What is paid search (PPC) and why do you need it?
By Rebecca Sentance | November 22, 2018 | https://econsultancy.com/what-paid-search-ppc/
Paid search marketing is known in the marketing and advertising industry by many different names (and abbreviations).
Search engine marketing (SEM, which can include SEO), pay-per-click (PPC), search engine advertising, sponsored listings… the list goes on. And that’s before you start to involve the names of specific advertising programmes and ad types, such as Google Ads (formerly Google AdWords), Google Product Listing Ads, Google Shopping Ads, and Bing Ads.
But never fear: Econsultancy is here to demystify everything. In this article, we’ll give you a basic overview of what paid search consists of and what it looks like, explain the different abbreviations and ad types you’ll come across, and examine the benefits and drawbacks of investing in paid search.
This guide is aimed pretty squarely at beginners, so if you consider yourself an expert in paid search, it might not be for you – but please leave any tips or advice you have in the comments!
According to Econsultancy’s own Paid Search Best Practice Guide:
Paid search marketing affords businesses the opportunity to advertise within the sponsored listings of a search engine or a partner site by paying either each time their ad is clicked (pay per click) or less commonly, when their ad is displayed (CPM or cost per thousand) or when a phone contact is generated, which is ‘pay per call’.”
The guide author goes on to note that paid search and pay-per-click – PPC – are not directly interchangeable terms, as paid search marketing can also encompass other types of payment model, including CPM (which stands for cost per mille, or cost per thousand impressions) or CPA (cost per action / acquisition).
However, PPC (the cost-per-click model) is still the most widely-used form of paid search, and the two terms are often used interchangeably. For this reason, we’ll be focusing primarily on pay-per-click paid search in this guide, while also noting where other types of paid search ad differ from it.
So, what do paid search results look like when you encounter them in the wild?
If a user searches for “chocolate fountain” on Google, the search engine results page (SERP) returns the following:
As you can see from the screen grab, the paid search results are in the carousel at the top, marked with the term “Sponsored”. These are Product Listing Ads(PLAs), more commonly called Google Shopping ads (though other comparison services do appear in these spots, too) – they are a type of PPC ad that is displayed when a user searches for a product on Google.
Nisbets has the highest Ad Rank in the example shown for the search term ‘chocolate fountain’ and therefore Nisbets appears at the beginning of this results box. It will likely cost Nisbets more than the other listed companies if the user clicks on the first product and heads to their website, but it’s not just bid price that determines Ad Rank. Read more on Google – factors that affect Ad Rank include the quality of your ad, any ad extensions you have used, and the context of the user search.
What do paid search ads look like for a non-product search? Here’s a search for “paid search expert” (which, as you can imagine, is a term in high demand):
Instead of the carousel of product images, we’re presented with a list of regular text ads that resemble search listings – only distinguished by a subtle “Ad” label to the left of the web address.
Moving over to Bing, we’re greeted (see below) with a very similar-looking experience on both counts: a visual carousel for Bing Product Ads (which are part of Bing Shopping), and text-based ads for a non-product search.
As you can see below, Bing also has an additional text ad space below the product carousel, in place of Google’s local map ads.
Interestingly, Bing only has one paid search result for “paid search expert”, compared with Google’s four. Perhaps all the paid search experts are advertising with Google?
A glossary of abbreviations
We’ve already covered a few of the three-letter abbreviations that pop up in relation to paid search, but here is a comprehensive list of what each refers to.
Cost Per Click, or CPC, means that you as an advertiser appearing on a SERP pay the search engine for each user’s individual click on your ad. It’s effectively the same as PPC (pay-per-click), though some use Cost Per Click to refer specifically to the metric that measures cost per click, and PPC to refer to the strategy as a whole.
Cost Per Mille, CPM, means cost per thousand impressions. Unlike CPC, this is an advertising model based on the number of people who see the ad (known as “impressions”) regardless of how many actually click on it. This model works best for companies aiming to improve brand awareness rather than generate direct sales.
Product Listing Ads. Also referred to as Google Shopping Ads.
Pay per click, or PPC, is the most widespread paid search model and is often used to refer to paid search in general. As mentioned above, it is effectively the same as Cost Per Click (CPC): the advertiser pays the search engine for every click on their ad.
Search Engine Marketing, also known as Search Marketing, is a nebulous term. It is often used to refer purely to paid search advertising, but can also encompass SEO (Search Engine Optimisation).
Google Ads (known as Google AdWords prior to July 2018) is Google’s own advertising network. It offers PPC/CPC and CPM advertising as well as site targeted banner, text and rich media ads.
By using Google Ads, you can show your ads on one or both of Google’s advertising networks:
- Google Search Network, which encompasses any ads that appear on Google search results pages, including Google Search, Google Shopping, Maps and its various search partners.
- Google Display Network, which covers any website that partners with Google, and other Google sites such as Gmail and YouTube.
With Google Ads, if you choose CPC, you can set your bid (the amount you’re willing to pay for each click) to manual or automatic. With manual you choose your bid amounts, with automatic Google chooses the bid amount for you within your budget. With CPC and CPM you can set your maximum bid amount.
What are the drawbacks of using Google Ads?
Google is always rolling out new features and improvements to its products, so something that appears to be a major issue or oversight on Google’s part will often be fixed further down the line – though sometimes only after several years have passed.
For example, in 2013 Google rolled out Enhanced Campaigns, which allowed advertisers to target people based on time of day, location and device. However, with this update came an end to advertisers’ ability to target tablet users separately from mobile and desktop users.
Google argued that as many users were swapping out their home PCs for tablets, the behaviour being exhibited was similar enough to group both device types into the same category, and so desktop and tablet users were treated as one and the same.
Google Ads users complained bitterly, and finally in 2016, Google announced increased control over device-level bidding in Enhanced Campaigns, which included the return of tablet bidding.
If you’re used to advertising on Facebook, Google’s audience targeting will also seem much less finely-honed. Google allows targeting by age, gender, location and device type, which gives you several options to be going on with – but doesn’t come close to Facebook’s level of granularity.
Of course, the nature of search advertising (where the user shows intent and is more likely to be in the market to buy) is also different to Facebook’s social advertising, and so the results you’ll see from the two platforms will always differ. However, don’t approach Google Ads expecting to directly reproduce Facebook’s granular targeting.
The Bing Network (formerly known as the Yahoo Bing Network)
Google Ads’ closest rival is the Bing Network, owned by Microsoft, which owns its biggest search rival, Bing. The Bing Network was previously known as the Yahoo Bing Network, and – as the name suggests – also encompassed advertising on Yahoo Search, as well as syndicated partners like Facebook, Amazon and Monster.
However, in 2016 Microsoft and Yahoo renegotiated the terms of a 10-year search deal that existed between the two companies, and control of ad sales and account management was returned back to each company, where previously it had been handled jointly. Bing subsequently announced the Bing Network, which represents an expanded network of syndicated partners, including AOL, the Wall Street Journal, Infospace and Gumtree.
According to statistics from Bing Ads, at the time of writing the Bing Network has a 24.7% market share in the UK, with 960 million monthly searches. In the USA, Bing’s market share is higher at 33.9%, reaching 136 million unique searches with a total of 6 billion searches every month. The Bing Network also has a 16.5% market share in Canada, with 403 million monthly searches, and a sizeable market share in parts of Europe, including France (18.5%) and Norway (17.1%).
While Google, as the world’s most popular search engine, will naturally offer much greater reach with Google Ads, there are advantages to buying ads on a less-popular search engine like Bing, including reduced competition and lower cost per click. As we’ve seen from the screenshot earlier on, at times yours may be the only company with a sponsored ad slot, allowing you to effectively own the sponsored results for that search.
Data from WordStream has also indicated that click-through rates may be higher for Bing Ads than Google Ads – particularly for Bing’s Expanded Text Ads – with an average CTR of 2.83% on Bing Ads across all industries, versus 1.91% on Google Ads.
Add to that the fact that you can still reach a significant audience on Bing’s network that aren’t present on Google, and it’s worth considering whether it might be beneficial to run some additional ad campaigns on Bing and monitor their performance.
Why should you use paid search?
The biggest benefit of paid search is your company’s appearance at the top of the search engine results page. While it’s always possible to improve your organic search strategy in an attempt to rank in position 1 – or position 0, with a featured snippet – on the SERP, paid search will guarantee it. This is all the more important on mobile, where a smaller screen means that increasing amounts of real estate are given over to sponsored results.
Multiple surveys have also found that many searchers are unable to tell the difference between paid and organic search results (2016 data, published by Ofcom, found that only 49% of adults could reliably identify sponsored search results as ads), implying that there is often no difference in searchers’ willingness to trust organic search results over paid results.
If you have enough investment, PPC is the fastest way to get to the top. If you know your way around the platform, you can set up a PPC campaign in less than an hour and appear immediately in the sponsored results.
Tracking is also a lot easier using search marketing. You no longer have to take a gamble on ads you’ve paid for in advance in other media, with little way to measure how successful they are. With paid search, every ad, keyword and penny spent can be tracked, allowing for a more accurate ROI. This also means it’s a lot easier for an advertiser to test campaigns too.
All of this, along with access to each search engine’s affiliate network websites and products, and the ability to schedule ads and target them to specific locations and times, makes paid search an essential part of your marketing strategy.
Alternatives to paid search advertising
If you run a small business, have a tight marketing budget, or simply don’t want to jump into bed with the major search engines, you can still make significant headway with organic marketing.
Although it seems like marketing is increasingly “pay to play”, there is a lot to be gained from a savvy organic marketing strategy, whether that be search engine optimisation (SEO) or social media campaigns.