I’m sure you all have seen the advertisements that appear next to your search results on Google, Bing, and other search engines. These are called pay-per-click (PPC) advertisements.


Pay-per-click is a digital advertising model where advertisers pay each time a user clicks on one of their digital ads. The goal of PPC ads is to direct the user who clicked on the advertisements to complete a valuable action like signing up for a newsletter or even purchasing a product. Google Ads and Microsoft Ads are advertising services that operate with real-time bidding (RTB). This means ad inventory is sold in an automated, private auction using real-time data.


Although there are different types of PPC advertisements, one of the most common is the paid search ad.  A paid search ad appears when users search for things online using a search engine, especially when performing commercial searches (looking for something to buy). This can range from someone searching for a “pizza near me” to searching for enterprise software. No matter the search, a pay-per-click ad is triggered.

Each time there is an advertisement spot on a search engine’s results page, an auction happens for the keyword instantly. Bid amount and ad quality are some factors that will help determine the winner of the auction and decide who will appear in the top spot. These types of auctions are what keeps PPC advertising going.

If an advertiser is interested in presenting ads related to a user’s search query, an auction occurs that is based on keywords that advertisers bid on.

To participate in these auctions, advertisers utilize platforms like Google Ads to decide where and when they want their ads to appear.


At the center of PPC, keywords connect advertisers to their users’ search queries. What is a query? They are the actual words that a user types into the search box within a search engine to get results. On the other hand, advertisers use keywords to target users by matching them with their search queries.  Keywords are viewed as more generalized abstractions of many search queries that tend to have irregularities, like misspellings.

Negative keywords can also be used to prevent ads from being triggered to prevent irrelevant traffic.


Advertisers also need to prepare ads in their campaigns alongside keywords. They are bound and organized by common themes within an ad group that targets shared sets of keywords. If the auction is won, the advertisement is what the users will see, so you must do it right. A typical advertisement contains a headline, description, and URL.


In order to participate in an auction, advertisers must have a maximum amount they will spend for a given word. To do this, they must set a budget at a campaign level and bids at the keyword level. Budgets can be exceeded daily but will not be overspent monthly and should be set based on the account strategy. Bids allow a more precise way of controlling spending. Although all ad groups must have bids, keyword-level bids override ad word-level ones. Advertisers use automated bidding strategies like programmatic ad buying to set a specific goal for their specific campaign and then allow an advertising platform to determine an ideal bid for each auction.


Winning the auction goes beyond just having the largest bid. Search engines also look at other factors to determine which advertisement deserves the top and most valuable spot. Although each search engine has its own way of factoring elements to determine as ranks, let’s look at what Google considers:

  • Bid amount
  • Ad relevancy
  • Ad quality
  • Context of search
  • Format impact


Picking the right keywords is essential for advertisers to serve ads to relevant audiences, but there are many other useful targeting options to optimize their campaigns. Some of these are:

  • Device targeting
  • Day/time targeting
  • Location targeting
  • Demographic targeting


A lot goes into PPC advertising, but the goal is more than just a click; the purpose of the advertisements is to generate conversions. Conversions are actions that you want your users to complete after clicking on the ad. There are different types of conversions based on what kind of business you are, but some common conversion examples are purchasing a product, making a phone call, signing up for a newsletter, etc. You must track conversions to evaluate whether your PPC campaign is doing well or not.

PPC advertising is a great addition to your digital advertising strategy if done correctly. Hopefully now, you understand what it is and things to consider to make it work for you.

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