are many other factors at play that can affect where your ads appear. But if you were asked to explain how it works at interview this would be ample explanation.