Pay per Click Marketing

What is it?

Pay per click (PPC) is an Internet advertising model used on websites, where advertisers pay their host only when their ad is clicked.

With search engines, advertisers typically bid on keyword phrases relevant to their target market. Content sites commonly charge a fixed price per click rather than use a bidding system. Cost per click (CPC) is the sum paid by an advertiser to search engines and other Internet publishers for a single click on their advertisement which directs one visitor to the advertiser's website. Pay per click advertising systems bring together websites where users identify themselves as potential purchasers of a company's products or services, either via the search query they use or by the content they are browsing and companies who have products or services to sell to such users.

Among PPC providers, Google AdWords, Yahoo! Search Marketing, and Microsoft adCenter are the three largest network operators, and all three operate under a bid-based model. All three offer both pay per click advertisements alongside their organic search results, usually labelled sponsored links or sponsored ads, and usually appearing adjacent to or above organic results on search engine results pages and pay per click advertisements on content sites where webmasters have opted to display adverts provided by these networks. There are two primary models for determining cost per click: flat-rate and bid-based. In both cases the advertiser must consider the potential value of a click from a given source (or preferably measure the absolute value).

This value is based on the type of individual the advertiser is expecting to receive as a visitor to his or her website, and what the advertiser can gain from that visit, usually revenue, both in the short term as well as in the long term. As with other forms of advertising targeting is key, and factors that often play into PPC campaigns include the target's interest (often defined by a search term they have entered into a search engine, or the content of a page that they are browsing), intent (e.g., to purchase or not), location (for geo targeting), and the day and time that they are browsing.

Flat-rate PPC

In the flat-rate model, the advertiser and publisher agree upon a fixed amount that will be paid for each click. In many cases the publisher has a rate card that lists the CPC within different areas of their website or network. These various amounts are often related to the content on pages, with content that generally attracts more valuable visitors having a higher CPC than content that attracts less valuable visitors. However, in many cases advertisers can negotiate lower rates, especially when committing to a long-term or high-value contract.

The flat-rate model is particularly common to comparison shopping engines, which typically publish rate cards. However, these rates are sometimes minimal, and advertisers can pay more for greater visibility. These sites are usually neatly compartmentalized into product or service categories, allowing a high degree of targeting by advertisers. In many cases, the entire core content of these sites is paid ads.

Bid-based PPC

In the bid-based model, the advertiser signs a contract that allows them to compete against other advertisers in a private auction hosted by a publisher or, more commonly, an advertising network. Each advertiser informs the host of the maximum amount that he or she is willing to pay for a given ad spot (often based on a keyword), usually using online tools to do so.

The auction plays out in an automated fashion every time a visitor triggers the ad spot. When the ad spot is part of a search engine results page (SERP), the automated auction takes place whenever a search for the keyword that is being bid upon occurs. All bids for the keyword that target the searcher's geo-location, the day and time of the search, etc. are then compared and the winner determined. In situations where there are multiple ad spots, a common occurrence on SERPs, there can be multiple winners whose positions on the page are influenced by the amount each has bid. The ad with the highest bid generally shows up first, though additional factors such as ad quality and relevance can sometimes come into play. In addition to ad spots on SERPs, the major advertising networks allow for contextual ads to be placed on the properties of 3rd-parties with whom they have partnered.

These publishers sign up to host ads on behalf of the network. In return, they receive a portion of the ad revenue that the network generates. These properties are often referred to as a content network and the ads on them as contextual ads because the ad spots are associated with keywords based on the context of the page on which they are found. In general, ads on content networks have a much lower click-through rate (CTR) and conversion rate (CR) than ads found on SERPs and consequently are less highly valued. Content network properties can include websites, newsletters, and e-mails. Advertisers pay for each click they receive, with the actual amount paid based on the amount bid. It is common practice amongst auction hosts to charge a winning bidder just slightly more (e.g. one penny) than the next highest bidder or the actual amount bid, whichever is lower.

This avoids situations where bidders are constantly adjusting their bids by very small amounts to see if they can still win the auction while paying just a little bit less per click. To maximize success and achieve scale, automated bid management systems can be deployed. These systems can be used directly by the advertiser, though they are more commonly used by advertising agencies that offer PPC bid management as a service. These tools generally allow for bid management at scale, with thousands or even millions of PPC bids controlled by a highly automated system. The system generally sets each bid based on the goal that has been set for it, such as maximize profit, maximize traffic at break-even, and so forth.

The system is usually tied into the advertiser's website and fed the results of each click, which then allows it to set bids. The effectiveness of these systems is directly related to the quality and quantity of the performance data that they have to work with - low-traffic ads can lead to a scarcity of data problem that renders many bid management tools useless at worst, or inefficient at best. The basic concept is easy to understand, you pay for clicks to your website by users who based on the search phrase they have used or the content they are reading on other websites might be interested in your product or service based on a set of keywords you submit. Maximising the profitability of your campaigns though requires a great deal of in-depth understanding of the nuances of the pay per click providers' systems, experience, trial and error, determination and certain techniques can save masses of time and cost.

Please contact us now for a quotation or specification for your pay per click marketing project

What’s involved?

You will need accounts with at least one PPC provider (normally Google AdWords). Alternatively we can set accounts up for you. You will need Google Analytics installed on your website. We can take care of this for you. Together we will determine the target search phrases for your website, the landing pages, the funnel by which we want to lead users through to submitting an enquiry or making a purchase and the budget to spend. We will set-up measurement of all the relevant metrics especially cost per conversion in the case of enquiries or return on investment (ROI) for eCommerce sites. We will create the advertising campaigns and groups to test the various advert creatives and landing pages. We will review your web pages and make recommendations for changes such as:

  • Restructuring the navigation
  • Changing technical aspects “behind the scenes”
  • Changing the content that users of your website see
  • Adding new content to the website

These changes can be implemented either by your existing web designers, copy writers, developers and marketing people or we can take care of all the changes using our in house team. We will quote for implementation work on a case by case basis.

How much does it cost?

Since you will own your AdWords account, the work we do for you in your AdWords account is investment expenditure, you will continue to own it regardless of whether you continue working with us or not. Creating advertising campaigns which drive visitors from search engines through to your website and to your objective (enquiry or sale) is powerful, provided your website offers a good product or service and your business model is sound this will increase your profits massively. Pay per click marketing is an ongoing process. We work on your website in sessions. Each session costs £600+VAT. The minimum number of sessions is 3. Depending on the scale of your business, you could choose any number of sessions over any time period. For example:

  • A large corporation might choose many sessions every month.
  • An SME might choose between 1 and 5 sessions per month.
  • A small business might choose 1 or 2 sessions per quarter or even per year.

Depending on the number and frequency of sessions that you choose a notice period may apply if you wish to cancel the agreement and a discounted price may be negotiated.

How much do you need to be involved in the process?

The more resource you can dedicate from your side to the process in terms of skilled marketing people who know your business and are familiar with the internet, the better value for money you will get from our sessions. However, we work with businesses that have no specific marketing team at all, businesses that have big marketing departments and every size of business in-between.

Measuring the results

The advertising networks themselves provide a wealth of analytics to allow results to be measured and campaigns optimised.

What kind of results can you expect?

Google Adwords

If you become our client, we guarantee to improve the performance of your pay per click marketing or your money back. The amount of sessions that will be required, the budgets you will need and the costs per click you will work with depend on the current state of your web pages, campaigns and the actions of your competitors. We can provide ballpark estimates on a case by case basis.

Our satisfied pay per click clients

Please contact us now for a quotation or specification for your pay per click marketing project