Every business owner knows the value of the internet. Especially when it comes to marketing their business.

But where do you start?

Pay-per-click advertising is one of the most effective ways to reach your market in all stages of the funnel.

This advertising method is becoming a growing force in the digital world – and rightly so. Pay-per-click campaigns can be a valuable tool in your marketing arsenal that creates revenue. In fact, Google’s AdWords PPC generates $2.33 in revenue for every $1.12 spent by small businesses.

We’ve got a guide for you whether you’re looking to use PPC for the first time or if you just want to brush up on your knowledge.

Take a look at how PPC works to increase traffic and conversions. Read on for more information.

What Is PPC?

Okay, pay-per-click is a pretty self-explanatory name. But it’s important to understand how PPC works.

The pay-per-click model is a way for you to buy traffic to your website.

Instead of competing with other businesses, you can buy ad placement on search engines for exposure.

You can invest in highly targeted ads through Google, Facebook, Twitter and other platforms. The goal is to generate leads so that people become familiar with your brand.

For instance, let’s say you have a small auto repair shop in Phoenix. People looking for your services might turn to Google to find a local auto shop.

But when the potential customer does a search, you’re nowhere to be found. That’s because there are countless results for auto repair shops in the area.

You’re missing out on huge amounts of potential revenue by not being atop the results. In fact, over 58 percent of all user clicks come from the top three positions in Google search results.

To resolve this, you can purchase certain keywords so that your ad pops up atop the organic results. The only time you are charged for the ad is when a user clicks through to your website from the ad.

During a successful campaign, your fees will increase because you’re getting more people to your website. These users can be directed to a page with a call-to-action that encourages them to do business with you.

The Cost

What’s the bottom line? Fortunately, the price is up to you.

You set up your own budget in a PPC campaign. Your ads will run until you’ve received enough clicks that your budget runs out.

The amount you pay for each click is usually agreed upon in advance. Some campaigns follow a bid-based system for advertisers. This puts advertisers against each other to determine who will pay the most for individual clicks.

Bidders select the maximum amount they are willing to pay per click. You can then monitor your campaign’s success and spend online.

Return on investment is the most important metric to pay attention to in digital marketing. Consider what budget and click bid gives you the best chance to maximize your ROI.

Google AdWords

No article on how PPC works is complete without mentioning Google AdWords.

AdWords is the most popular form of PPC advertising not only in the country but in the world. That’s because it lets businesses advertise on the holy grail of websites – Google.

AdWords allows its users to bid on selected keywords that are relevant to their business. Google then pulls from their advertiser pool to determine who gets top billing in the results.

This is determined by the advertiser’s Ad Rank. Ad Rank is a metric that takes into account CPC Bid and Quality Score.

CPC bid refers to the maximum amount an advertiser is willing to bid for a click. Quality Score, however, is a number that reflects the quality of your page. Factors considered include relevance, page quality, and click-through-rate.

This auction based system opens up businesses to huge amounts of inbound searches.

Keywords

PPC campaigns can be incredibly effective…if they’re done correctly.

One of the biggest questions about how PPC works is how to choose the right keywords.

Each PPC campaign is built around a set of keywords. Keywords should be both relevant to your business and to your area.

Let’s use the auto repair shop in Phoenix as an example again. For their campaign to be effective, they need to find keywords that deliver a high amount of impressions.

It wouldn’t work for them to just use the keyword “auto repair” because they’d be competing with an endless amount of businesses. They could improve their keyword by selecting something like “auto repair Phoenix.”

This would narrow down the search results while also providing hyperlocal leads. Using your city or neighborhood can make all the difference in an effective PPC campaign.

The best PPC advertisers constantly update their keyword list. Finding the top keywords can be a long process. But it’s also an important step in any PPC campaign.

How PPC Works Long-term

Nothing comes easy in business.

PPC campaigns need to be monitored, analyzed, and updated in order to be effective. The work doesn’t stop once the campaign is up and running.

How PPC works effectively is with good management. You need to stay up to date on your account trends to be successful.

Remove and replace negative keywords to decrease wasteful spending. You should also research and add successful keywords regularly.

Successful PPC starts with you. You need to make sure your website and landing pages are optimized for success.

The whole goal is to get traffic to your site. If your website is subpar then you can kiss your new leads goodbye.

Refine your landing pages and make sure they have definitive call-to-actions. CTAs can be anything from a “contact us” button to an offering like a free consultation or discount. The goal is to turn leads into paying customers when they visit your site.

Next Steps

PPC is an effective tool for small businesses looking to attract new business.

Remember to set a budget, find relevant keywords, and monitor your activity to maximize your ROI. Your next customer might be only a click away.

Are you ready to start a PPC campaign? We can help. Contact us for a free consultation today.

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