What is PPC? Guide to Pay Per Click

If you’ve ever searched something on Google and seen the first few results tagged with “Sponsored,” you’ve already seen PPC in action. PPC, or Pay-Per-Click advertising, is one of the most powerful tools in digital marketing — and if you’re a business owner, marketer, or just curious about how online ads work, it’s something you’ll want to get familiar with.

But don’t worry — this isn’t going to be a jargon-heavy, intimidating read. We’re going to break it down in simple, human terms. You’ll walk away understanding exactly what PPC is, how it works, and whether it’s right for your business.

What is PPC?

At its core, Pay-Per-Click advertising is exactly what it sounds like: advertisers pay a fee every time someone clicks on their ad. It’s not about impressions (how many people see the ad), but action — specifically, the action of clicking.

The most popular form of PPC is search engine advertising, where businesses bid for ad placement in a search engine’s sponsored links. For example, if you search for “best running shoes,” you might see an ad from Nike or Adidas at the top of the page. Those brands are paying for every click that ad receives.

So… where do PPC ads appear?

PPC ads can pop up in a few places:

Google Search and Bing Search (also known as search ads)
Websites through the Google Display Network
YouTube video ads
Social media platforms like Facebook, Instagram, LinkedIn, and Twitter

Each platform has its own strengths and pricing models, but the key principle remains: you only pay when someone clicks

Why is PPC Important?

Let’s say you run a small business. You’ve got a great product, a sleek website, and solid branding — but you’re just not getting traffic. Organic SEO can take time to build. Social media might be hit-or-miss. That’s where PPC steps in.

Here’s why PPC is such a game-changer:

Instant visibility – Your ad can appear at the top of Google in minutes.
Highly targeted – You can zero in on your ideal audience based on location, age, interests, even device.
Budget control – You decide how much you want to spend per day or per campaign.
Data-driven – Everything is measurable. You can track conversions, ROI, cost-per-click (CPC), and more.

And perhaps most importantly — you’re paying for results, not just exposure.

PPC vs. SEO: What’s the Difference?

People often compare PPC to SEO (Search Engine Optimisation) — and while they both aim to get your website seen on search engines, they work very differently.

Here’s a quick breakdown:

Feature	PPC	SEO
Cost	Pay per click	Free (in theory), but takes time & effort
Speed	Instant visibility	Slow burn (can take months)
Placement	Top of search results (ads)	Below ads in organic results
Long-term results	Stops when you stop paying	Builds up over time
Control	Full control over copy & targeting	Less control over algorithm changes

You can dive deeper into the differences between SEO and PPC with this guide from Moz.

How Does PPC Work?

PPC might sound like a straightforward pay-to-play setup, but it’s actually more like an auction.

Here’s how it works:

To get started with PPC, you first choose the keywords you want to target — these are the search terms you want your ads to show up for. Next, you create the actual ads that will appear when users search those keywords. Then, you set a bid, which is the amount you’re willing to pay for each click. Finally, Google (or another advertising platform) uses an algorithm to determine which ads to display, factoring in your bid, the ad’s relevance, and the quality of the landing page. This process is known as Ad Rank.

Types of PPC Ads

PPC isn’t just text ads on search engines. There are several types of PPC ads, depending on your goal and audience

Search Ads
Search ads are the classic form of PPC that appear on search engines like Google and Bing. These ads are highly effective because they target users with high intent—those actively searching for specific products or services. By bidding on relevant keywords, businesses can capture these potential customers exactly when they need them, offering a more immediate and relevant solution.

Display Ads
Display ads are banner-style advertisements that appear on websites within Google’s Display Network. These visually engaging ads are ideal for building brand awareness, as they allow businesses to reach users even when they aren’t actively searching for something specific. Display ads help establish visibility and familiarity with a brand, making them great for long-term marketing strategies.

Shopping Ads
Shopping ads are designed specifically for eCommerce businesses. They display a product image, its price, and a brief description directly in the search results. This makes it easier for users to compare products, and since they’re shown at the moment of intent, they are highly effective in driving traffic to online stores and increasing conversion rates.

Video Ads
Video ads, often shown on platforms like YouTube, are a powerful way to tell your brand story or showcase a product. These ads are engaging and give businesses the opportunity to visually demonstrate their offerings, making them a great choice for driving brand awareness and consumer engagement. Videos are also highly shareable, which can help extend the reach of your campaign.

Social Media Ads
Social media platforms like Facebook, Instagram, LinkedIn, and TikTok offer highly targeted PPC options. These ads allow businesses to reach very specific audiences based on demographics, interests, and behaviors. With social media ads, companies can engage with niche markets and promote products or services directly to users who are most likely to convert, making them ideal for precise targeting and engagement.

Key Metrics to Track

One of the best things about PPC? You can track everything. Here are a few key terms you’ll want to get familiar with:

CPC (Cost Per Click): How much you’re paying for each click.

CTR (Click-Through Rate): The percentage of people who click after seeing your ad.

Conversion Rate: The percentage of visitors who take the desired action (purchase, sign up, etc.).

Impressions: How many times your ad was shown.

Quality Score: Google’s rating of the quality and relevance of your ads and landing pages.

ROAS (Return on Ad Spend): The revenue earned for every dollar spent.

Understanding these numbers helps you figure out what’s working — and what needs tweaking.

PPC Mistakes to Avoid (Especially as a Beginner)

Not setting a clear goal. One of the biggest mistakes beginners make is launching a campaign without a clearly defined goal. Are you trying to drive traffic, increase sales, or generate leads? Each of these objectives requires a different approach in terms of ad copy, keywords, and landing pages. Without a clear goal, it’s hard to measure success or optimise effectively.

Ignoring negative keywords. Many advertisers forget to add negative keywords, which filter out traffic from irrelevant searches. This can lead to wasted spend and low-quality clicks. For example, if you’re advertising premium products, adding negative keywords like “cheap” or “free” helps keep your audience targeted and your budget intact.

Sending traffic to your homepage. Your homepage is designed to introduce your brand — not to convert ad clicks. Instead, send users to a custom landing page that aligns with the ad’s message and includes a strong call-to-action. This ensures continuity, improves user experience, and boosts conversion rates.

Not testing. PPC success doesn’t come from a “set it and forget it” mindset. You need to test different variations of your ad copy, headlines, and visuals to see what works best. Even small tweaks can lead to better click-through rates and lower costs over time.

Failing to track conversions. Without conversion tracking, you’re flying blind. Whether it’s a purchase, form submission, or phone call, setting up conversion tracking allows you to see which keywords and ads are driving real results. This data is crucial for refining your campaigns and getting the most value from your budget.

For a deeper look, check out Google’s official PPC best practices.

Is PPC Right for You?

If you’re looking for fast, measurable, and highly targeted results — yes, PPC can be a great fit. But it’s not a “set-and-forget” solution. It requires consistent testing, tweaking, and monitoring.

Here are some cases where PPC shines:

You’re launching a new product and want quick exposure.
You’ve got a time-sensitive promotion or sale.
You’re in a competitive niche and want to get ahead of organic search.
You need leads now, not in six months.

But if your budget is tight or you’re looking for long-term growth, consider combining PPC with SEO. That’s often the sweet spot.

Final Thoughts

PPC advertising isn’t just for big corporations with deep pockets. Whether you’re a local plumber in Sydney or running an eCommerce brand from your living room, PPC gives you the power to reach people when they’re ready to take action.

The beauty of PPC is in its flexibility, speed, and precision. It can be as simple or as advanced as you want it to be. But like any good tool, it needs to be handled with care — and a bit of strategy.

So, start small. Test. Learn. Optimise. And before long, you’ll see exactly why PPC continues to be one of the best investments in the digital marketing toolbox.

Sky Night Digital