KISS Series: PPC

As part of our mission to educate small business owners with digital knowledge, we have created the KISS Series (Keep It Super Simple), where we take digital theories and concepts and break them down into bitesize, understandable explanations.

In this post, we break down what PPC means, why it matters and how it works.

Content:

• Introduction: PPC

• How PPC works

• The Benefits of PPC

• Why We Prefer SEO

• The Beauty of Coexistence!

• Conclusion

PPC: Pay Per Click

PPC stands for Pay Per Click, which pretty much describes exactly what it is. They are paid adverts, and each click costs money, hence the name Pay Per Click, as it is a form of marketing where the advertiser pays for each time a user clicks on the ad link. This is in contrast to SEO, which is the way search engines like Google rank websites on a list of search results to a particular query.

(If you are unfamiliar with SEO, we suggest you read our KISS guide to SEO before proceeding with PPC)

PPC is most commonly associated with Google, but can be found on search engines, as well as platforms that allow paid adverts, such as Facebook, Instagram etc, as they all operate under the same concept that advertisers pay for each click they get on that particular advert (in social media's case, post). However, as Google is the most common platform where PPC is used, this article will reference Google throughout.

As a result, this means that the SERP (Search Engine Results Page) is divided into two sections: paid and organic. Paid is displayed at the top of each page, and will be called out with the word "Ad" or "Sponsored" to signify that this is a paid post. The organic list follows afterwards, and they do not contain the words "Ad" or "Sponsored" or anything to suggest it is a paid advert.

If your Google just continues to scroll, rather than having the old Page 1, 2, 3 etc format, you will notice paid ads popping up as Google essentially loads the second page of the search results. Technically, the ad is appearing at the top of the second page; it's just the second page is loaded underneath the first page of results in an endless scroll format.

How PPC Works

Where SEO and PPC are similar is they both rely on keywords, but that's pretty much where the similarities end. Think of it this way: SEO is part of your website, PPC is a separate ad campaign. So from a keyword perspective, for SEO keywords are incorporated into your website and copy (which is essentially free if you do it yourself), but for PPC you have to bid on the keyword to win the ad space for it, which means you have to have a budget to run the ad campaign, and also a set target for it to ensure it finds the right demographic...

Whoa, whoa, whoa. Bids? Targets? Let's take it back a step and use an example. Let's also simplify the results page and say just one paid ad will appear, rather than the multiple slots that are now available.

You have a jewellery business. You want to grow your brand awareness, and decide to use a PPC ad campaign. The first thing you would do is decide what searches you want to be targeting. Your pendant necklace is your strongest product, so you probably want to appear if someone searches "necklace". This means "necklace" is your keyword and you would bid on that word so your advert appears at the top of the "necklace" results page. The trouble is, other brands such as Monica Vinader, Tiffany, Olivia Burton and others would probably be bidding on those terms too, and not everybody can occupy that one paid ad slot.

So then Google looks at all the brands that want to bid on the term "necklace" and analyses their budgets and instructions. You think "bid", you (probably) think "auction", and that is kind of how PPC works. If you've set your bid per click (referred to as CPC, Cost Per Click, in the industry) to £0.50, this means for every click you get via that advert, you pay 50p to Google. But if Monica Vinader bids £0.60 per click, this means they have a higher bid than you, so they win the "auction" and thus the ad space.

However, they will also have a limit on how much they want to spend on the ad campaign. Yes, 60p doesn't seem a lot, but if you multiply that by an average monthly search volume of 50,000 (yes, this is an unlikely assumption that every person clicks the ad, but stranger things have happened), that adds up to £30,000. So you (and all the other brands) have to tell Google what your limit is to avoid surprise overspends.

Let's say Monica Vinader cap their PPC campaign at £5,000. When they've exhausted their budget, their campaign is no longer live, so their bid is taken off the market. If your bid is £0.50 and the next competitor Tiffany is £0.30, then your bid is higher, so you will win the ad space, and your ad will start appearing at the top, until you've spent all your budget, then your campaign stops and the space goes to the next highest bidder, Tiffany.

This is a very simple version of how PPC works. Nowadays there are multiple ad slots, and there are other considerations such as the geographical location of your business (no point targeting searches in Brazil if you don't ship there), but all you need to understand is the basic premise of how PPC works.

The Benefits of PPC

There are many benefits to running a PPC campaign, such as:

Benefit #1: PPC campaigns boost traffic quickly

If you've set all your campaign parameters right and your ad goes live without a hitch, you will likely see your traffic boost quickly. After all, you will be the first thing people see when they search for your specific term. Logically, increased traffic should lead to increased sales, so that means a quick win overall.

(However, in our experience, this is not always the case; we will discuss later.)

Benefit #2: PPC campaigns are precise

As mentioned above, PPC campaigns allow geographic and demographic targeting. Assuming you're from the UK, have you ever clicked on a link in the organic part of the results, only to realise that you're on an American website when you actually wanted to see British results which would be more relevant to you? With PPC, you can ensure you target specific areas, specific age ranges, even their interests and habits, so you can ensure your ad is surfaced to only the relevant people, which in turn increases the chances that they click on the ad and engage with your website.

Benefit #3: You can bid on competitors and/or piggyback

This is not always possible. Some brands and companies have stringent policies on who can bid on certain terms including their brand name and they are not afraid to enforce it. However, it is a great way to gain awareness, especially off the back of a bigger competitor. Using the aforementioned jewellery brand, it may be an idea to bid on the brand/term "Oliver Bonas", so when people search for Oliver Bonas, your ad will show up, thereby raising awareness of your brand and potentially earning a click. More often than not, this is a risky strategy: when people search for a specific brand, the chances are they've made their mind up to buy the brand. However, it is technically an option to consider, especially for smaller or niche industries.

Equally, if you own a store that stocks multiple brands, you could bid on the names of your bestselling brands to piggyback off their search volumes. So if you own a shoe store, you could bid on the term "Nike", so when people search for Nike, your store's ad will show up, demonstrating that you stock that brand and thus bringing potential customers onto the site.

Benefit #4: PPC messages are current

With SEO, you want to keep your brand message timeless, as that lives on the search page all year round, but with PPC you have the opportunity to change the ad message to be reflective of any current promotions or messages. You will notice that around Black Friday, a lot of the ads you get served will include the term Black Friday or the percentage of discount that company is offering. This is because, much like any ad campaign, PPC allows companies the opportunity to specify what exactly they're advertising and when. So you can use this to your advantage to highlight any particular promotions or key messages you want to deliver for that period of time.

Benefit #5: PPC results can be measured

SEO results aren't always measurable. You can do a lot of things that contribute to a rise in rankings, but it's not always easy to pinpoint exactly what worked. With PPC, you get insights and data such as impressions (number of times the ad was shown to a user), clicks and so on, so you can quickly figure out what worked and what didn't, and also compare ad campaigns to see what method or style was more effective, allowing you to finetune your advertising strategy going forward.

Benefit #6: You can own your brand space

Search any big brand like Nike, Tommy Hilfiger or Clarks, and you'll notice that they actually bid on themselves. This helps to ensure they own their brand space and that the first link that is served to the user is a link to their own website. Yes, we mentioned competitor bidding and piggybacking so this is not always the case, but theoretically it does mean you own the search term and ensure that the first ad served is officially yours.

Why We Prefer SEO

While there are benefits to PPC, there are also some real issues that cannot be overlooked.

Issue #1: PPC is not sustainable long-term

I have worked with retailers who, in the face of decreased organic traffic versus last year, invest heavily in PPC to get the traffic numbers back up. Of course, this works, since PPC is a great way to deliver traffic boosts. Yay! We're back to matching last year's traffic! But the moment you switch off your campaign, the traffic numbers drops back down, because your ad is no longer appearing at the top of the page. So then you run another PPC campaign to chase last year's number, but every time you run a campaign, you have to pay. So very quickly, the spending starts to pile up.

Therefore, PPC is a great way to deliver a temporary boost, but it is not a sustainable long-term option, as it requires constant monetary investment. Instead, while SEO requires time investment, it is much more cost-efficient in the long run, and has a much more long-lasting effect on your website's ranking and visibility to the customer.

Issue #2: PPC requires a lot of attention

This is not to say other aspects of your website don't require attention. But PPC needs so much attention. Not just from a budget and bidding side, but even down to the wording of the ads. You have to ensure your ad message is updated to be relevant to the now. Have you ever seen ad links advertising a sale, but then you click on the link and the whole page is already full price? If an ad campaign spans a long period of time to cover key trading moments, or if you have varying levels of discounts week by week, you have to remember to change the ad message every time. If not, you will notice that your ad drives a lot of traffic, but then people leave your site quickly when they realise your ad message doesn't match your actual offering.

Sounds obvious, right? I've worked for and with big brands and retailers; they have all made this mistake before, and not even just the once. And this is with a team of people dedicated to PPC messaging. When you're running your own business, you may not have the time or capacity to tweak your messaging while you're on the road.

Issue #3: PPC requires budget

As we've mentioned, PPC ads requires money as you are paying for each click. This means you have to set aside a pot of marketing money in your budget to dedicate to PPC campaigns. On average, businesses can spend between £600 to even £10,000 per month just on PPC advertising. Of course, you can spend less, but this would mean you reach fewer potential customers, especially if you bid on keywords that loads of other companies bid on as well. So when you're a small business with a more restricted budget, PPC may not always be a feasible option.

Issue #4: Consumers see through ads

You may think if an ad is the first thing that appears on a page, it must be the most clicked link? Fair assumption, but that is incorrect. According to FirstPageSage, the first ad actually only gets a 2.1% clickthrough rate, meaning only 2.1% of people who saw the ad clicked on it. In contrast, the first organic link, which is below the first ad on the page, gets a 40% clickthrough rate.

This comes down to consumer mindset and psychology. We know brands pay for their adverts, so when we see an ad, we immediately question whether it is actually relevant to us, or if they're somehow bending the truth to win that purchase. In contrast, while not everybody understands the intricacies of SEO (though you can with our KISS guide to SEO!), the general public trust Google and their algorithms to provide the most relevant answers to their queries at the top of the search results page, which is why so many people scroll past the ads. According to research by Richman, consumers believe that organic search results are 60% more relevant and 46% more trustworthy than ads.

Think of it this way. In real life, we're served hundreds of ads a day, but often what cuts through and convinces you to purchase or to use a particular vendor is the advice and endorsement from a family member, friend, or someone you trust. The same logic applies to online search results.

Issue #5: PPC consumers don't always purchase

This is more specific to eCommerce stores, though the logic can be applied to services such as hospitality. Some websites and agencies say one of the downsides to PPC is that additional traffic does not equal the same amount of additional sales. We agree with the premise but not this particular explanation, because disproportionate increases in traffic and sales is not exclusive to PPC. SEO has the same issue, whereby increased visits to your website may not translate to increased sales if your user experience is poor or your pages are not optimised.

Instead, we believe it's because customers who land on your page via paid ads have a lower propensity to purchase compared to those who find you via organic traffic. According to past experience, the conversion rate of paid traffic is between 4-6 percent points lower than that of organic traffic, with a lower average order value as well. This means you could get 1,000 visitors via each channel, but only 40 PPC-driven visits will result in a purchase, compared to 90 converted purchases from SEO-driven visits.

The reasons for this may vary. A lot has to do with the aforementioned consumer psychology. Other times, people could click on the PPC ad out of curiosity, but end up using their preferred retailer instead. I have seen things online that I like, then checked my preferred retailers like John Lewis or ASOS to see if they have those products available because I prefer their customer service. Or sometimes, people click on ads to do price comparisons, to ensure they are getting the best deal there is. Therefore, more often than not, we have seen that paid traffic (PPC) does not convert as highly as organic traffic (SEO), which is why we prefer the latter because it generates high quality traffic, ie people who are in the purchasing mindset.

The Beauty of Coexistence

Does this mean that you should bypass PPC? Absolutely not! The two can and absolutely should coexist.

Think of a global brand like Apple. They have built a solid and strong brand foundation. The consistent look and feel of their products, their user interface, how the brand makes users feel. That is the equivalent of SEO: the core identity of the brand. But when there is a new product launch, or perhaps when a competitor like Samsung advertises their new launch, Apple will put adverts out on billboards and TV. That is the equivalent of PPC: advertising new products or key messages, or even piggybacking off competitor activity to remind consumers of their own relevance.

At Mpowering Solutions, we recommend focusing on SEO first because it is best to build a strong foundation and it has long-lasting effects. If you opt straight for PPC advertising without sorting our your website's basic functionality, you can attract a million new visitors via PPC and not convert a single one, so it will end up being a futile exercise. Once your website is optimised, then you can look towards PPC to bring in the boost in traffic you want or need.

TL;DR Conclusion

• PPC stands for Pay Per Click, and is a form of online advertising where you literally pay for each click

• PPC has many benefits, but is not a long-term solution. Instead, focus on your website functionality, look and feel and user experience (ie SEO)

• However, this does not mean you should ignore PPC. PPC and SEO can coexist, and serve different functions, so it is worth looking into PPC when the time is right

• At Mpowering Solutions, we do not offer PPC services off the bat due to our preference for SEO. If you want to discuss how to better your SEO, get in touch and we'll be happy to explain our SEO Audit a bit more. If you have already worked with us on your SEO and want to explore PPC, get in touch and we can explore the options right for you