Pay per Click
Pay per Click Marketing
Pay per click (PPC) is a billing model in online advertising in which the advertiser only pays once someone actually clicks their ad. The impression alone is free. The price per click is called cost per click (CPC) and is usually determined in a real-time auction at search engines.
| Abbreviations | PPC for the model, CPC for the actual price per click |
|---|---|
| What you pay for | per click - the impression itself costs nothing |
| Difference to other models | CPM pays per 1,000 impressions, CPL only per completed action |
| Pricing | at search engines through a real-time auction, depending on keyword and competition |
| Main drawback | costs arise even without a lead - every click counts, including a competitor's |
PPC marketing makes websites visible immediately
Pay per click marketing is an efficient method of directing a specific target audience to a website. Independently of any previous SEO efforts, the click rate and conversions can be increased within a short time. Companies achieve higher revenue, and the investment in paid online marketing amortises. Pay per click marketing is a sensible complement to SEO and organic traffic from search engines.
Pay per click marketing - definition
Pay per click marketing is a method of online marketing. When a prospect clicks a text ad or a banner, the advertising company pays a certain amount to the site operator or the ad network. The procedure is used in paid search engine advertising and in affiliate marketing.
Cost per click (CPC)
PPC describes the type of campaign in which advertisers pay per click. CPC stands for the actual click costs, or cost per click. In practice both terms are sometimes used as synonyms, which is not correct. The term cost per mille (CPM) often comes up in this context as well. CPM states the amount that has to be spent within an advertising campaign to reach 1,000 people through an impression. Those costs arise before the actual click on the ad impression.
Regarding cost, keep in mind that with every additional cent a click costs, the profit shrinks. In e-commerce the price competition on standardised articles and the sales volumes are high. There the difference weighs heavily. It has to be checked case by case whether billing in affiliate marketing via CPM is more sensible. That is the case, for instance, when a high click rate is to be expected.
Advantages and disadvantages of PPC marketing
Shortly after publishing an ad a company is visibly placed in the search engine in question. Without paying per click that requires time-consuming SEO work. Banner ads and text ads are shown on forums, information and entertainment sites or niche blogs. They direct the attention of potential customers to products and services - regardless of whether the users are searching for them specifically. Like every instrument of online marketing, pay per click advertising has advantages and disadvantages.
High conversion rate and little scatter loss
When a user reaches the website of an advertising company through PPC, they have searched deliberately for its services and products with their search term. The probability that this is a potential customer is high, and the conversion rate rises. The conversion rate describes the ratio of the number of visitors of a website to the number of completed transactions. With professional planning of the campaign regarding keywords and preferred users, scatter loss is low.
Full cost control and measurability
In PPC, advertisers have control over their costs. They decide up to which amount they want to run advertising per day - and anyone who does not want to spend any budget at all can also advertise free of charge on eBesucher. Through the billing, the clients of PPC advertising can check exactly what makes up their costs. Return on investment is laborious to calculate, especially in e-commerce. Tools developed specifically for that purpose help.
Wide reach and audience targeting
PPC marketing increases the reach of products and services. Through a detailed analysis of the relevant keywords and an exact definition of the target audience, audiences can be addressed individually. Pay per click marketing is also so successful because providers have more and more data available. That lets clicks be marketed ever more precisely. It drives prices on the one hand, but it also makes online marketing more calculable and therefore economically attractive.
High scalability
A company paying under the PPC model can scale its online campaigns up and down at will, depending on current capacity, for example. Scalability makes it possible to add keywords and so introduce new products and services to the market within a short time.
The billing model does not require a lead
One disadvantage of PPC advertising is that costs arise independently of whether leads and transactions are generated. All that counts is the number of clicks. If an employee of a competitor visits the website through a paid ad, the costs are due just as they are for the click of a potential customer.
High costs in certain niches
In certain niches PPC advertising is a common form of advertising and the prices per click are very high. Companies should never get drawn into a bidding war with competitors. Even with high-priced products that eats into the return on investment. In some highly specialised industries there are only a few site operators providing suitable ad space for banners. A scarce supply leads to higher prices for an impression.
PPC advertising with Google Ads and AdSense
There are many CPC models. Google Ads and Google AdSense are the industry leaders. The level of the click costs is calculated in fractions of a second through an auction model with real-time bidding. The success of an online campaign with Google Ads and Google AdSense depends substantially on the available budget, the runtime and the quality of the planning. Online marketing professionals recommend choosing keywords of medium length rather than single words or whole sentences.
Google Ads offers fixed areas on the result page of the search engine which advertisers can book. Their placement is above or next to the results of the organic search. The instrument belongs to the area of paid search advertising. The click price depends on the keywords used and on the number of competitors. Whoever is prepared to pay most gets the best placement. The impression alone costs nothing. An overview of comparison figures on potential visitor numbers and costs is provided by Google Keyword Planner.
Google AdSense belongs to affiliate marketing. The Google AdSense partner receives a share of the money the Google customer pays for the click on their advertising. How much money flows per click varies widely. The admission criteria for site operators who want to place text ads or banner ads from Google on their website are strict. That secures the high quality of the Google Display Network. Google AdSense partners are, for instance, forums and blogs specialised in a niche. Their operators finance and monetise their website through this method.
PPC marketing complements organic traffic from SEO
Most companies want to increase the number of clicks through organic traffic in the medium and long term. That is achieved through a placement in the top positions of the search engines. Classic SEO is time-consuming and cost-intensive. First sustainable results appear on average only after two to six months. PPC instruments complement SEO measures. They deliver a fast increase in website traffic. With good PPC planning, prospects can be reached and converted into customers from the launch of a new website for a company, a product or a service.
