Introduction to Pay Per Click Advertising: Part 1

Into to PPC Part IWhat is PPC?

PPC refers to Pay Per Click. It is the largest and the most popular form of internet advertising model used to direct traffic to sites. Unlike traditional advertising, where you need to pay simply for displaying your ad, in PPC you are only charged when your ad is clicked and user gets to visit your site. The advertisers bid for specific keywords in order to display their ads in search results, and so it is also referred as keyword advertising.

Major Players:

  • Google: Google Adwords
  • Yahoo: Yahoo Search Marketing
  • Bing: Msn Adcentre

PPC positionThe position of the PPC ads and the organic listings have been shown in the figure. Now we all know Google is the predominant player in search field and according to Smarta, it hosts 65% of the total internet searches. That’s over one billion searches every day. This is followed by Yahoo! with around 15% of the market and Bing with the smallest slice at 10%. For pure PPC, the market is even more dominated by the king of search “Google” brand. Google is way out in front with an 81.22% market share followed by yahoo getting less than 10% and Bing with only 5.31% market share. So Google being the best seller and due to its wide reach we will be targeting only “Google Adwords” in this series. So lets get started with the key terms:

Key Terms in PPC

1) Campaign: It refers to a set of ad groups with common budget, language, geographical location and the networks where ads are displayed. An adwords account can have one or many adwords campaign running. It is used to organize categories of services or products which you offer.

Networks where ads are displayed:

  • Google Search: Ads which are displayed in Google Search results page.
  • Search Network: Ads showing in Google search partner sites which includes: Google Groups and search sites like Ask and AOL.
  • Display Network: Formerly also called Content Network, this network consists of context driven ads in non-google sites through Google Adsense affiliate network.

2) Ad Group: A group of ads within a campaign with relatively closed set of keywords and phrases. Each campaign is made up of one or more ad groups.

3) Ad: The individual ads within an adgroup. An Adgroup can have multiple ads within it with different set of wordings.

4) Keywords: These are the words or phrases which according to you describes your product in best manner. This only determines where to display your ads. So choose the most relevant keywords with respect to your product or service.

5) Clicks: The number of clicks which your ad received and the user was directed to your site page signifies the number of clicks. It is an important factor as Google will charge you on basis of clicks your ad has received.

6) Impressions: It refers to the number of times your ad was displayed in search results. 

7) CPC: Cost Per Click is also abbreviated as CPC. It is the price which Google will charge from you per click. That is the amount which you need to pay to Google for every click your ad gets. It is variable quantity and is calculated by Google on the basis of the competition of the keywords which you are using.

8) CPM: CPM is also called Cost Per Thousand Impressions is a type of bidding in which you pay for the number of times your ad has been shown in search results (i.e, no of impressions). You need to set a maximum amount which you are willing to pay for 1000 impressions.

9) CTR: CTR refers to Click Through Ratio. It is the ratio of the number of clicks to number of impressions.It gives an idea that how well your choosen keywords are performing. A high CTR is a good signal to show that your ads are doing a good job. It also contributes to Quality Score of your keywords which in turn determine your cost and position in search results.

10) Quality Score: It is the quality of your created ad which is calculated by Google based on different factors such as CTR, landing page, keyword relevancy, etc. More you focus on these factors, better will be your quality score. And if you have good Quality Score you need to pay less CPC.

11) Match Type: While searching for a keyword in Google adwords keyword tool or while creating your ad, you need to specify the match type for showing your ad in search results. In general there are 3 major categories in Match Type and are as follows:

  • Broad Match: Gives you a much broader set of keyword results which might include: synonyms, misspellings, plural forms, abbreviations, etc. For eg if you are searching for red shoes then your ad might also appear for buy red footwear, lace shoes, sports shoes and similar related terms which Google finds even slightly relevant.
    It is good for targeting large audience but you also might loose money by getting not relevant customers. So use it only if you have good inventory to support it.
    Format: red shoes
  • Broad Match Modifier: It is an advanced version of the Broad Match. It requires a (+) sign to be put before the keywords and those keywords have to appear directly or any variation. It will not show the ad if the keywords with plus sign have not been included in query. For eg: if your keyword is red shoes then your ad might show up for red shoes online, red women shoes, etc.
    Format: +red +shoes
  • Phrase Match: Phrase match refers to all the combination of your phrase with other words either as prefix or suffix with phrase being in same order. It does not include any synonyms or variations. For eg: if your phrase is “red shoes” then your ad might also appear for queries like: red shoes online, cheap red shoes, buy red shoes online, etc. So the order of the phrase remains same and the variation is only of prefix and suffix.
    Format: “red shoes”
  • Exact Match: If you have selected Exact Match Type with keyword being red shoes, then your ad will only show if someone searches for the exact same word without any variations. That is only if user has typed red shoes.
    Format: [red shoes]
  • Negative Match: These refer to the words for which you do not want your ads to be displayed. Including a negative keyword will ensure that Google will not show your ad if the query contains the respective negative keyword.

This was a very basic intro to Pay Per Click Advertising with Google (Google Adwords). We also covered the key terms involved in PPC which will be very helpful in our future series of PPC Advertising. This is for creating a base for learning PPC in detail.

In Part-2 we will be covering the architecture and the functioning of Google Adwords. So keep visiting regularly or subscribe to updates to get posts directly in your email box.

Do you think focusing on Google for marketing is the best solution considering the stats or do you have any other views? Please share it in the comments section below.

4 replies
  1. Abhijit Mandavkar says:

    Thanks for sharing the information. You are right in mentioning the key terms of PPC. I would like add that tracking the performance of advertising campaign is also an important part of PPC. This can be done through analytics so as further improvements can be made.

  2. Alejandro Quetzeri says:

    Thanks for sharing this informative article. It is surely beneficial for newbies to gain knowledge about Search Engine Marketing. In the campaigns, you can also add remarketing campaign which is helpful to target old visitors of website. Also, the Google shopping campaign which enables display of products in search results. PPC management is really to


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