Pay-Per-Click advertising is when a company pays to display ads to the consumer through Google and/or Bing. When you search for something on these search engines, you’ll see a few ads at the top of the page in the results. These are results that the company has paid for to display to you, because it increases the chances of you clicking on them.

It’s called pay-per-click because the company only pays Google or Bing if you click on the ad.

These search engines won’t just display any ad – it’s their job to deliver the best results possible to the consumer and so the search engines match your key words you typed, with the pages and ads that have those key words in them. We’ve talked before about SEO basics and building an online presence. Some of the takeaways from using key words on your website, Facebook page, Google+ page are also going to apply when it comes to creating ads.

First, we want to talk about the cost of pay-per-click advertising because many people don’t understand it fully and therefore think it costs a lot. The reality is that it doesn’t have to. Creating your ad is free – you only pay if the ad is clicked. You are in complete control of how much you spend.

When creating your ad you set parameters, based on your marketing budget. Perhaps you only want to pay up to 10 cents per click, to a maximum $10/day. Or perhaps you’re willing to pay up to $1 per click, to $10/day. In this last example if you get 10 ad clicks, that each cost $1, Google will no longer display your ad in the search results. But what you want to understand is that not all clicks are going to cost $1, some may only cost 10 cents, and so you have the potential to get 100 clicks that day.

The second thing you can do to control costs, is set an end date. You may only want to run your ad for 1 week. Giving you the opportunity to evaluate the success of the add and make adjustments. You may find that out of your 7 day, $10/day budget you only spent $25. This means that people may not have been looking for your product, or that they weren’t clicking on your ad. And Google will help you with your evaluation. Google wants your ad to be successful – the more successful your ad is the more of your budget they get. So Google will help you with your evaluation, so that you can adjust the wording of your ad, perhaps the timing, or even the cost-per-click cap.

Don’t be put off after your run your first ad and you find it wasn’t as successful as you hoped. It will take time to get the hang of all the nuances and understand what works for your business.

What is being measured?

There are 4 pieces that are being measured that you want to pay attention to:

  1. Impressions. This measures how many times your ad was shown. It can help you determine whether your keywords are targeting correctly. Fewer impressions might mean you need to adjust your keywords. While higher impressions with a low click through rate might mean you need to adjust your ad copy.
  2. Average cost per click. Clicks have different costs. The less relevant your ad is to what the consumer is looking for, the higher the cost of the click. We’ll go deeper into this just below.
  3. Average position. Where did your ad show up in the search results. Some ads will display higher than others, based on your key words, and the key words the user is looking for. The higher the position, the more likely people are going to see your ad.
  4. Click through rate. This measures the percentage of clicks based on the number of impressions. If Google showed your ad 100 times and 5 people clicked on it, you have a 5% click through rate.

Click bidding

As we mentioned, the more relevant your ad is to what the consumer is looking for, the more comfortable Google is in showing your ad, and and so the cost-per-click will also be lower.

How do you work with Google to get a low cost-per-click?

Let’s say you’re in a niche market, and you do custom embroidery for dogs. When you create your ad, you’re going to pick key works about what you do. Let’s say you do embroidered dog collars, embroidered dog sweaters, but you don’t do embroidered dog blankets. You can tell Google what key words you don’t want to display your ad with – in this example if someone searches for embroidered dog blankets, your ad won’t show up, because it’s not relevant.

Over time – especially if you run a longer term ad – the more people who click on your ad helps Google know that the ad is relevant to their search, and so Google rewards you with a lower cost-per-click.

Bounce Rate

Bounce rate happens when someone clicks on your ad, but then they go right back to the search page. It means they didn’t find what they were looking for on your page and has a negative effect on your ad. That cost-per-click we were just talking about can increase if you have a high bounce.

What can cause a high bounce rate?

If you input in your key words for the ad “embroidered dog blankets”, but you either don’t have any on your site or perhaps only one, the customer didn’t find what they were looking for. Google’s suggestion wasn’t good and Google wants to provide the results the consumer is looking for.

When your bounce rate is low and consumers are spending longer amounts of time on your page, Google knows that the consumer was potentially able to find the product they were looking for.

To help prevent a high bounce rate one of the things you can do is provide the direct link in the ad to the product the consumer is looking for. As an example, perhaps your ad is specifically targeting embroidered dog sweaters. Instead of pointing them to your website’s home page, point them directly to the page with embroidered dog sweaters.

How to write an ad

Your ad should reflect the key words you use and the products you want to sell. If one of your key words is “dog collars”, you’ll want to include that in the ad copy because is lets the customer know that they’re going to the right place, that if they click on your ad, they’ll find dog collars.

You also want to think about what makes your business stand out, what’s one of your unique selling points? Perhaps you have free shipping or over 100 styles to choose from. Include bonuses like that in your ad copy.

Exact, phrase, and broad matching

When you’re creating your ad Google will let you set additional parameters, such as to only show your ad if the user types in an exact phrase. For example: embroidered dog collars. You could also set it to phrase match, which means that as long as those three words are in the search phrase, in any order, the user will see your ad. Example: custom embroidered collars for dog. The third option is broad matching, which isn’t always a great option because the thing the user is searching for may be “shirts with dogs on the collars” and your ad would appear and wouldn’t be relevant to them. But perhaps they’re a dog lover and your ad gets them thinking about getting their dog an embroidered collar.

Matching allows you to be creative with how and when you want your ad to be shown to the user.

Testing success rates

Especially if this is your first time running an ad for your business you’re going to want to do some testing. This means running 4 variations of the same ad. Each with slightly different copy, but all pointing to the same product page or URL. Here’s a few examples:

  1. Embroidered Dog Jackets. Winter is coming! Keep your fur baby warm and dry.
  2. Every dog deserves a Christmas present too! Order your pet a custom embroidered jacket.

This allows you to evaluate after a few days to see which ad is preforming better. Once you know which ad, or two is providing the best results, you can deactivate the other two, and have Google focus on the high preforming ones.

One other thing Google will do to help with the test, is to rotate through each of the ads. So using the same keywords Google will cycle through your ads each time someone uses your keywords.

If none of your ads are preforming well, change them up. Your copy and your ads aren’t permanent.

Ad Budget

When you’re first starting out, you’ll likely want to start with a reasonably modest budget. This is because you’re still in the testing phase and you’re not sure which ads are going to have the highest return. But you should be prepared to spend about $100/week to start.

As you get more comfortable with pay-per-click ads, you can start to spend more, if your marketing budget allows because you’ll find the type of key words, copy, etc. that your customers are looking for and entice them to spend.

More tips

  • If you’re focused on local business, you can restrict your ad to only display to people in a certain area. Your exact city for example.
  • Control the time of day your ad displays. This one is most effective if your call to action is to get people to call you up on the phone. Restrict the ad to display only during the hours you’re in your shop.
  • Get specific. The more specific you can be with your ad, the more likely you’ll show up in the search results, and this is because there are potentially high ranking sites that already have an ad targeted to your customers. So instead of just “dog jackets” you could advertise “embroidered dog jackets for large breed dogs”.
  • Go broad. As your ads get more clicks, Google will rank you higher, because you’ve had a good click through rate. This now allows you to get a little more broad with your ad keywords because you have established a good reputation with Google.
  • Make sure you know how much a customer is worth. This is important to set out because you don’t want to be losing money on each customer in relation to how much you spend on marketing.

The only way yo get good at pay-per-click advertising is to do those test, consistently be evaluating the results, and refining.  Overtime you’ll feel more comfortable creating ads, get better results, and attract more customers.