Pay per Click Ad (PPC) Definition - What is Pay per Click Ad (PPC)?

nikki · March 7, 2025, 5:30pm

I keep seeing people talk about PPC ads but like… what even is that? Can someone explain it deeply? Is it just paying every time someone clicks my ad or is there more to it?? And why do people use it, like is it actually worth trying or just another marketing buzzword? Would love a simple breakdown bc Google is lowkey making it more confusing

fatih · March 7, 2025, 6:03pm

I totally get where you’re coming from! PPC can sound super technical when you’re just trying to figure out what it even means. So, let me break it down for you in the simplest way possible.

Pay per Click Ad (PPC) Definition - What is Pay per Click Ad (PPC)?

So, PPC stands for pay-per-click, and honestly, it’s pretty much what it sounds like. You only pay when someone actually clicks on your ad. Instead of just throwing money at an ad hoping people see it, you’re paying for real action.

Whether you’re promoting your own business or running ads for someone else, PPC helps you get in front of the people who are actually searching for what you offer.

PPC definition and benefits

Now, here’s the cool part. It’s not just about throwing more money at it to win. Google (and other search engines) don’t just automatically give the top spots to the highest bidder. Instead, they run something called an Ad Auction.

That’s just a fancy way of saying they look at a mix of your bid, how good your ad is, and how relevant it is to the person searching. Basically, they want to show the best, most helpful ads to people, so even a smaller budget can perform well if you’re strategic.

How to Calculate PPC?

If you’re wondering how you actually know if your PPC ad is making you money, one of the easiest ways to check is by calculating Net Profitability.

Here’s how you do it:

Take the money you made from your PPC campaign (let’s say $1,000), subtract what you spent on it ($500), divide that by the cost ($500), and multiply by 100 to get your percentage.

(($1,000 - $500) / $500) x 100 = 100%

That means for every dollar you spent, you made a dollar back. Pretty satisfying, right? This helps you figure out if your ads are actually pulling their weight or just eating your budget.

Benefits of PPC Ads

Alright, so why do people love PPC? Here’s why it might be worth trying:

Boosts your web traffic: Want people on your site? PPC gets you there. Your ad can show up right on the first page of Google, which is exactly where you want to be when people are searching.

Quick Results: No waiting around for months. You can literally start seeing clicks and traffic almost immediately.

Check for the Right Keyword: PPC lets you test keywords to figure out which ones actually work for your business. Super helpful when you’re trying to find the right audience.

You Only Pay for Clicks: You don’t get charged just for showing up. You only pay if someone clicks your ad.

You Can Control the Costs: You get to set your budget and change it whenever you want. Big or small, you’re in charge.

Difference Between PPC and SEO?

So, here’s the big difference you’ll want to know. PPC and SEO are both part of Search Engine Marketing (SEM), but they work differently.

SEO is all about slowly climbing up Google’s rankings by making your site super helpful, relevant, and optimized. It takes time, but it builds a strong foundation.

PPC, on the other hand, is straight-up paid ads. You’re paying to be seen right away, often right at the top of the search results. It’s like jumping the line.

In a perfect world? You’d want to use both. SEO builds long-term traffic, while PPC gets you immediate results. And when they work together, it can seriously boost your credibility and visibility.

So, is PPC worth it? Honestly, it can be. If you’re looking for quick wins, testing new ideas, or just want to get in front of people fast, it’s definitely something to consider. Just make sure you’re keeping an eye on your numbers so you’re not spending more than you’re getting back.

Pay per Click Ad (PPC) Related Articles

Pay per Click (PPC) Related Terms

Hope that clears things up! Let me know if you want me to break down anything else, I know Google explanations can get way too complicated

RockTheScale4 · March 8, 2025, 1:22pm

@nikki I so feel you on this, Google really does make it sound way more confusing than it needs to be But @fatih already gave such a clear breakdown (seriously, saving that explanation forever ), so let me just explain setting up a Google Ads PPC campaign to fill in the gaps and give you the full picture!

Trust me, I was super overwhelmed at first too, but once you break it down step by step, it’s actually pretty manageable.

How to Set Up a Google Ads PPC Campaign?

1. First, you’ll need a Google Ads account.

Create Your Account: To get started, head over to ads.google and click the “Start Now” button. You can sign in with an existing Google account or create a new one. Google will ask for some basic information about your business, such as your website URL and location – fill those in as prompted. After completing the sign-up steps, you’ll have a new Google Ads account ready to use.

Switch to Expert Mode (Optional): During the setup, Google might prompt you to set up a Smart Campaign with a “main advertising goal.” If you prefer more control (and in this guide we do), look for an option to “Switch to Expert Mode”. This lets you skip the simplified setup and access all Google Ads features for a full campaign experience. Don’t worry – you don’t have to be an expert; it just gives you more manual control over your campaign settings.

Set Up Billing Details: Before your ads can run, you’ll need to enter billing information so Google knows how to charge you for clicks. In your Google Ads dashboard, click the Tools & Settings (wrench icon) in the top menu and select “Billing & Payments.” Follow the steps to add a payment method (like a credit card or bank account) and your billing address. Google will also have you choose your country and time zone. Take your time to ensure all billing details are correct – you don’t want your ads to pause due to a billing issue. Once this is done, you’re officially ready to advertise!

2. Pick the right campaign type.

There are a few, but to keep it simple:

Search Campaigns are the classic text ads that show up when people Google stuff. These are perfect if you want to catch people already searching for what you offer.
Display Campaigns show visual ads across random websites – great for getting your name out there.
Shopping Campaigns are mainly for e-commerce stores that want to show off actual products in Google results.
Video Campaigns are for ads on YouTube.

If you’re just getting started, I’d probably recommend Search Campaigns because they go after people who are already looking for you.

3. Do a little keyword research.

Brainstorm and Use Keyword Planner: Start by brainstorming words and phrases related to your product or service. Put yourself in your customer’s shoes: what would they type into Google when looking for what you offer?

Once you have some ideas, Google’s built-in Keyword Planner tool can expand that list and provide valuable data. Go to Tools & Settings > Keyword Planner in your Google Ads account and choose “Discover new keywords.” Enter a few of your brainstormed words, or even your website URL, and Google will generate a bunch of related keyword suggestions along with information like average monthly searches and competition level (src: Google ads keyword research).

As shown above, the Keyword Planner lets you see how popular certain queries are. For example, if you run a bedding store and enter “bedding” keywords, you might discover related terms like “tropical duvet cover” or “coastal bedding” along with their search volumes and CPC bids.

Pick keywords that are highly relevant to your business – you want your ads to show only when the searcher is actually looking for what you sell.

Organize Keywords into Ad Groups: Once you have a solid list of keywords, organize them into logical ad groups. An ad group is a set of keywords that will trigger a specific set of ads. The key is to group similar keywords together.

For instance, you might create:

Ad Group 1: Coffee Beans – containing keywords like “coffee beans for sale,” “best coffee beans,” “fresh roasted coffee beans,” etc.
Ad Group 2: Coffee Subscription – containing keywords like “coffee subscription service,” “monthly coffee delivery,” “coffee subscription box,” etc.

As you run your campaign, you can use the Search Terms report (which shows the actual searches that triggered your ads) to refine your keywords.

4. Write your ad.

Google search ads typically have three parts: headlines, a display URL, and descriptions – plus various ad extensions (additional info) if you use them. Here’s how to craft each part for maximum impact:

Headline: This is the first thing users see (the blue clickable text in search ads). You have up to 3 headline fields (up to 30 characters each) in expanded text ads – and in the newer Responsive Search Ads, you can provide up to 15 headlines which Google will mix and match. Make your headlines count! Include your keyword in the headline if possible, because if a user sees the exact phrase they searched for in your ad, it signals “this is relevant.”
Description: In the description (up to 90 characters each, and you usually have two fields), you have a bit more room to convince the searcher. Focus on the benefits and features that matter. Why should they choose your product or service? Maybe you offer free shipping, or 24/7 customer support, or a unique solution to their problem. Speak to the user’s needs.
Call to Action (CTA): Always include a clear CTA so the user knows what to do next and is encouraged to act. You might incorporate this into a headline or the description. Phrases like “Call now,” “Get a free quote,” “Sign up today,” “Shop now,” etc. are direct and effective. Don’t assume people will automatically know what to do – spell it out for them.
Display URL: This is the web address shown in your ad (often in green text). It doesn’t have to be the exact URL of your landing page, but it should give an idea of where the user will go.

5. Set your budget and bids.

Essentially, you need to tell Google two things: how much you’re willing to spend per day, and how you want to pay for clicks or conversions (bidding strategy).

Daily Budget: Google Ads uses an average daily budget for each campaign. Think about how much you’re comfortable spending on this campaign per day. A simple way to choose your daily budget is to figure out your monthly budget and then divide by 30.4 (the average number of days in a month). For example, if you can afford about $300 per month on ads, that comes to about $10 per day (since $300/30.4 ≈ $9.87). You’d set $10 as your daily budget.

Bidding Strategies: Next, decide how you want to bid for clicks or conversions. Google Ads offers two broad approaches: manual bidding and automated (smart) bidding.

You can pick automated bidding (Google helps you out) or manual (you set how much you’re willing to pay per click). If you’re new, automated bidding like Maximize Clicks is a super chill way to start while you get the hang of things.

In simple terms, manual = you set bids, automated = Google sets bids for you based on your goal.

6. Target the right people.

You can tell Google where to show your ads – like only to people in certain cities or countries. You can also choose age groups, interests, and even retarget people who’ve already visited your site before.

Location targeting: helps focus your advertising on the right geographic area – which should mean reaching more relevant customers and avoiding waste. Google allows targeting by countries, regions, cities, or even a custom radius (like “20 miles around New York City”). You can exclude areas too (maybe you target the whole country but exclude a state where you don’t operate).

Also, Google Ads has an option called “Audience expansion” (for Display/Video) or will automatically reach “people with similar characteristics” by default in some cases – be aware of these settings. They can help find new customers similar to your targets, but if you want to be strict, you can limit that.

7. Launch it and keep an eye on it.

Once everything’s set, hit Publish and watch how it goes! Check back every few days to see if people are clicking and if you’re getting results. You’ll want to tweak things over time – maybe swap out headlines, pause keywords that aren’t working, or adjust your budget.

Cut what’s not working (or make it cheaper) – e.g., irrelevant queries, poor keywords, low-performing times.
Boost what is working – e.g., top ads, top keywords, best audiences.
Experiment thoughtfully – try new ads, new keywords, maybe new bid strategies (if you started manual, you could test an automated strategy or vice versa) and measure the impact.

So yeah, if you’re thinking about giving it a go, here is my roadmap. You can always pause campaigns, lower budgets, or make changes if something feels off. You’re in total control the whole time.

nikki · March 8, 2025, 4:28pm

Thanks so much for the great guide guys!

I’m a bit unsure about the bidding strategy. I read Pros and Cons of Every Auto Bid Strategy in Google, and I’m starting to think Maximize Clicks might not be the best fit for me. It seems great for driving more traffic, especially for branding and list building, but since my conversion performance isn’t that strong yet, I feel like I need to explore other options.

I’m also curious about the best PPC platforms right now. I know Bing has been gaining traction with ChatGPT, but are there any other platforms you’d recommend looking into? Would really appreciate your insights!

dolay-irem · March 10, 2025, 9:52am

You can try Enhanced CPC for conversion @nikki and you are right that Bing is also gaining traction. Among PPC platforms, Google is on the crown but there are many other platforms for advertising for sure

Search Ads – Text ads that appear on search engine results pages (SERPs) when users query keywords on Google, Bing, etc. These are the classic PPC format: advertisers bid on keywords, and their ad is shown above or alongside organic results, labeled as an “Ad.” For example, a search for “buy running shoes” may show paid text ads at the top. Search ads are intent-driven – they reach people actively looking for something, so they work well for lead generation, e-commerce, and any business that aligns with specific search queries. To succeed, advertisers conduct keyword research and write compelling ad copy that matches the user’s intent.
Display Ads – Banner and image-based ads shown on websites across the Internet via display ad networks. The largest is the Google Display Network (GDN), which includes over 2 million sites and reaches 90% of internet users globally. Display ads come in various sizes (banner, sidebar, MPU, etc.) and can be static images, HTML5 animated, or even videos. They are usually shown to users browsing websites, not as a result of a specific search. Targeting is often contextual (matching ads to relevant site content) or audience-based (interests, demographics, or remarketing). Display ads are excellent for building brand awareness and visibility.
Shopping Ads – Product listing ads that appear on search engines with rich product information. On Google, these are the image thumbnails with product name, price, and retailer, often shown in a carousel at the top of search results or in the Google Shopping tab. Bing and Yahoo have similar shopping ads. Only e-commerce businesses (with a product feed) can use Shopping ads – you submit your product catalog to the engine’s Merchant Center, and the engine matches your products to relevant searches (e.g. a search for “4K TV” triggers shopping ads for various 4K televisions with pictures and prices). Shoppers can quickly compare products directly from the ad.
Video Ads – PPC ads in video format, typically served before or during streaming video content. The prime example is YouTube Ads (managed via Google Ads): these include skippable in-stream ads (the “Skip in 5 seconds” ads before a YouTube video), non-skippable short ads (15-second spots), bumper ads (6-second ads), and video discovery ads (which show as thumbnail suggestions). Other platforms like Facebook, Instagram, and TikTok also allow video ad placements in users’ feeds or stories. Video ads are highly engaging and allow storytelling with sight, sound, and motion – which can leave a stronger impression than static ads. They are often used for brand awareness, product demos, and emotional appeal. With the explosion of video consumption, marketers value video ads: 87% of marketers say video has helped them increase website traffic. (Source: Top 19 PPC Platforms)
Social Media Ads – PPC ads on social platforms (Facebook, Instagram, Twitter, LinkedIn, Pinterest, TikTok, etc.). These can actually be various formats – image, video, carousel, story, message ads – but what unites them is the environment: appearing in social feeds or as sponsored social content. Social media ads allow extremely fine-grained targeting using user profile data (age, gender, location, interests, behaviors, followers, etc.). They often blend in natively with organic posts – for instance, a promoted Facebook post or a sponsored Instagram story looks like other content aside from a small “Sponsored” label. Use cases are broad: social ads can drive conversions (e.g. an Instagram ad with a “Shop Now” for a clothing item), but they especially excel at brand building, community growth, and product discovery. A craft beer brand might run fun video ads on Facebook to build a following, a B2B company could run LinkedIn sponsored content to promote a whitepaper download, and an app developer might use Snapchat or TikTok ads to get new installs. Social ads are well-suited for B2C industries, lifestyle products, and any business that can make visually compelling or sharable content.
Remarketing/Retargeting Ads – A tactic (across display, social, and search) where you target users who previously interacted with your website or content. The idea is to “re-engage” folks who didn’t convert on first visit, or to upsell existing customers. Remarketing often uses display ads: for example, after you browse a product on an e-commerce site and leave, you might start seeing that product’s ads on other websites – that’s retargeting. It can also be done via social ads (e.g. showing Facebook ads to people who visited your site or added to cart) and even via search ads (Google’s RLSA – Remarketing Lists for Search Ads – lets you bid differently for past site visitors searching again). Common remarketing segments include: people who viewed product pages but didn’t buy, cart abandoners, past purchasers (for cross-sell), or readers of certain content on your site.
Native Ads – Paid ads that match the look and feel of the content around them, making them appear less like obvious ads. Unlike banner ads, native ads are designed to be non-disruptive and “blend in” with the platform’s UI. Common native ad formats are sponsored articles or recommended content on news sites (often delivered by networks like Taboola, Outbrain, etc.), in-feed ads on social media that look like normal posts, or sponsored listings on content discovery platforms. For example, on a news site you might see a “Recommended for you” section with articles that are actually paid promotions; those are native ads. Search ads can even be considered a form of native ad because they appear in the search results style (except for the small “Ad” label). Native ads are great for content marketing, brand storytelling, and soft-selling.