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How Does Pay-Per-Click Work? The Basics of PPC

Pareto PPC

August 23, 2022

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So, you’re working on your online advertising strategy, and you know you need to incorporate pay-per-click. If your business works with eCommerce PPC should be an essential part of your marketing plan, but what is it exactly? In this article, we’ll fill you in on all the basics of PPC management. 

What is PPC?


Pay-per-click is a go-to method for online advertisers because it is a cost-effective way to generate leads, increase sales, and boost brand awareness. As the name suggests, advertisers pay for each click on their ads rather than pay a rate simply to display an ad. Advertisers bid on the perceived value of a click in consideration with the keywords involved, the platform being used, and the audience type where the click originates. 

Popular Type of PPC


Here are a few different ways to use PPC ads. 


Search Engines


Google is one of the kings in the digital space, so Google AdWords is, of course, one of the most popular platforms for PPC. When it comes to types of businesses using Google ads eCommerce is at the top of the list. The Google network allows you to run ads on search results pages and on private websites. While Google is the most popular of the search engines, Bing also has a version of PPC that allows you to run your ads on Microsoft search properties and with a variety of their partners. 




Facebook ads for eCommerce are also a great way to maximize your online advertising budget. The platform has a PPC advertising model that is popular with marketers because it is relatively inexpensive.  


PPC Display


You can run display ads in a PPC model as an alternative to text-heavy ads that run on many websites. Display ads can be more engaging to users who are more visually motivated.




You can use PPC for a retargeting campaign that follows customers after they visit your website. Your ads will show up on other sites they visit to draw them back into your sales funnel.

How Much Does PPC Cost?


There are a lot of variables that determine the cost of PPC campaigns. They are based on keywords, and some keywords cost more than others, particularly if there is a lot of competition for those keywords. You can control how much your PPC campaign costs by setting a daily budget. Once you’ve hit your budget for the day, the ad network will pause your ad so you don’t exceed your spending limit. 

What Are the Elements of PPC?


PPC is seemingly a simple concept, but there are several components that go into a PPC campaign:

  • Campaign: Theme or purpose of the advertising
  • Ad Group: The group of ads related to the campaign – your campaign may have more than one ad
  • Keywords: Relevant words to your ad group
  • Ad Text: Copy that appears in your ad to draw in clicks
  • Landing Page: Where users land when they click your ad – should also be relevant to keywords 

How Does Auctioning Work?


In most cases, there will be an open auction in which you can bid on keywords. Your ad placement will be determined in part by your bid, as well as by the quality of the ad itself. Google determines ad quality by evaluating the relevance of the ad and landing page in relation to the keywords.


You receive an ad rank based on your bid times your quality score. If your ad rank is higher than other advertisers bidding on the same keyword, your ad will appear on top of theirs. The amount you pay may be lower from your bid, based on a formula Google uses that considers the next highest bidder. 

Why Use PPC Management Services


You’ve invested a lot in your business, and you shouldn’t go it alone when it comes to PPC. Without the professional guidance of PPC management services, you could potentially be losing money on a bad PPC strategy. PPC management can give advice on the best networks for your brand, provide engaging ad copy, and offer testing and competitive analysis you just can’t do alone. A reputable PPC partner is the best way to nail your online advertising. 

Want to Learn More? Ask Pareto PPC.


PPC doesn’t have to be complicated. Get must-know tools, tips and tactics from thought leaders and peers in the digital universe, or schedule a free consultation with us today.

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