Pay-Per-Click (PPC)

Pay-Per-Click (PPC) is an online advertising model where advertisers pay only when someone clicks their ad. PPC is used across search engines (e.g., Google Ads, Microsoft Advertising), social platforms, and shopping ads. It’s commonly called cost-per-click (CPC) advertising.

On search, a real-time auction determines which ads show and in what order. Google’s Ad Rank considers your bid, ad/landing-page quality, expected impact of assets, auction competitiveness, and the searcher’s context (device, location, time, query). 

Microsoft Advertising also operates on a PPC model, allowing advertisers to bid on keywords and pay per click. 

Why It Matters

  • Budget control: You set bids and budgets and pay only for clicks (not just impressions). 

  • Intent targeting: Search PPC reaches people actively looking for products or answers.

  • Measurable impact: With conversion tracking, you can see which clicks lead to sales, leads, or other goals and optimize accordingly. 

Examples

  • Search ads: Text ads triggered by keywords like “best CRM for startups,” charged when clicked. 

  • Shopping ads: Product tiles with price and image that appear on commercial searches; billed per click. 

  • Bing/Microsoft Advertising: PPC across Bing, MSN, and the Microsoft Audience Network. 

Key Concepts & Formulas

  • CTR (Click-Through Rate) = clicks ÷ impressions; gauges ad/keyword effectiveness. 

  • Quality Score (Google Ads) - a 1–10 diagnostic at the keyword level based on expected CTR, ad relevance, and landing-page experience (higher is better). 

  • Ad Rank (Google Ads) - determines position and eligibility; factors include bid, quality, thresholds, competitiveness, context, and asset impact. 

Best Practices

  1. Match intent with relevant ads + landing pages. Improving ad relevance and landing-page experience raises Quality Score and can lower CPC. 

  2. Set up conversion tracking early. Track purchases, sign-ups, or leads to optimize toward outcomes (not just clicks). 

  3. Use negative keywords. Exclude irrelevant queries to cut waste and focus spend. 

  4. Structure for control. Group tightly themed keywords so ad copy can be specific and useful (helps CTR/quality). 

  5. Measure with UTMs + GA4. Tag URLs so GA4 attributes traffic/conversions back to campaigns. 

  6. Iterate creatives & bids. Test headlines, descriptions, and assets; adjust bids/targets based on performance and search terms. 

Related Terms

  • Cost-Per-Click (CPC) 

  • Quality Score / Ad Rank 

  • Negative Keywords 

  • Conversion Tracking / UTM Parameters 

FAQs

Q1. Is PPC only for search engines?
No. While PPC is core to search ads, many platforms use CPC billing (e.g., shopping and some social placements). 

Q2. How do I improve ad position without overspending?
Boost Quality Score by improving expected CTR, ad relevance, and landing-page experience, these affect Ad Rank alongside your bid. 

Q3. Why are negative keywords important?
They prevent your ads from showing on irrelevant searches, saving budget and improving ROI. 

Q4. What should I track beyond clicks?
Track conversions (sales, leads), cost per conversion, and return on ad spend (ROAS) using Google Ads conversion tracking and GA4. 

Q5. Is a higher CTR always better?
CTR is useful, but it’s a means to an end; optimize for qualified conversions and revenue, not clicks alone.



‹ Personalization

Optimization ›