What is PPC & How Paid Search Marketing Works?

Wakas Javed

What is Pay per Click or PPC? How does pay-per-click work? And above all, how to make it work efficiently for you?

In this article, we’ll discuss everything important for you to know in paid search marketing or Pay per click campaign setup: keywords selection, campaign budget, targeting, ad rank, and conversions.

Let’s jump into it one by one.

What Is PPC?

Pay-Per-click commonly known as PPC is an advertising model that enables advertisers to place their ads on an ad platform, and they get charged for each click to their website or app.

Google ads is the most popular and biggest PPC advertising network, where advertisers have multiple options to chose from where they want to place their ads, and they charged accordingly for each click.

The main objective of a PPC ad is to drive a visitor to the advertiser’s website or app by clicking it, where visitor can complete important actions such as, get an online service or buying a product.

Search Engines are extremely popular advertising platforms because there you have an opportunity to display relevant ads according to users searching.

Google ads and Bing ads are advertising services from two most popular search engines operate with real-time bidding (RTB) method, where advertising inventory is sold in a private automated auction using real-time data.

How PPC or Paid Search Works?

Search engines offer an ad spot on a search engine results page (SERP) against each search phrase after an immediate auction takes place for that specific keyword or search phrase.

Multiple factors determine which ad will appear in the top spot of the search engine results page (SERP), including bid amount, landing page, and the quality of the ad.

These auctions are necessary to keep moving the PPC.

Auctions process instantly starts once the search engine receives a search query; if there are advertisers who want to show an ad related to that specific search query, an auction is triggered based on the bid on the keyword by advertisers and place that ad in the top of the search engine result page (SERP) that win according to parameters set by the search engine.

To participate in these auctions, advertisers use their ad accounts on platforms like Google Ads and Bing Ads to set up their ad campaigns by determining when and where they want to show their ads.

Advertisers can easily manage their ads through ads campaigns, such as targeting location, product types, and categorization. Each ad campaign further consists ad group which contains keywords and relevant ads.


PPC advertisements revolve around the keywords and search queries that connect advertisers to users. What are the keywords and search queries?

Search queries are the specific words or phrase type by a user into a search box to find the matching or relevant results from a search engine.

Keywords, on the other hand, are the search tags what advertisers use to target the search queries from the users.

The working process of keywords consists of comprehensive abstractions of a variety of search queries, which also encounters the irregularities like misspellings. Depending on the keyword, advertisers can set match search queries with more or less precision.

For example, in an ad campaign, advertisers always do have an option to set exactly match keywords or permit variations such as the different ordering of the search words, synonyms, misspellings or different spellings and related search queries.

Advertisers can also include the negative keywords in their ads campaign, which will stop ads being triggered by the search queries include those keywords to avoid irrelevant traffic.

Ads & Ad Group

After Keyword selection, the next important step is to create Ads groups in your campaigns. Each ads group consist of similar type of keywords with a relevant landing page to convert more users into customers.

Ads are the most important factor to determine the outcome of a paid search marketing campaign, as users see them on search engine results page SERP if they won the auction.

So ads should be perfect in all aspects to rank them on top of the SERP.

Ads typically contain a:

  • Heading.
  • URL.
  • Description.

They usually appear either on the top of the search engine results page (SERP) or at the bottom of the page. It’s always good and recommended practice to run different versions of an ad copy to see which performs best.

Services such as Google Ads and Bing Ads both provide an important feature called ad extensions that enhance the appearance of an ad.

Below are the Examples:

  • Call extensions allow you to add a phone number in the ad to call you during the business timings. 
  • Sitelink extensions allow the advertiser to place more links in an ad to various pages on a website.

Ad extensions are an enormous feature as they increase the visibility of an ad by making it more appealing to users while communicating more information.

Budgets & Bids

To take part in an auction, advertisers need to set a budget that they ready to spend against each specific keyword. This usual work as:

  • Set budgets at a campaign level.
  • Set Bids at keyword or ad group level.

You’ll set the budgets at the campaign level and your daily spending can exceed sometimes, but will not be overspent by the end of the month. Campaign budgets should be set according to the overall marketing strategy, but bids can be a more precise way to control the budget.

All ad groups have bids, but sometimes bids of the keywords may override the bids of the ad group.

Google ads and Bing ads both use (Real-time bidding) RTB system, so the actual amount charged by the search engine from an advertiser is dependent on ad rank and competitor activity, not only the maximum bid.

Ad Rank

Ad Rank is the most important factor that determines the fate of a PPC campaign.

It’s not just that simple, raise the bid amount and win the auction, to place your ad on top in paid search results. Various other factors come into play to determine which ads will appear at the most valuable top spot on the search engine results page (SERP).

Search engines have their formula to determine the ad rank position based on various factors such as bid amount, click-through rate, and ad relevancy, etc.

  • Bid amount is important but not the only factor to attain the top spot in paid search results.
  • Ads Relevancy and quality.  (Ads relevancy and quality of the ad is another major factor)
  • Search Context (such as the time of day and user device used for search)
  • Format Impact (whether it includes ads extension or not because extensions enhance the impact of the ad)

Quality score is a metric set by the search engines such as Google to determine the ad relevance. The major components of the quality score are:

  • Click-through-rate (CTR).
  • Keyword relevancy to the ad.
  • Targeted landing page quality.
  • The relevance of an ad and keyword to a search query.

Ad relevance is very important; the Higher Quality Score is, the lower CPC (Cost-Per-Click) will be.

Search engines penalize the advertisers who bid on the low-quality score keywords by hardly ever showing their ads, even they have higher bids. That’s why it’s significant to have an engaging, and relevant ad copy with high-volume keywords.

Also, landing page quality shouldn’t be ignored either; ads will show rarely when the point to a landing page with poor user experience. The landing page (website) must be relevant and user friendly with quick load time and offer an overall smooth user experience on all devices.


Right keywords selection allows advertisers to show relevant ads to their targeting audiences. However, there are few other options of targeting available to optimize campaigns such as:

  • Device.
  • Location.
  • Day and time.
  • Demographics.

By using these useful options, advertisers can target users who are on mobile devices or users who are under particular age like 25 and within a certain radius of a specific location, to optimize the performance of their ads.

Targeting options are also extremely important to create different variations of an ad copy, to measure the performance of these variations for different groups of users.

Based on targeting options, Bids can also be adjusted automatically for each keyword, which gives advertisers more control over traffic and budget spending.


The purpose of PPC or Paid search marketing campaign isn’t just getting clicks to a particular landing page or website, but to increase the conversions.

Actions performed by the users after clicking on an ad is called conversions, depending on the Business, advertisers want users to perform different actions such as:

  • Purchasing a service or product.
  • Placing a phone call.
  • Signing up for a newsletter.

Conversion tracking is super important to know whether the PPC ad campaign is performing well or not, and also how many conversions can be associated with paid search rather than other marketing channels.

Google ads can track conversions by placing code into the source code of a conversion page to collect the data. However, Conversion tracking can be complicated rather than a simple click on an ad and perform the required action set by the advertiser.

Because they often include multiple website visits and searches or can lead to a phone call or email or in-store visit.

For 100% conversions tracking, use an analytics service like Google analytics to set how credit for the conversion is assigned in a conversion path.

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