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How Does Pay Per Click Work?

If you’re reading this article, then you may be wondering how does pay per click work? In this post, we will be looking at what PPC is, (also known as cost per click (CPC)), how it works and if it’s worth it for your business.

We are aiming this guide towards beginners. Look out for a follow-up post soon on how to get started with your own PPC campaign.


Coming up:

  1. What is PPC (Pay Per Click) Marketing?
    1. How does pay per click work?
    2. Understanding the terminology
      1. Bidding
      2. Keywords
      3. Ad platforms
    3. How does PPC work with organic inbound marketing?
      1. Combining PPC with SEO
    4. Is PPC advertising worth it?
    5. What to take away from this?


What Is PPC (Pay Per Click) Marketing?

In 2017, PPC ads generated a whopping $10.1 billion through more than 7 million advertisers. This figure has continued to rise year on year.

So what exactly is pay per click marketing?

Like SEO (search engine optimisation), PPC (pay per click), is a very effective marketing strategy which ultimately is used to increase traffic to your website.

While organic SEO is a slow burner, taking months or years of high-quality content to show its worth, PPC is a fast track ticket to getting the website views you’re looking for. Reporting 1.5 times as many conversions from PPC marketing over organic results.

So with these impressive results in mind, let’s look at how pay per click works.


How Does Pay Per Click Work?

Understanding how pay per click works gives you a higher chance of a successful campaign and a better understanding of how to make a profit.

PPC works by allowing you to pay for advertisements on an ad platform. The goal is to attract internet wanderers instantly to your site. This preference is instead of a user scrolling through pages and pages of Google search results (which let’s face it, no-one does). Each time someone clicks onto the ad, you pay the ad platform a fee.


Understanding The Terminology


Ever notice when Google searching, the first few results almost always show the little green square saying ‘ad’ next to it?

These are paid ads, where companies are bidding for the first place on top of the search engines. Search engines are the most popular form of paid ad platforms.

So how to appear first on these ads? It primarily comes down to who is willing to bid the most.

Just like an auction, if you’ve placed the highest bid for a specific keyword, you will appear at the top of the page. The price of your request is determined by what the competition is willing to pay.

The number 1 spot on Google receives more than a third of traffic. However, the number 1 bidding spot is always the most expensive, which means it isn’t always the most profitable. You can still get high traffic results when bidding for even the 4th spot. Accuracast has found that the average click-through rate for the top paid result is 8%, whereas the average click-through rate for other PPC ads is a much more affordable 2%.

Adjusting your bids

It’s necessary to keep an eye on your bids and set yourself a budget. As time goes on, you want to be controlling your bids by adjusting what you’re willing to pay.

As prices rise and fall, many businesses only set bids on keywords for a short amount of time. This is called a campaign. And it is to ensure they don’t blow their budget!

Many companies can forecast their bids by using the Google Keywords Planner. Using this, they can figure out what position they will be in and how much they will pay for their bids.  

Bid management

Bid management is a complicated process and certainly one that requires a lot of time and patience to learn. Something that many small to medium-size businesses can’t afford to do.

A more viable option is to use the free Google Ads automated bidding option. You simply set a maximum bid that you are willing to pay for a keyword, and Google manages the bidding process. While cheap and cheerful, it does mean you give up a lot of control.

Another more controllable option is to use third-party bid management companies, but this comes with a hefty price tag. It isn’t a viable option for smaller businesses testing PPC marketing out.  



Keywords are the centre of PPC, they connect the users search queries to you (the advertisers).

Keywords must be chosen carefully. Too broad and you end up with a lot of clicks from people who aren’t interested in your product or service. Not forgetting each click costs you money!

Likewise, you don’t want to make your keywords too long, and risk having unpopular search terms. Therefore, not getting any visitors to your website.

More than half of the searches are more than 4 words long, so it is essential to choose carefully.  

Not forgetting, the more popular the keyword, the higher the bid is. Many keywords search websites such as Keywords Everywhere show the price of keywords. Keywords Everywhere refer to the PPC costs as CPC (Cost per click).

To figure out your keywords, check out our blog post: How to Improve Keyword Ranking in Google.  


Ad platforms:

Ad platforms are a host website that displays adverts on in return for a fee. When web visitors click on an ad through their website, the platform receives a split of the revenue.

While there are many ad platforms, search engines and websites are the ideal ad platforms. But as mobile use for ads is increasing, we see a massive rise in social media ads.


What pay per click ad platforms can you use?

Search engines:

· Google Ads (Formerly known as Google Adwords)

· Bing Ads (Formerly Yahoo)

Social Media:

· Twitter Ads

· Facebook Ads

· Linked in Ads

· Instagram Ads

· YouTube Ads

Mobile in-app:

There is so much to consider when deciding which is the right ad platform for you. That’s why we will go through the advantages and disadvantages of different PPC ad platforms in a post soon.


How does PPC work with organic inbound marketing?

So you may be thinking, do I choose the organic inbound marketing route or paid search?

The answer is to use both!

New Media Campaigns say that PPC is more effective when used in conjunction with SEO.


While creating informative, educational or entertaining content is a slow burner, it is useful in demonstrating your expertise in your area. But as we’ve already highlighted, this can take years and years of hard work to establish.

Using paid ads is an enabler to get users to see your content or products in a much faster way.

Combining PPC with SEO

Both techniques get visitors through to your website. The key is selecting the right keywords. Use the keywords you have chosen for your PPC campaigns throughout your SEO and vice-versa.

Your PPC ads will give you immediate results on how popular your keywords are, and show you if they are working or not.

If you already have your well-researched list of keywords from your SEO strategies, you can go straight into your PPC with a list of keywords to get started.

SEO and PPC Marketing are two strategies that complement each other. Both should be used in combination with each other for the most effective results.


Is PPC advertising worth it?

Knowing whether to invest in PPC ads and if it will be worth it is a tricky question, that only you can decide for your business.

Are you willing to pay for more customers? How effective are you currently at converting website visitors into customers?

One favoured reason that business turn to PPC Marketing is because measuring and tracking statistics and ROI (Return on Investment) is much easier than organic SEO statistics.

However, it is vitally important that businesses are closely following their ROI when implementing PPC Advertising. This is so that they can figure out if it is worth it or not.

But it is hard to determine if PPC ads are worth it without giving it a try first. It is a risk that can be necessary to try if you have the budget available.


What to take away from this?

Pay per click marketing can be a goldmine, especially if you are a savvy service business owner.

Before taking a deep dive into PPC marketing, you need to know:

1. How much you can budget for it

2. Which keywords are the most suited to your website

3. How you will track and measure your results


Hopefully, we have clarified your question on how does pay per click work.

We recognise that this is a basic introduction into the world of PPC marketing, so soon we will follow up with a step-by-step guide into how to get started on your PPC ads.

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