Pay Per Click Advertising Explained by a Non-PPC Person

Mike Fitterer

Pay Per Click Advertising (PPC) should be an integral part of every company’s online marketing strategy. Seriously, it’s legit. After all, what marketer wouldn’t like having totally transparent marketing spend and return data available just a few clicks away? Oh, every marketer likes that sort of data? That’s what I thought.

Here’s the problem. Most people don’t actually understand PPC. Many aren’t even sure what PPC is. In many minds it’s like the functionality of a TV set – you just turn it on and BAM, it works!

Well, surprisingly enough that’s not the case. That’s why I’m here to tell you about the basics of PPC and why you should care.

PPC….What is it?

Here is a handy-dandy (extremely brief) overview of what PPC is.

At its core, PPC is a 3 part process:

  1. Advertisers create ads to show in search results and select the keywords they want associated with that ad.
  2. Advertisers set how much they want to spend each day + how much they want to spend every time an ad is clicked.
  3. Search engines show the ads when relevant searches that match the advertiser’s keywords are shown.

At its core, PPC is that simple.

However, these days the search engines are constantly tweaking search results. Here are just a few of the multitude of examples:

Traditional Result – Text ads at the top of the page and in the right navigation area

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Product Listing Ads – Image ads with product name, price and source


Sitelinks – Links to pages on a given site that can be included as part of an ad


So what’s with all of the variations? Well, their outward goal is always to provide users with the best possible search experience. That said, ads are often very prominently displayed whenever possible in order to “contribute” to the experience. Why not enhance usability and make $50 billion dollars like Google did from advertising revenue in 2013¹, right?

Why should we care?

PPC marketing is the way of the future – now!

In all seriousness, marketers are beginning to understand the massive value in PPC marketing. A recent PPC Hero survey found that Internet advertising will make up nearly 25% of the entire ad market by 2015! Furthermore, 72% of PPC marketers have plans to increase PPC budget this year.

One massive reason for the increase in focus on PPC is how quantifiable it is as a marketing option. A whole plethora of key performance indicators can be easily tracked such as clicks, average cost per click, the conversion rate, and total conversions. Most importantly, revenue and return can be tracked in almost real time.

PPC is also great from a branding perspective.  Why make it hard for customers to find you? For a much lower price than you pay for non-branded terms, you can get top branded paid results to accompany a top branded organic listing. On that note, if there’s a short-term slogan, sale, or incentive, that can also be easily advertised via branded.

Microsoft is a great example of maximizing available branded real estate. They use sitelink extensions (both paid and organic) and are not afraid to display incentives with non-branded terms.


Naturally, if competitors are bidding on your branded terms you don’t want them to have the top spot and steal traffic. Luckily search engines tend to give an advantage to brands. Plus, it’s way cheaper to bid on your brand than it is for competitors to pay to show up for your branded terms.

What’s the magic tonic that brings ads to life?

We’ve now covered what PPC is and why it’s important. Let’s now delve into how the PPC magic is created.

Actually, for most advertising platforms, it’s pretty simple. Each domain ( normally has 1 domain per account (more are possible, but not advised). Under this account, there is a campaign. Let’s use bedding as an example. A campaign is composed of a set of ad groups that share a common overall theme, such as “Pillows” or “Blankets.” The ad groups (an ad group contains ads, keywords, and bids) share a budget, targeting based on geographic location, and some other settings. They hold settings like daily budget and ad scheduling. In general, campaigns organize services or products you offer.

Below the campaign level is the ad group. The ad group level is where product type is distinguished. Using our bedding example one group could contain “Down Blankets” with another one covering “Fleece Blankets.” Specific keywords, ads, and bids fold up into each ad group.

The final level is ads and keywords themselves. When searched for, the keywords push to an ad. Settings for how exact a search query must be in order for the ad to display can easily be modified by campaign, ad group, or even individual ad, those are called match types.

Here’s a visual aide to clarify the typical levels of a given account:



Here’s a brief reminder in case you opted to scan through this post.

A. PPC is a 3-part process:

1. Advertisers create ads and select associated keywords to be displayed in search results

2. Advertisers set the daily and per-click spend of an ad

3. Ads are displayed by the search engines when a relevant search matches an advertiser’s select keywords

B. There are many ways in which ads are displayed by the search engines including traditional, shopping, and site links, to name just a few.

C. You should care about PPC because it’s a growing and proven method of advertisement, results can be easily quantified, and PPC can help grow and protect your brand name.

D. Most PPC platforms are set up in the following top-to-bottom fashion:

Account > Campaign > Ad Group > Ads + Keywords

Please feel free to share any comments or questions you may have below.

If you only remember one thing from this now long-winded tutorial it should be that PPC is great and your company should be doing it.

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  1. Hey Mike, great intro piece. I was dining with a solopreneur friend the other night who had difficulty with PPC (spent $1000 on adwords, got 0 sales in return) and is now disheartened by PPC. I’ll share this with him now. Thanks

    1. Hi Cam,
      Definitely feel free to share it! Based on your note it sounds as though your friend tested on her/his own.
      I suspect if a PPC professional runs the next test the results will be more indicative of PPC potential. Actions such as keyword research, campaign setup, bid management, etc. are definitely acquired skill sets.
      If a professional did run the test changing the parameters (keyterms, landing pages, time of day targeting, and the like) is definitely in order before the next test runs, as these results were clearly very underwhelming.
      I hope this info helps!

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