Getting the most out of any marketing initiative starts with knowing the fundamentals. So lets delve into the fundamentals of Pay-per-click (PPC), particularly, how an ad gets shown and the mechanics PPC platform use to pick where our ad appears.

Google AdWords (Googles PPC advertising platform) runs ads above and to the right of the natural search results. Google differentiates them by putting Ad beside them or by applying a slightly shaded background. Since people start scanning pages from the top, the 3 ads that sit atop the first 10 search results have the most desirable ad location; the first position being the most desirable. Ads that end up in fourth, fifth, sixth or later position are relegated to the right-hand side.

GoogleNatural search results are ranked solely by Google, but the paid search space on the results page is auctioned off to advertisers, who compete with all the other listings on the page for attention.

Every time a person searches on Google, an auction happens for the words they searched on. Using the AdWords tool, advertisers state how much they intend to bid in that auction. Bids largely set which position their ad appears in.

The system builds the list of ads it will show, going from the last position up to the first position. Lets take the word software, which has six PPC bids on it by various companies. The lowest bidder set AdWords to spend a maximum of $1.00 for software, so they pay exactly what they bid and their ad gets sixth position. Turning to fifth position, the system takes the next-lowest-bidder and enters a programmed bid of $1.01, which may not be their maximum bid, but is just enough to outbid the sixth spot. The same process goes for fourth, third, second and first position; the winning bid being a calculated amount that’s more than the bid for the spot below it. When the searcher sees the paid ads and chooses one of them, their click triggers the advertiser to be charged. The next time software is searched, a new auction will happen and this entire bid ranking system will run again, all in a few nanoseconds.

The Real Focus of Pay-per-click Programs

When I talk with B2B companies about Pay-per-click (PPC) campaigns, I often hear comments like what if only a few people search for my type of business? or will anyone see my ad? Experience has taught me that this is a backwards way of thinking. If you think of how many searches are done everyday on search engines, you know that running PPC ads can bring many visitors to your site its like opening the valve on a high-pressure fire hydrant. Suddenly, you could be in front of everyone who is Googling about a given topic. PPC traffic is highly relevant while also being high-volume even the most obscure products & services are searched on sufficiently that a decent number of people would see a PPC ad.

The area we ought to focus on is where PPC ads take the visitors who’ve clicked on the ad. This is because PPC visitors, who are siphoned from the same pool that search traffic visitors come from, will likely be a lot like existing visitors.

PPC is like a fire hydrantTo help illustrate this, identify one of your sites pages and look at the behaviour of those sent to the page by Google (organic search traffic). How do they behave on that page? Do they complete an action we want, such as leaving their contact information? If most of them leave right away, we have work to do on that page before we use it for PPC. If we want good things to happen when ANY visitor reaches our site, we must have web content ready to greet them, motivate them and give them a way to keep interacting with us.

So will PPC deliver visitors? Yes. Its a fire hydrant that will unleash a torrent of visitors. We should have the same focus that firefighters do. Firefighters don’t hook a hose up to a hydrant and obsess about how the water reached the hydrant. They focus on ensuring the water reaches the fire. Instead of worrying whether a PPC campaign will reach a huge audience, our real focus should be is getting our site ready for the visitors we get from PPC.