Pay Per Click (PPC) is one of the oldest and most well-known models of advertising on the Internet.
The primary advantage of using PPC advertising is to build cost-efficient campaigns. To ensure this is the case, a campaign is only charged when users click on the ad. Over time, the PPC advertising model has become a highly regarded option in comparison to traditional methods such as banners, press releases, and TV ads.
While the PPC model is wonderful, it does come with certain disadvantages. These include competitors and the use of bots, which are being exploited, which can burn tens of hundreds of dollars in a few clicks away. To counteract this concern, several advertising systems are utilizing customized counterfeiting systems to avoid repeated clicks.
Which Companies Use PPC Advertising?
In general, all of the leading advertising networks use this model.
Google: PPC ads are used for the main search pages, Google Sites, and Google Partners while rotating between alternative action models (i.e. dialing phone numbers). Google also has an in-app advertising network.
Amazon: In line with Google, Amazon offers PPC ads for its search results.
Facebook & Instagram: PPC ads are displayed throughout FaceBook’s platform. Instagram uses the same model as it’s interconnected with Facebook’s advertising setup.
Taboola & Outbrain: These popular content recommendation networks use a pre-determined preview feature to bring leads in. The preview feature often includes text and/or images.
In addition to these big hitters, PPC advertising is also used by LinkedIn, Twitter, Snapchat, Pinterest, and more.
How Much Does Each Ad Click Cost?
This is an essential question when it comes to running PPC ads. The average advertising network includes a preset auction to determine how much each ad placement costs (per click). The underlying algorithm assesses the cost per click based on several parameters including:
* The level of competitiveness in the field
* Maximum Bid Made by Advertiser Per Click
* Historical Metrics and Relevancy of the Landing Page
To assess the number of competing bids, advertising networks often use pre-determined variables to set a price.
With Google, advertisers choose different targeted keywords. For example, a law firm seeking new clients will prefer advertising to users searching “medical malpractice lawyer” through Google’s search engine. The same law firm may not value users searching “best place to buy acne products.” Using the same methodology, Facebook has a detailed algorithm designed to target specific individuals based on demographics and interests. This can be far more challenging in determining what the right price per click is.
Due to the complexities of this system and how it functions, the cost-per-click isn’t always comparable to the maximum price an advertiser is willing to pay. In general, relevant advertisers are given preference and don’t have to pay as much to set up their PPC campaign.
The system also incorporates the use of internal optimization and click price target systems.
For example, you can optimize to place your ad in the first place at a higher cost-per-click. Other optimization will result in a lot of clicks in a short period, which can match campaigns where intensity and exposure are of great importance. Today the trend is to make the whole process simpler thanks to advances in the artificial intelligence capabilities of the various algorithms.
Why Choose PPC Over Other Advertising Models?
The PPC model is appreciated for its affordability and doesn’t require a large investment beforehand. The advertiser only pays once the ad has been clicked.
If the ad doesn’t work out as intended and fails to gain traction, the advertiser can remove it and move on. They don’t have to foot the bill for setting up an ad without seeing results. There are several reasons why this may happen such as weak copywriting, ineffective landing pages, and unattractive ads. However, it’s important to note sometimes an attractive ad may not gain traction either. It often depends on what the market responds to.
Remember, PPC advertising isn’t the only “action-based” model. Alternatives may charge based on subscriptions, filling out forms, sales, or installations. This model is called CPA or (Cost Per Action).
For those specific actions, the cost is generally higher compared to PPC ads. This means a significant amount of money is spent on non-click operations. Due to this, most small budget advertisers prefer using the PPC model for their ads.
PPC vs. Organic SEO
The PPC model is a straightforward option.
The advertiser sets up their ad, generates leads, and pays the advertising network. This allows the advertiser to create a well-rounded campaign with the help of a campaign manager. This includes having a set budget and generating clicks based on the established bid.
With organic traffic sources, the advertiser doesn’t pay an advertising network for leads. Instead, they generate them for free. This is done in several ways whether it’s through search engine marketing, Facebook posts or guest posts on relevant sites in a specific niche.
Despite the promises of free traffic, traditional organic advertising models often demand some type of investment (i.e. financial, time). Many prefer bringing in a certified SEO specialist to set up their campaign before ranking on Google. When there’s a significant amount of competition for keywords, it can quickly become a costly process that’s tough to budget for. For the same reason, it is common to hire a social media specialist who runs Facebook pages and create buzz around posts.
Determining whether or not a specific approach is cost-efficient is easier said than done. In most cases, the organic approach is a long-term play and doesn’t yield immediate results. While PPC ads through Google AdWords can generate results as soon as the ad goes up allowing for subtle adjustments and continuous growth.
Due to these differences, the average advertiser rotates between multiple channels at the same time to optimize their marketing strategy. This allows them to see what works and what does not in their niche. To do this, the advertiser often tracks different data points before calculating a return on investment (ROI). These data points can help illustrate what’s working and what’s not before running new ad campaigns.
Another statistic that needs to be put into the equation is the trend for a big advertising network to push organic results down at the expense of their sponsored exposure or services themselves.
A good example of this is Facebook and its business pages. The social media giant has taken the opportunity to reduce posts from its business pages and replaced them with group-related posts and of course, paid ads.
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