What is PPC | Paid Search Advertising The Right Way

Updated: Jun 4, 2019

What is PPC

Most people commonly ask this question: "what is PPC?". Chances are your business is utilizing PPC (Pay-Per-Click) in a search or social platform already or trying to at least. If not you need to start now.

PPC is the modern day Yellow Pages, with a greater reach by far. Many popular search and social platforms use this in order for businesses to get in touch with their targeted audience.

Listed below are some of the companies many businesses use and what we specialize in.

  • Google – Google Ads. Google is by far the most used search engine and PPC ad platform option; it allows companies and advertisers to research optimal keywords but definitely the most costly of the bunch. Use it effectively.

  • Bing – As the second-most-used search engine, Bing Ads or now known as Microsfot Ads, typically cost less than Google ads and appear on many search engines such as the Yahoo search engine. We recommend using Bing Ads because it translates to 1/3 of business for many clients.

  • Facebook – As a social media platform for PPC campaigns, Facebook is by far the most used and is commonly coupled with Instagram. One of the cost effective forms of PPC.

  • Amazon – Amazon is the largest online retail company in the world. With revenues continuing to soar, any type of business needs to put their product on this platform in order to maximize revenue. Using PPC is crucial to success.

  • Instagram – whatever size your business is, using this platform will provide social proof to your clientele. Creating visually appealing images as a means of putting forth an important message, Instagram may be a great platform for your PPC campaign. Social Media is the the present and future form of advertising.

What is PPC and how does it work?

Picking The Right Keywords

Pick the right keywords for your targeted audience. The key to a good PPC campaign is to utilize your understanding of your market and to pick relevant keywords and phrases that they will use. Because algorithms use the keywords you pick to show your ads to people, the best idea is to do keyword research to figure out the best words for your campaign.

This could take a good amount of time to perfect due to the amount of keywords available and all the outcomes that can occur. It can be overwhelming, so much sure to take the right procedures. Trial and error is key. There are several keyword research tools available, including SEMrush and Google Keyword Planner, to help you.

In addition to being relevant to your audience, selected keywords should be directly associated with your products or services. Picking keywords that have intention or actions to be made, is a great method to get the most value out of your PPC campaign.

As an example, if you’re a medical sales service, "where can I buy medical equipment" or "buy medical equipment now" would be ideal. People use search engines to answer questions, take the mind of your audience and see where it goes. You could come up with many keywords you would have never thought of.

You might also want to incorporate stemmed and long tailed keywords. Make sure when you have your set of keywords, take on the practice to review and update them as necessary. Every industry changes, so should your PPC Campaigns. This will insure the best results in the long run.

ppc re-targeting

Managing Pay-Per-Click Costs

Start planning with your business goals. If you’re a retail business, how much revenue or profit are you looking to obtain each month? If you’re a lead-based business, how many qualified leads are you looking to have and what is their average value? Knowing the answer to these questions will be the foundation for your PPC goals.

Here’s an example: Andres owns a retail business and wants to do $100k in sales per month from PPC and turn a profit. The average value per transaction is $75 and the profit margin on her products is 40% (meaning he makes $30 in profit per transaction).

This means the maximum amount he can spend in PPC per month to drive $100k in revenue is around $40,000. Going over this targeted number will result in a loss in profit.

Continuing Andres's goal, he wants to drive $100k in revenue from PPC and make $10,000 in profit. This means his maximum budget is $30,000 and his minimum Return on Ad Spend (ROAS) is 333%.

Max. Budget = ($100k Revenue x 40% Profit Margin) – $10k Profit = $30,000 Min. ROAS = $100k Revenue / $30k Cost = 333%

Now that Andres knows his target budget per month, he can use an estimated conversion rate (let’s say 4%) to determine how many clicks it will take to generate that revenue and what the average cost per click (CPC) needs to be to accomplish his profit target:

Est. Transactions = $100k Revenue / $75 Avg. Value = 1,334 (rounded up) Est. Conversion Rate (CVR) = 4% Est. Clicks = 1,334 Transactions / 4% CVR = 33,350 Max. Avg. CPC = $30k Cost / 33,350 Clicks = $0.90

Andres now knows that he’ll need to obtain more than 33,000 clicks at an average of $0.90 per click from a $30,000 PPC budget to acquire his desired revenue and profit target. If