Beginners guide to Pay Per Click (PPC) advertising

Updated: Jun 8, 2020

This guide looks to introduce start-ups and SME's to the PPC channel from a high level, break down how it works and the various options you have available in the Google AdWords platform.

What is pay per click advertising

Pay per click advertising, or PPC, allows you to create content and show it to relevant users online to build brand awareness, generate traffic and drive conversions.

How it works

How do Google rank your ads?

Google’s Ad Rank determines where you rank versus your competitors, which is calculated by multiplying two key factors –

  1. CPC - Bid The highest amount an advertiser is willing to spend

  2. Quality Score - A value that takes into account your click-through rate, relevance, and landing page quality.

To get the best results you need to bid the right amount and create quality ads for your customers.

How are you charged?

You pay when a user clicks on an ad. This is known as the Cost-Per-Click (CPC). The media spend is paid directly to Google and is a large part of how Google generate their revenue. You don’t pay for impressions on your ads or organic clicks. It’s important to develop a strategy to minimise wastage in spend and maximise efficiency of your budget.

Paid vs organic search

PPC ads typically appear above the organic listings and a re labelled as an Ad or Sponsored listing. When a user searches for a product or service, several adverts are usually displayed with different types of results depending on what you are searching for. Organic search is based on unpaid, natural rankings determined by search engine algorithms, and can be optimised with various SEO practices. 

 There are four main PPC ad types...

  1. Text ads (search)

A text ad is composed of a written copy and is shown on the results page after a user enters a keyword that triggers one of the ads. It is related directly to the list of keywords within the campaign and should be tailored to your landing page content - user’s expectations are appropriately set if they choose to click on your ad. Ad content must meet editorial guidelines and will risk being disapproved if it violates any of those guidelines. Google AdWords and Microsoft Advertising have different editorial guidelines.

Text ads are great for brand awareness and driving traffic. 

2. Shopping ads

Shopping Ads don’t use keywords, they use product data from your website to match with what a user searches for. 

They are shown at the top Google when searching for products that are sold online, such as “nike shoes” or “trainers”. 

They provide an opportunity for the user to visually compare products in Google before clicking through to any websites. 

Shopping supports upper funnel awareness initiatives, as well as driving lower funnel conversions for exact phrases. 

Google Shopping ads are great for selling products and increasing product visibility.

Google Merchant Centre

The quality of your product feed will have the greatest impact on the performance of your Shopping campaigns. 

Google Shopping campaigns are set up in the Merchant Centre platform (MC). The MC is an online dashboard where you control product data. 

The primary goal of the MC is to allow businesses to upload and maintain product information including pictures and pricing. 

You can check that your product feed meets Google’s feed specification and regularly update your feed.

3. Display ads

Ads are created and promoted on the Google Display Network (GDN) a network of website which run Google ads. 

They typically contain image ads or video ads, which are then shown to users who match your targeting criteria. 

If a user visits your website you can display a image/video ad and try to get them back to your website. This process is called remarketing. 

Advertisers must comply when creating their visual creative and there is a variety of banner and video sizes. 

Google Display ads are great for brand awareness and launching campaigns.

4. Video ads (YouTube)

TrueView is Google’s paid video advertising program where you only pay when someone chooses to watch your video ad. 

You can create different ad types including: 

In-stream ads play before or during another video from a YouTube partner. Viewers see five seconds of your video and then have the choice to keep watching or skip it. 

Video discovery ads appear alongside other YouTube videos, in YouTube search pages, or on websites on the Google Display Network that match your target audience. 

Bumper ads are six second duration or less and play before, during or after another video. Viewers don’t have the option to skip the ad. 

You can reach a highly engaged audience at the right time and the cost per view is relatively low i.e £0.02. 

Gain access to YouTube’s advanced analytics suite which includes detailed content and performance insights. 

YouTube Ads are great for reaching new audiences and generating awareness.

Key benefits of PPC 

  • Scale - Grow your business online with more traffic and sales. 

  • Targeted advertising - Reach the right people at the right time with your campaigns. 

  • Measurable - PPC advertising gives you quantifiable ROI, which allows you to see exactly what you are getting out of the ads. 

  • Transparency - Set a budget that works for your business and see exactly how your budget has been spent with no unexpected bills.

  • Brand awareness - You can get your brand and your message in front of new audiences and customers. 

  • Speed - If managed effectively, PPC marketing is one of the fastest digital marketing strategies to drive traffic and conversion growth. 

PPC benefits to other channels

  • Improvement in secondary goals - An increase in traffic through PPC can have benefits to your marketing for example you may receive an increase in the number of mailing list subscribers, remarketing audience size and engagement.

  • Content amplification - Driving PPC traffic to your content pieces, such as YouTube videos will help amplify your brand. Combining your content with PPC allows you to capitalise on your content marketing strategy.

  • Increase in your organic traffic - Searchers who have been previously exposed to your brand through PPC may be more likely to click and engage on organic content in the future. A higher Click-Through-Rate (CTR) and a higher engagement rate can lead to increases in traffic.

  • Increase in social mentions - Driving traffic to your site through PPC can cause positive after effects, such as social mentions, sharing links etc to your content page. These will all serve to send strong signals to Google that your page is very relevant to the topic at hand. Of course this means a boost to your organic traffic!

Potential pitfalls of PPC

  • Cost - Depending on your competition and the industry you work in, PPC marketing can be very expensive. Some ad placements can be costly and it isn’t profitable for every business.

  • Time investment - Due to the technical nature of most PPC platforms such as Google AdWords, wasted ad spend is common without knowledge of the platform. You can’t set up PPC campaigns and leave them. You need to invest time into optimising and improving to get the best results.

  • Expertise - Due to its complexity it can take some practice and expertise to set up effective campaigns. This does not mean that learning PPC is not for everyone. It simply means that more time and effort is needed to learn how to maximize PPC compared to other digital marketing strategies. 


  1. PPC advertising allows you to create content and show it to relevant users online to build brand awareness, generate traffic and drive conversions.

  2. There are four main advertising options for campaigns:

  • Text ads 

  • Shopping ads 

  • Display ads 

  • Video ads

  1. Pros of PPC - Speed, precision, agility and measurement of your marketing campaign.

  2. Cons of PPC - Cost, time investment and expertise required to deliver the campaigns.

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PPC Terminology

Keywords - words or phrases that are used to match your ads with the terms that people are searching for.

Impressions - are counted each time your ad is served on Google networks such as and YouTube. Impressions help you understand how often your ad is being seen.

Click-through-rate (CTR) - A measure of how often people click your ad after it’s shown to them which can help you understand the effectiveness of your ad. CTR is calculated by clicks/impressions.

Cost per click (CPC) - The price you pay for each click. The price is dependant on how competitive the keyword is.

Conversion - The point at which a visitor completes a desired goal after entering the website. This can be filling out a form or making a purchase.

Return on ad spend (ROAS) - A KPI metric used to determine campaign effectiveness. ROAS is calculated by revenue/cost. A ROAS higher than means the campaign is generating more revenue than expenses.

Quality Score - Google’s rating of the quality and relevance of both your keywords and PPC ads. It’s marked out of and depends on your CTR, the relevance of keyword to ads and landing page quality and relevance.

Search Impression Share - How often your ad impressions are shown in the most prominent positions (shown as a percentage).

SI lost to Budget - How often your ad didn’t show anywhere above the organic search results due to low budget (shown as a percentage).

SI lost to Rank - How often your ad didn’t show due to poor ad rank - low ad positions and low quality scores (shown as a percentage).


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