This is the second portion of an general overview of Pay-Per-Click (PPC) advertising. PPC is considered by many to be the “quick & easy” way to show up on the top of the search results page. PPC ads, specifically on Google, are the traditional paid listings on the top and bottom of the SERP. Recently Google decided to add a small “AD” distinction. Unlike SEO, which is focused on organically ranking, PPC is focused on paying to rank at the top of the search results page for specific keywords and phrases.
How It Works – Bidding & Relevancy
You are able to set your bid to whatever a single click is worth to you, say $1.00. If your competition thinks a click is only worth $0.50 to them then you will actually pay $0.51 not $1.00. You will however, pay more if your relevancy or quality is deemed too low.
For example, if you are trying to bid on the word Coffee shops and you are a shoe store that gives coffee to clients while they shop you would not be considered relevant to that keyword. Google will then make you pay a premium for targeting a term they deem irrelevant to your business. Say again you bid $1.00 and your competitor bids $0.50. In this case you may pay $0.55, $0.60, or even $1.00 even though your competitors bid is much lower than your own.
Say the inverse is true. You are a coffee shop and some shoe store is targeting the keyword “Fair Trade Coffee”. You are only bidding $0.50 for a click and they are bidding $1.00. Your website has pages and pages of research, documentation, and information about fair trade coffee, and their website mentions it once or twice. Google will choose to rank you above them even though they are bidding more. This is because your quality is higher and your page is more relevant to the users search.
How It Works – Ad Auctions
You are able to purchase ads and keywords and tell Google when someone searches for “X” show them this ad. The amount for your listing to be ranked at the top of the SERP varies greatly. There are many factors that go into how much each ad click will cost you. Some of the main factors include your bid, the competition, your relevancy, and your perceived quality. All of these items go into calculating your Quality Score (QS). Your Quality Score – which is a value Google assigns your ads based on Text Relevancy, Keywords, Engagement and a few other factors. Your QS can range from 1 to 10, with 1 being horrific and 10 being superhuman. Most keywords will receive a quality score somewhere in the 4-8 range. Google then takes your assigned QS and multiplies it by your Bid to calculate what is called Ad Rank. Ad rank is what Google uses to rank ads over one another. The highest total Ad Rank wins the auction. The ad with the highest Ad Rank will win the #1 position in the Ad auction. The ad with the second highest AR will rank second, third will rank third, etc.
How It Works – Automatic Bidding
When you tell Google to automatically bid for you what is it doing? Say you want to always rank at the top of the page. Or maybe you tell Google that you always want to outrank your competitor -“example.com”. Google is going to adjust your bid so that your Ad Rank will be greater than anyone else in the auction. If you ask Google to maximize your clicks they will adjust your bid in an effort to get you a respectable placement on the page while maximizing your available budget (according to their predictive models).
Why Choose PPC?
PPC is a great way to quickly start driving traffic to your website while being in complete control of your costs. You control exactly how much you are going to spend each day and how much each click is worth to you. Google works within that budget to get you your desired results. These results can vary depending on your goals. You can maximize clicks to drive the most traffic to your site. You can maximize conversions (sales, contact form fills, video views). Your campaign can be set to maximize views and exposure for branding purposes, as well as many more options.
Google and other PPC companies have worked very hard to make sure that you have total control of your account. You can tell them directly who you want to reach and when. In addition you can tell them what you want them to do once they are on your website and they will target people most likely to complete these actions. It is cost effective, highly targeted, and can be turned on and off at a moments notice – giving you the ultimate flexibility.
Your bid multiplied by your quality score (as determined by Google) gives you your Ad Rank. Highest Ad Rank wins the auction. If you implement an automated bidding strategy Google adjust your bid to the perfect level so your Ad Rank wins the auction.
Ad Rank (AR) = Bid ($) x Quality Score (QS)