How to use pay-per-click advertising

Pay-per-click (PPC) advertising is the standard way to advertise your business' website in prime positions on leading search engines and their respective content networks.

On a per-click/per-user basis you pay a pre-set and usually capped amount to appear alongside organic search results or contextually-relevant content.

The largest and best examples of pay-per-click advertising networks are Google Adwords (focused on search) and its sister product Google Adsense (contextual ads).

What is pay-per-click advertising?

  • Pay-per-click adverts are the boxes you see above and to the right of search results in search engines such as Google and Yahoo. PPC ads are text-only, with just a heading, brief description and URL to entice consumers.
  • The two major PPC providers are Google AdWords and Yahoo's Advertising (formerly Yahoo Overture), which cover 98% of the PPC market including most other search engines. Google's AdSense distribution network also displays ads on millions of other websites.
  • PPC ads are paid for by the advertiser, who controls where the ads are placed and who they are targeted at. When a user clicks on an ad, the advertiser pays for that click because it is bringing traffic to their website.
  • When you set up your PPC campaign, you will place bids on the keywords you want. The search engines will then use an algorithm based on your bid and your site's relevance to the keyword to determine where it will be placed on the page.

Creating and planning your PPC campaign

  • Before you open a PPC account, find out what your current cost per lead is. Do this by working out how much each online sale is currently costing you - can find out what your current conversion rates are by using a service such as's conversion rate calculator.
  • Once you have established how much your current sales are costing you, set the amount you can spend on each keyword. Use your cost per lead to help you - if you generate one sale per 100 visits, your conversion rate is 1% - so work out how much you are willing to spend on that one sale per 100 visitors.
  • Your next step will be to work out the list of keywords you will target. Use Google's Keyword Tool to work out which keywords are the most searched for by users. Don't forget, the more popular the keyword, the more expensive it will be - so try to achieve a balance between popular keywords and more specific ones.
  • When you sign up for a PPC account, you will be asked to set your maximum daily budget. If you set your budget to be £50, the search engine will display your ads until you have achieved £50 worth of clicks. The search engine will bill your credit card monthly.
  • Your ad will be ranked depending on how much you bid for it, as well as how relevant your website is to the keyword you're bidding on - so make sure your website's SEO is up to scratch.
  • Your ads will be made up of a title, a description and a 'visible' URL. The title should be no longer than 25 characters, and the text should be longer than 35 characters. Try to include your keyword in both.

Tracking your PPC campaign

  • PPC providers offer you a wide array of tools to track your campaign, so you should be able to track everything your users have done, from the search terms they entered to find your site to how much that sale has cost you.
  • Update your list of keywords regularly to get the most out of your PPC campaign. If, after a week, one of your keywords hasn't generated any leads, replace it with a different one.
  • PPC providers also allow you to target your campaign by geographical location, which means you can limit your campaign to your local area, or an area you know demand for your product will be high. For example, not many people in central London will have a need for tractor hire - but if you have offices in Wiltshire, Yorkshire and Norfolk, you can target all of those regions.

Checklist for PPC advertising

  • PPC ads are the boxes you see above and to the right of search results
  • The two major PPC providers are AdWords and Overture
  • PPC ads are paid for by the advertiser, who controls where the ads are placed
  • Advertisers place bids on the keywords they want
  • Plan your campaign by setting a target for your cost per lead
  • Plan a list of keywords to target using Google's keyword search tool
  • Set a maximum daily budget for your campaign
  • Your ad will be ranked depending on how much you bid for it and how relevant your site is to the keyword you're bidding on
  • Your ads will be made up of a 25-character title, a 35-character description and a 'visible' URL
  • Track your campaign using the tools provided by the PPC providers
  • Update your list of keywords regularly to keep your campaign fresh


How much should I be bidding?
Don't bid any more than your profit margin - if you're making one £10 sale per 100 visitors, bid less than 10p per click to make a profit.

Jargon buster

Ad serving: The technology which places adverts on websites.  

Click-through rate
: The measurement used to work out how successful an online ad campaign is. The click-through rate, or CTR, is worked out by dividing the number of people who clicked on an ad by the number of impressions

Cost per click:
The amount advertisers pay per person who clicks on an ad.

Impression: In PPC, one impression counts as one view. So, if the ad has been displayed 10 times, it's had 10 impressions.

SEO: Search engine optimisation. The process used to make websites appear as high up in search engine results as possible.


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