Paid Search Advertising (PPC): How it Works

In today’s ever-expanding digital marketing world, there are a plethora of options to reach potential customers. But if you’re looking for the most cost-effective way to drive leads and sales growth — look no further than Paid Search Advertising (PPC).

What is Paid Search Advertising?

Paid search marketing, also known as pay-per-click (PPC) advertising, is a digital marketing strategy in which businesses pay search engines or advertising platforms like Google Ads to display their ads prominently in search engine results and on various websites.

Advertisers select specific keywords or phrases that are relevant to their products or services, and they bid on these keywords to have their ads appear when users search for those terms. When someone clicks on their ad, the advertiser pays a fee, hence the name “pay-per-click.” 

Paid search marketing is highly targeted, allowing businesses to reach a specific audience and control their budget effectively. It provides immediate visibility and is a measurable way to drive traffic, generate leads, and increase sales, making it a crucial component of many digital marketing strategies.

Paid search tools and platforms offer a range of powerful features, including keyword targeting, ad scheduling, geographic targeting, and detailed analytics, allowing advertisers to tailor their campaigns to specific demographics and user behaviors.

Paid search not only boosts your online visibility but also enables you to measure the ROI of your advertising efforts, making it a versatile and cost-effective way to drive traffic, generate leads, and increase sales for your business.

Let’s break down what paid search is, how it works, and how it’s different from SEO.

How Does Paid Search Work?

The paid search services process begins when an advertiser or an advertiser’s digital advertising agency identifies keywords that can drive business value.  From there, maximum bids are set for each of the selected keywords.

Paid search uses an auction system to determine which ads show on the Search Engine Results Page (SERP).  The auction results also dictate how the ads rank.  It’s important to note that bidding more for a keyword than a competitor won’t guarantee a higher ranking. When determining your ad rank, a keywords’ quality score and the maximum bid will determine where you rank.

Key elements of Paid Search Advertising

Paid search is a form of digital media buying where you pay search engines such as Google or Bing for ad space on their search engine results page (SERP).

Before you can start using this powerful digital marketing tool, know that it involves crafting campaigns around four key elements:

1. Keywords

Keywords are the foundation of any paid search service campaign. These are the words and phrases that users type into search engines when looking for products or information. Effective keyword research is crucial to identify the terms most relevant to your business and target audience. Keywords are the building blocks of paid search marketing. They define who sees your ads and when, making keyword research, selection, and management crucial components of a successful PPC campaign.

2. Ads

Paid search ads are text-based advertisements that typically appear above and below organic search results on a search engine results page. They can also appear on Google Maps, besides local listings, YouTube, and other keyword-related environments.

3. Campaign structure & targeting

Campaigns and ad groups organize paid search campaigns. The campaign level is where you set daily budgets and other targeting criteria (Geography, day-part, etc.).  Ad groups will go under a campaign to group similar keywords with the most relevant ad text.  You can also control bidding and other tracking parameters at the ad group level.

4. Bidding

Pay-per-click works just like it sounds. You only pay when someone clicks on your ad. What’s even better, you can set a maximum bid for each keyword to ensure you never pay more than you want for a click.

How are Paid Search Ads Ranked?

When ranking an ad, search engines use two factors – maximum bid and quality score.   The maximum bid is straightforward.  It’s how much you are willing to pay if someone clicks on your ad. The quality score is more involved and is affected by keyword and ad relevance, landing page experience, and expected click-thru rate (CTR).

3 major PPC ad components to focus on are:

1. Landing Page Experience

The landing page is an essential part of your ad. Ensure your landing page is relevant to the keyword search, provides a fast and seamless user experience, and delivers what the ad text promises.

2. Ad Relevance

Searchers are looking for specific products, services, and information, so your ad needs to be highly targeted and relevant to users.

3. Expected Click-Thru Rate (CTR)

How likely is your ad to be clicked on? Google estimates CTR on your historical performance, similar advertisers’ historical performance, and the Google Ads features you use.

Writing Paid Search Ads

Writing Paid Search text ad copy is a critical part of any PPC search campaign. The key to writing ad copy is to make sure it’s relevant, specific, and engaging to your target audience. Your ads should be concise and to the point, making sure to use the keywords you are bidding on.

The components of a Paid Search ad include:

  • Headline
    This is the main title of your ad that appears in bold text at the top of the ad on the search results page. It is limited to 30 characters.
  • Description Lines
    These are two short lines of text that provide more details about your product or service. Each line is limited to 90 characters.
  • Display URL
    This is the visible URL that appears beneath your ad. It can be customized to show your brand name or relevant keyword.
  • Final URL
    This is the landing page URL that users are directed to when they click your ad.
  • Ad Extensions
    These are additional pieces of information that can be added to your ad to provide more context and encourage clicks. These could include location information, costs, or other important information for your audience.

What is the Difference Between Paid Search and Organic Search?

Organic search results appear on the same page with paid search ads. However, instead of placing bids and paying-per-click to appear, you earn organic search results by investing in Search Engine Optimization (SEO). Organic results are free listings that appear in search engine results pages (SERPs) because it’s relevant to someone’s search terms. Businesses use SEO to optimize their site’s visibility or rankings in search results to increase website traffic, attract more leads and customers, and ultimately drive revenue.

So, organic search marketing is the better option? Not necessarily. There is still a cost-per-click (CPC) to SEO.

SEO takes time. Depending on how established your website is and the popularity of keywords you want to rank higher for, it can take months or even years to get in the top 10 results. Every hour you, your employees, or your digital marketing agency spend working on SEO content costs money.

Paid search can get your ads to appear on the first page of results quickly. This is possible with the right strategy and content for the paid search keywords that are important for your business.

Impact of  paid search engine optimization strategies

Paid search engine optimization (SEO) strategies have a significant impact on businesses’ online visibility, traffic, and overall digital marketing success. These strategies allow companies to bid on keywords and display their ads prominently in search engine results and on various online platforms. 

By leveraging paid SEO, businesses can gain immediate visibility in search results, effectively targeting specific keywords and demographics. This increased visibility can lead to a higher volume of website traffic and potential customers, boosting brand awareness and revenue. Paid SEO also offers precise tracking and analytics, enabling businesses to measure the ROI of their campaigns in real-time and make data-driven adjustments for improved performance. 

Moreover, it complements organic SEO efforts by occupying prime search result real estate, giving businesses a competitive edge in capturing the attention of their target audience. Overall, paid SEO strategies play a pivotal role in a well-rounded digital marketing strategy, providing businesses with a powerful tool to drive results and achieve their online marketing objectives.

In today’s digital-first marketplace, thriving businesses use paid search advertising and paid search engine optimization strategies to gain an advantage over the competition.

Learn more about Search Engine Optimization (SEO) and why it matters.

Learn more about Paid Search Advertising (PPC) and why you need it.

Not sure where to start or what questions to ask?  We developed our pathfinder™ process just for you.


Blog Last Updated on 3 months by New Path Digital

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