Although PPC has been a very successful and profitable means of online marketing for a wide range of industries and business sizes, it can also be very costly and have zero results. Prior to beginning your first PPC campaign, here are a few things to help with your preparation:

PPC Campaign Goals

All marketing efforts begin with some type of goal in mind and PPC is no different. Actually, goals are directly related to the structure of your PPC campaigns, making them especially important. For example, you can structure your campaigns to target your ideal audience based on where they are in the buying cycle. What is it you want to achieve? Are you a new business wanting to build awareness or drive traffic to your website? Are you trying to generate leads or increase revenue? Perhaps you want to increase in-store visits or get the phone ringing. Whatever your goals are, be sure to define them first before beginning your PPC Campaign.

Sufficient PPC Budget

Without a sufficient budget, your ads won’t show often. There are many ways to control spend in AdWords, but doing it by limiting budget is just about the worst way to do so. It also means you won’t get enough clicks or conversion data to learn from and to optimize your campaigns, let alone meet your business goals.

Landing Pages

No matter how good your ads are, how you structure your Adwords campaigns or how many optimization tools you utilize through the Adwords platform, if your landing page isn’t great, your campaign can’t be. With mobile devices accounting for the majority of searches and clicks, the mobile version of your landing page has to load fast, provide the user with results relevant to their query and give a clear call to action.

In the new Google Adwords interface, there is now a Landing Pages report providing a “mobile-friendly click rate” and “valid AMP (Accelerated Mobile Pages) click rate” to give advertisers more insight on how their landing pages perform on mobile devices. Google’s test tool also lets you check how mobile-friendly your landing pages are.

If your advertising goal is to generate leads, but your landing page doesn’t have a clear call to action or even a lead form, you’re probably not going to achieve good campaign results, not to mention, you’ll be sending unfavorable signals to the search engines based on user behavior and experience.

Let’s say you sell shoes and your ad for a search query “men’s shoes” directs that user to your home page versus the men’s shoes page. Most people aren’t going to navigate around your site to find what they wanted in the first place, but instead, hit the back button and click elsewhere. This is one of those factors from the first part of this series about Ad Quality Score, which will certainly suffer if your landing page doesn’t provide a good user experience.

An Experimental Mentality

Your AdWords campaigns may not immediately deliver optimal results. The most successful search campaigns require constant testing, analyzing and optimizing. Performance relies on many strategic factors from bidding to targeting to ad copies to landing pages. Additionally, search engines are always testing and making changes so the learning curve is constant and there will always be an opportunity to try something new.

Resources

Since it’s easy to waste money on an Adwords campaign, making sure you have dedicated people and resources in place is essential. Your budget size and how complex your campaigns are will help determine how much time and talent you should expect to devote to managing, testing, analyzing and optimizing your paid search efforts.

Measuring and Tracking

All you need is a primary contact and a credit card to create a new AdWords account, but prior to starting a campaign, it’s imperative you take some essential steps first, making sure you get all the reporting and tracking needed in order to measure and optimize your campaigns.

There are several metrics you’ll need to understand when running and analyzing PPC campaigns.

Impressions: The number of times your ads were served in the search results.

Clicks: The number of times users clicked on or engaged with your ads.

Click-through rate (CTR): The percentage of people who clicked on your ad. It is calculated by dividing clicks by impressions. CTR is a very important indicator of how well your ads are performing.

Average CPC: The average cost per click paid for the clicks received.

Average position: Where your ads appeared on the search engine results page (SERP.) The higher the position, the greater the visibility you’ll have. Average position also indicates how your Ad Rank compares with other ads.

Conversions: The number of conversion actions your ads have generated. The actions to be tracked are set up at the account level.

Conversion rate: The percentage of people who clicked on your ads and ended up converting.

Quality Score: Reported at the keyword level on a scale of 1 to 10, Quality Score is an indicator of how relevant your ads, keywords and landing pages are to the user. A higher Quality Score can mean lower CPCs and better ad positions.

There are literally dozens of additional reporting metrics available in AdWords and you can even create your reports with custom columns.

Conversion tracking: What can you measure?

Conversion tracking allows you to understand how effective your ads are in resulting in valuable customer activity. The setup process is different, depending on what type of conversion you want to track, so first, you must choose a conversion source. A conversion source is where your conversions come from like phone calls, app downloads, newsletter sign-ups, website purchases, etc. There are four main types of conversions you can track in AdWords:

Website Actions: This is the most common type of conversion tracking, so it will be covered in more detail below. Google provides these five categories for types of website actions you can track: Purchase/Sale, Sign-up, Lead, View of a key page, and Other.
App installs and in-app actions: If you are promoting an app, you can track app conversions through your app analytics platform. Additionally, AdWords integrates intrinsically with its own Firebase app analytics platform, the Google Play app store or from third-party analytics platform.
Phone calls: If you’re a business whose goal is to generate phone calls, there are multiple ways search engines have developed to drive phone calls from search ads. On mobile devices, there is even an option to create a “Call-only” ad where the number pops up when the ad is clicked, versus redirecting the user to a website or landing page. AdWords gives three options for setting up phone call conversion tracking:a) Calls from ads using call extensions or call-only ads. This tracks when someone calls you directly from an ad. This option requires you to use Google forwarding numbers.b) Calls to a phone number on your website. This tracks when someone clicks on one of your ads, then calls your business from a phone number on your landing page or website. This option also requires you to use Google forwarding numbers as well as adding a tag to your landing page or website.c) Clicks on your phone number on your mobile website. This tracks when someone clicks a phone number link on your mobile website. This option does not require the use of a Google forwarding number, but does require you to add a tag to your mobile website.

What’s a Google forwarding number? A unique phone number provided by Google displayed in your ads. If a potential customer calls or messages this phone number, AdWords will route the call or message to your business phone number. With this information, you’ll have detailed reports about calls or messages generated from your ads.

Import: This option allows you import conversion data from another source. AdWords integrations options are Google Analytics, Firebase, Third-party app analytics and Salesforce. Aside from these four options you can also upload conversions in a file or with the API by choosing the fifth option: Other data sources or CRMs. Under this option you choose whether to track conversions from clicks or calls.

Step-by-step: Setting up website conversion action tracking:

Here is what the setup screen looks like for tracking website conversion actions. To access within the AdWords platform, click on ‘Tools’, indicated by a wrench in the upper right hand corner. Under ‘Measurement’, click ‘Conversions’ and choose ‘Website’.

Follow these steps:

Name the action. Choose something as relevant as possible so anyone using reporting will easily be able to recognize it. For example, website clicks lead forms.
Choose a category. As mentioned above, your choices are Purchase/Sale, Sign-up, Lead, View of a key page, and Other.
Choose a value. The value depends on the kind of conversion you’re tracking. If your business or client has designated a specific value for an ebook download, for example, you can choose “Use the same value for each conversion” and enter that value. An e-commerce site, however, will usually want to use the value of the total sale value, which typically will vary by customer. In this situation, choose “Use different values for each conversion.” Keep in mind you’ll need to edit the conversion tag to track transaction-specific values. Third, you can choose not to assign a monetary value to a conversion at all, in which case you would choose “Don’t use a value”.
Choose a count. “Every” is recommended for purchases, where every conversion adds value. If your business wants to count three ebook downloads by the same user only once, choose “One”.
Choose a conversion window. This is how long you want to track the conversion after your ad receives a click. For example, an insurance salesman may want to track a conversion for 5 days for a quote request, but 60 days for a policy sale. If you’re not sure how long it takes for your customers to convert, you can segment your reports by “Days to conversion” to find out.
View-through conversion window. This is only for video and display ads, not search. It counts a conversion when it occurs after a video or display ad impression, but is clicked on later. The default is one day for this and in search you won’t need to change it.
Include in “Conversions”. This lets you decide if these conversions should be included in your “Conversions” and “Conversion value” columns. If you uncheck it, data will still appear in the “All conv.” column. AdWords uses the Conversions column for its Smart Bidding or automated bidding (which will be covered in part 3). If you want to measure an action, but not have your bids optimized against that action you can uncheck this box. For example, visits to a specific page on your website.
Attribution model. This setting determines how much credit each click receives for your conversions. In the Adwords platform, you can set an attribution model for each conversion event you create. Currently the default is set to “Last Click”. There is an attribution modeling report you can use to compare the different models to one another. Attribution models are covered in more detail next.

AdWords Attribution Models

Attribution models were created to help advertisers understand how their search marketing efforts directly relate to a user converting. How do you know exactly what keywords and ads contributed to a conversion? Knowing this data is especially important as users perform research and make purchases across multiple devices and channels.

AdWords Attribution models only reference ad clicks and engagements for Search and Shopping Ads on google.com and are not available for app and in-store conversions.

Attribution models provide you with more control over how much credit each ad and keyword receives for your conversions, providing these benefits:

a) Reach potential customers earlier in the buying cycle by discovering opportunities to influence them earlier on the path to converting.
b) Match to your business by using a model that is best suited for how your target audience searches for your product or service.
c) Improve your bidding by optimizing bids according to a better understanding of ad performance.

Example:

You own Simply Elegant Restaurant in Scottsdale, AZ. A customer is directed to your website after clicking on your AdWords ads after the search queries “restaurant phoenix”, “restaurant scottsdale”, “5 star restaurant scottsdale” and lastly, “5 star simply elegant restaurant scottsdale”.

In the “Last click” attribution model, the last keyword, “5 star simply elegant restaurant scottsdale” would receive 100% of the credit for the conversion.
In the “First click” attribution model, the first keyword, “restaurant phoenix”, would receive 100% of the credit for the conversion.
In the “Linear” attribution model, each keyword would share equal credit of 25% each for the conversion.
In the “Time decay” attribution model, the keyword “5 star simply elegant restaurant scottsdale” would receive the most credit since it was searched closest to the conversion. The “restaurant phoenix” keyword would receive the least amount of credit because it was the earliest search.
In the “Position-based” attribution model, “restaurant phoenix” and “5 star simply elegant restaurant scottsdale” would each receive 40% credit and “restaurant scottsdale” and “5 star restaurant scottsdale” would each receive 10%.
In the “Data-driven” attribution model, each keyword would receive partial credit, depending on how much it contributed to driving the conversion. You would only see this option if you had sufficient data in your account. Find out more about data-driven attribution here.

Setting Up Your Adwords Account

Each individual business or client will need to have its own account when you’re setting up AdWords. Within each is where important contact details, payment information and account access permissions are kept.

Google only allows one ad per website to appear in search results for text ads; this is to provide a better user experience. Shopping ads are the exception because several related products from the same seller may appear in the results.

To set up your account, click on the “Tools”/wrench icon in the upper right-hand corner:

In Billing and payments, you’ll set up your contact and payment information. Invoicing is available, but you have to contact Google directly to initiate this.

Under Business data is ad customizer data, ad extension, dynamic ad and page feeds. Don’t worry about this in the beginning; you’ll return here after your setup is complete.

Account access is simply that; add users to your account and choose their levels of access.

Linked Accounts

Before you launch your first campaigns, you’ll want to link your accounts from other Google services in order to transfer data back and forth between them.

Currently, you can link to these Google services:

Google Analytics
Google Firebase
Google Play
Salesforce
Third-party app analytics
Google Hotel Ads Center
Google Merchant Center
YouTube
Search Console
Ads Data Hub

Utilizing Google Analytics is extremely valuable as it allows for importing conversion goals and audiences from Analytics into AdWords. Through Google Analytics, you can analyze your AdWords campaign performance, compare it to other channels and most importantly, understand how users behave on your website after clicking your ads.

Google Firebase is great if you have Android and iOS apps. Firebase shows you how your campaigns relate to app installs and in-app actions. You can create mobile app remarketing lists with Firebase audiences and view AdWords cost data in Firebase.

Also app related, with Google Play, you can learn what ads are driving action by tracking in-app purchases and can also create remarketing lists based on current users.

If you use Salesforce, link so you can import sales leads and funnel that data into AdWords. After a lead comes from a click on your ad, you can use this data to optimize your campaigns.

Google shares signed-in user data across its services. Linking your YouTube channel to AdWords will not only allow you to run video campaigns on YouTube, but you’ll also be able to build retargeting lists of people who’ve watched your videos and measure engagement on your video ads.

Linking Google Search Console will enable you to import organic search results, compare your organic and paid coverage and see how your ads and organic listings perform together and alone.

Ads Data Hub is not available to all advertisers. Linking to this makes campaign data available in a secure, cloud-based environment, to third party vendors and agencies for verification and/or analysis

Account Settings

After the account setup process is completed, it’s important you navigate to another Account settings tab. Click “Settings” on the bottom left hand side and then click “Account Settings.”

Tracking: If you’re using a third-party platform for analytics, this is where you can add tracking parameters that will apply to the account level, campaign level, ad group level, ad level or the most specific, the keyword level. You can also add Parallel Tracking which helps in loading your landing page quicker. It sends users directly from your ad to the final URL while the click measurement occurs in the background. This can help improve ad performance and increase conversions.

Auto-tagging: Enabling this feature is necessary to import conversion data into Analytics or a third-party analytics platform, for example, your CRM.

Message Reporting: This must be on if you are using a messaging extension or the data collected from it cannot be captured in the reporting insights. Extensions will be covered in more detail in the third and final part of this series.

Inventory Type: For video campaigns only.

Content Exclusions: This allows you to opt out of showing your ads on content that is not suited for your brand. Digital content labels pertain to audience maturity; Sensitive content lets you choose specific websites, videos or apps, for example, that may not fit your brand; and Content type refers to excluding your ads from certain categories of content.

Ad Suggestions: New as of March 2018, Google automatically creates and applies ad suggestions in your ad groups, especially in ad groups that may only have one ad. This setting is on by default and Google will automatically apply the changes after 14 days if you don’t dismiss them or apply them yourself sooner from the Recommendations page.

Conclusion

Hopefully at this point you’re more than convinced of the value of PPC as a means of online marketing. It truly is transparent as you can see with all of the measuring and tracking options available through the AdWords platform. Remember the importance of the steps before getting started as they are vital to a successful start of your campaigns. Next, in part 3, we’ll wrap up this series by covering campaign structure, ad groups, ad extensions, setting up your search campaign, ads automation and additional targeting capabilities.

Part 1 – What is pay-per-click advertising?

Fundamentally speaking, pay-per-click advertising is a form of online advertising where an advertiser is charged when their ad receives a click after appearing in search engine results pages, rather than paying for an ad impression, or when the ad is shown or seen.

Digital marketing and advertising is notorious for having its own language and agencies tend to try and create their own terms in an attempt to stand out from the competition; for example the terms “retargeting” and “remarketing” essentially mean the same thing. Cost per click (CPC) refers to the amount, or cost, an advertiser pays each time their ad is clicked on. The advertiser sets a bid price called the Max CPC and the price the advertiser pays is the Avg CPC. CPM, on the other hand, or cost-per-thousand, is the marketing term for buying per 1,000 impressions, wherein ads are purchased on a cost-per-thousand basis and advertisers pay when their ads are shown in search engine results pages.

To a certain degree, search advertising has been coined as PPC since it was introduced by search engines and has since been adopted by a variety of different sites, such as Amazon, Facebook, LinkedIn, and others. These sites offer advertisers the option to purchase social, video and display ads, to name a few.

In this three-part series, the focus is specifically on the paid search area of PPC where text ads appear in search engine results. While the three major search engines, whether it be Google, Yahoo or Bing, each has its own, individual options for advertising, this series will specifically target Google. Google is the goliath of the search industry, constantly updating and innovating to remain the top contender in the world of search.

Why PPC advertising?

While PPC has developed immensely over time, there are still many reasons companies, large and small, spend billions of dollars a year on this keystone of search advertising.

Pay-Per-Click Advertising Provides Immediate Results

PPC advertising delivers instantly. As soon as your campaign is approved, your ads can be seen by millions of searchers. The ability to create and implement a campaign and reach a target audience so quickly makes PPC an optimal choice for contributing to business goals. Examples could be brand exposure and recognition, product launches, event marketing, seasonal promotions and more.

PPC Is Measurable & Trackable

Everything about PPC is measurable and trackable. Google Adwords reporting features include high-level details about impressions, clicks, and conversions. When it comes to the performance of your PPC campaigns, Google Adwords provides real-time statistics, including the type of traffic and how those results are influencing your budget. PPC’s measuring and tracking capabilities make it a valuable tool for experimenting with different variables, such as campaigns, landing pages and strategies. Pay-per-click advertising allows you to better understand specifically what your target audience is searching for as well as what you spent and what drove that spend in terms of your end goals.

PPC Targeting Options

The beauty of targeting options through pay-per-click advertising is reaching an audience you may not have known you had as well as those who may already be exposed to your brand. Google Adwords targeting options include, but are not limited to:

Audience Targeting

Demographics:

Target based on age, gender, location and even device types. Let’s say you are a small yoga studio promoting a new class best suited for women between the ages of 25 and 45 and you know your current client base doesn’t travel more than 20 miles to your studio: your ads will be delivered to users matching these demographics.

Similar:

Target based on similar interests to your existing audience. These targets may not be precisely searching for your company’s product or service, but by targeting based on similar interests, their searches may place them in front of your ads. Using the same yoga studio as an example, you may include pilates, zumba, physical fitness, etc. as similar interests.

Remarketing:

Target based on visitors who have already been engaged with your website, app or ads so your ads will be placed more frequently in front of these individuals. They may be in any stage of the buying process, but if they have visited your website, landing page or clicked on your ad before, it’s likely they will return and perhaps to complete a purchase.

Content Targeting

Placement:

PPC placement targeting is essentially an online auction. Advertisers can choose managed placement, or choosing only specific sites they wish their display ads to be shown; or automatic placement, when sites are chosen for you based on the targeting you have set. The biggest difference with placement targeting is it is not reliant on keyword selection like contextual targeting.

Display Expansion for Search:

Display Expansion can be used in search or display ads. Adwords will find your ideal target on your behalf, combining automatic bidding and smart targeting, while targeting high-traffic occasions to deliver you the most optimal results.

Content Keywords:

By choosing content keywords relevant to your business’ products and services, you target individuals performing searches using that same search criteria. You can also modify a group of keywords in order to manually target specific demographics or reach certain business goals. For example, you can tailor your keywords to market a new product or service or to promote an upcoming event.

Where do PPC ads appear?

While in this series the focus is on traditional text ads, it’s worth sharing the other ad formats you may see in search engine results pages. The following illustrate how and where the different ad types would appear on Google:

PPC Text Ads:

These can appear at the top or the bottom of the organic search results on desktop or mobile devices. Note there are only four spots for ads to potentially appear above the search results. Ads can also appear in the local pack of listings with a map; this data is pulled from Google My Business.

Source: Google Ads

Local Ads:

Local Ads appear in the local pack of listings and Google Maps for businesses with physical locations. The green pins indicate a business with an ad and when a user hovers over it, an Ad label appears.

Source: Google Ads

Shopping Ads:

Shopping Ads, or as Google calls them, Product Listing Ads (PLA) are delivered differently than text ads. They are image-based ads and include the company name, price, any current offers, and more. Shopping ads are not based on keywords, but rather on data Google collects from the Merchant Center, set up by the merchant, enabling Google to deliver higher quality leads. For instance, if someone were to search for “mouse pad”, they would know what they look like right away because of the pictures shown and what the cost of each is before even clicking on the ad. After clicking the ad and being directed to the website, this prospect is already further along the purchasing path. The ads are shown at the top of the search results page in a carousel on desktop and mobile devices; they are shown on the right side in what Google calls a knowledge card or graph. Here is an example of the previous search for “mouse pad” showing both appearances:

How does PPC work?

Search engine results don’t necessarily display ads for every search query, but if that query results in a potential profit, an “auction” begins at the onset of the search. A couple of different considerations go into determining whether or not an ad is qualified to appear in the auction, what order the qualified ads will show and the amount each ad will be charged should a user click on it.

First, advertisers set the maximum bid (Max CPC) or the most they want to pay for a click. These bids can be on an individual keyword basis or applied to an entire Ad Group. Next, an ad is assigned a Quality Score (explained in further detail below). Once an ad is qualified to enter the auction, an Ad Rank (also explained in further detail below) is calculated by multiplying different variables of the Max CPC by the Quality Score, which is then the ultimate decider what position the ad falls in.

Quality Score:

The Quality Score refers to Google’s rating of the quality and relevance of your ad copy and keywords. Although advertisers don’t see what their Quality Score is, they can see a ranking between 1 (bad) and 10 (excellent) within the Adwords platform. With a higher quality score, your ads may get a lower cost-per-click (CPC) or appear higher in an auction. When calculating your Quality Score, Google looks at the odds of your ad being clicked on, the correlation between the search query related to your ad copy and the landing page to which the user is directed; does that landing page provide the user with what they searched for in the first place?

Ad Rank:

Ad Rank refers to the positioning of an ad relative to other ads shown in the same auction. As mentioned above, it is calculated based on the Max CPC and Quality Score. Essentially, the formula would look like this:

Max CPC x Quality Score + other details, such as the terms used in the search query, what device the search is made on, the influence ad extensions may possibly have, and more.

CPC:

Cost-per-click (CPC) is affected largely by Ad Rank with its formula looking like this:

CPC = The Ad Rank of the Advertiser Below/Quality Score + $0.01

This isn’t to say the advertiser below should bid $0.01 more; this is just part of Google’s secret sauce, to say. CPC’s will fluctuate a great deal since Adwords pricing structure is partly due to the Ad Rank of the next competitor.

Conclusion

While the Why, Where and How of PPC may seem a bit daunting, it goes without saying pay-per-click advertising can be a very beneficial and cost-effective method of advertising for businesses, large and small. Join in on Part 2 of this series to read about what you need to get started, more grueling details on measurement and tracking and guidance on setting up an account.

Part 2: Pay-Per-Click Advertising Setup

Part 3: Tips & Everything Else You Need to Know

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