Search Engine Land’s Guide to PPC Advertising

At its most basic, PPC advertising is an auction-based method of buying digital advertising on a pay-per-click (PPC) basis on platforms like Google Ads. Advertisers only pay when someone clicks on or engages with an ad rather than paying when an ad impression is served or viewed on the page.

PPC has become shorthand for search advertising bought through Google Ads and Microsoft Advertising (to advertise on Bing), but many other ad platforms also support PPC ad buying, including Facebook, Amazon, Twitter, Pinterest, Snapchat, Quora and LinkedIn. Advertisers can buy display, video, social and native ads on a pay-per-click basis.

About this guide

This guide focuses on the paid search and specifically the text ads that appear on the search results via Google Ads and Microsoft Advertising. This is also called search engine marketing or SEM.

For the purposes of illustration, this guide largely refers to products, features and processes related specifically to Google Ads. It’s by far the dominant player in the market and tends to lead in developing new tools and features.

There are also engines in international markets that have their own advertising platforms, such as Yandex in Russia, Baidu in China and Naver in South Korea, to name a few.

A glossary: Common PPC advertising terms

Digital marketing is famously jargon-heavy and companies often try to coin their own names for products and features. The terms “remarketing” and “retargeting” refer to the same thing, as just one example.

Cost per click (CPC) is the reporting metric name used by the ad platforms. CPC refers to the bid price an advertiser sets (Max CPC) and the price an advertiser pays (reported in aggregate as Avg. CPC). Impression-based buying is referred to as CPM because ads are bought on a cost-per-thousand basis, and advertisers pay when their ads load on the page.

Term Meaning
PPCStands for pay-per-click advertising. Advertisers pay when a user clicks on or engages with an ad.
CPCMeans cost per click. The amount an advertiser pays when a user clicks on or engages with an ad.
Max CPCMaximum cost per click. This is the bid an advertiser sets, establishing the maximum amount the advertiser is willing to pay for a click.
CPMStands for cost per thousand. Advertisers pay per thousand impressions. An impression is counted whenever an ad is served.

Why PPC (search) advertising?

While PPC advertising has become increasingly sophisticated over the years, there remain two basic reasons companies of every size spend billions of dollars every year on search advertising:

  1. Intent targeting
  2. Measurability
  3. Immediacy

With paid search, results start coming in almost immediately, meaning you can start learning, analyzing and optimizing your campaigns relatively quickly. Advertisers can see the results of their campaigns in near real-time and adjust accordingly. This immediacy also makes paid search a great testing ground for messaging and targeting that can be applied to other channels.

PPC Targeting

There are many different targeting methods available in search advertising, including keyword and audience targeting options.

Keyword targeting has long been the foundation of search advertising. Advertisers bid on keywords that people are likely to use when searching for their product or service.

For example, an accountant in Chicago might buy keywords such as “Chicago accountant,” “accounting firm” or “tax accountant.”

Audience targeting, however, has become an increasingly prevalent way for search advertisers to target their ads. You can target searchers based on numerous behavioral signals.

Advertisers can further refine the targeting with location, device, demographic and other criteria.

Machine learning in PPC advertising

Google Ads uses machine learning in just about every facet of its paid search systems. With machine learning and AI, the systems are now designed to serve ads based on what they know about a user’s intent and historical ad data and the predicted marketing outcome.

Ad copy, keywords, bidding and when and where your ads are served are increasingly informed by machine learning.

That doesn’t mean PPC is set-it-and-forget-it, though. If you’re just getting started with paid search, this guide will help you navigate the complexities and help you focus on the fundamentals to find success.

The one constant in PPC is change. The engines are constantly running tests and adding features. So don’t be surprised if things look a little different than the screenshots shown in this guide. There might be something new to learn, but the fundamentals stay the same.

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