Search engine advertising is one of the most popular forms of PPC. It allows advertisers to bid for ad placement in a search engine's sponsored links when someone searches on a keyword that is related to their business offering. For example, if we bid on the keyword “PPC software,” our ad might show up in the very top spot on the Google results page.
A lot goes into building a winning PPC campaign: from researching and selecting the right keywords, to organizing those keywords into well-organized campaigns and ad groups, to setting up PPC landing pages that are optimized for conversions. Search engines reward advertisers who can create relevant, intelligently targeted pay-per-click campaigns by charging them less for ad clicks.
If your ads and landing pages are useful and satisfying to users, Google charges you less per click, leading to higher profits for your business.
Google Ads (formerly known as Google AdWords) is the single most popular PPC advertising system in the world. The Ads platform enables businesses to create ads that appear on Google’s search engine and other Google properties. Google Ads operates on a pay-per-click model, in which users bid on keywords and pay for each click on their advertisements. Every time a search is initiated, Google digs into the pool of Ads advertisers and chooses a set of winners to appear in the valuable ad space on its search results page.
The “winners” are chosen based on a combination of factors, including the quality and relevance of their keywords and ad campaigns, as well as the size of their keyword bids. More specifically, who gets to appear on the page is based on and advertiser’s Ad Rank, a metric calculated by multiplying two key factors – CPC Bid (the highest amount an advertiser is willing to spend) and Quality Score (a value that takes into account your click-through rate, relevance, and landing page quality). This system allows winning advertisers to reach potential customers at a cost that fits their budget. It’s essentially a kind of auction. The below infographic illustrates how this auction system works.