What is PPC? A starter guide to pay-per-click advertising

Pay-per-click (PPC) advertising puts your business directly in front of your target audience in a controlled way. 

With PPC, you set the budget, you choose who sees your ads, and you only pay when someone clicks. 

This used to make PPC a powerful tool across all stages of the buying journey. But that’s changing. 

PPC ads are no longer viable for the full marketing funnel

PPC is still one of the most effective ways to reach people at the moment they’re ready to act, but it keeps getting more expensive. 

PPC success has always been driven in large part by budget, and costs per click appear to be increasing year over year. This means that all else being equal, advertisers continually need to spend more to get the same results.

And the level of competition for visibility is rising alongside direct costs.

When I scroll on Facebook and LinkedIn, I see one ad for roughly every two to three organic posts (I did actually test this and count). This means I see dozens of ads in just a few minutes on a social media platform, making it hard for any one publisher to stand out.

But the battle for visibility isn’t just with other advertisers. The space that PPC ads occupy on search results pages is also shrinking. 

AI Overviews now frequently appear above sponsored results, pushing paid listings further down the page. And at the time of writing, AI Overviews rarely contain ads themselves. 

Plus, users can also now collapse sponsored results that appear on search engines entirely with a single click.

The result is that a PPC campaign built around awareness can burn through your budget fast with little to show for it. And even a campaign to drive conversions from lower down in the funnel will struggle if you don’t nail the fundamentals of ad relevance and quality. These fundamentals are what this guide will focus on.

What is PPC?

PPC stands for pay-per-click and is a model of digital advertising where you pay a fee each time someone clicks on your ad. 

That means PPC allows you to only pay for visits to your website, landing page, or app, rather than just paying for your ad to be seen.

Most PPC advertising happens through search engines and social media platforms. Google Ads, Meta Ads Manager, Microsoft Advertising, TikTok Ads Manager, and LinkedIn Campaign Manager are among the most widely used PPC platforms. These platforms typically use auction systems to decide which ads to show and where. 

But the businesses that get the best returns from PPC aren’t necessarily the ones spending the most money. They’re the ones whose ads, keywords, and landing pages are most relevant to the people they’re trying to reach.

PPC vs. SEO vs. SEM

Here’s how PPC, SEO, and SEM compare:

• PPC is paid advertising where you bid to appear in search results, social media feeds, or other places across the web
• Search engine optimization (SEO) is the practice of improving your website and online presence to increase your visibility in search results
• Search engine marketing (SEM) is an umbrella term that can mean a combination of SEO and PPC but is increasingly used to just mean paid search marketing

A good strategy often involves both SEO and PPC advertising. This helps brands both build long-term visibility and drive immediate results with targeted campaigns.

What are the benefits of PPC advertising?

The main benefits of PPC advertising are how quickly you can get results, the control you have over audience targeting, and the brand visibility you get even when people don’t click.

A PPC campaign can drive traffic to your site on the same day it goes live. This makes it particularly useful for product launches or time-sensitive campaigns (e.g., holiday promotions).

With most major PPC platforms, you also get a lot of control over who sees your ads. You can target by factors like search query (keywords), location, device, time of day, demographics, and more depending on the platform. This means PPC ads can be highly effective at reaching specific audiences.

Finally, pay-per-click advertising also puts your brand in front of more potential customers. People see your name every time your ad appears — even if they don’t click. That repeated exposure helps build brand recognition over time.

What are some of the main types of PPC ads?

There are four main types of PPC ads:

• Search ads: Text-based ads that appear in traditional search engine results when someone types in a relevant query. They’re best for reaching people who are already looking for what you sell.
• Display ads: Image or banner ads, often appearing on websites. These ads are better suited for building awareness or targeting specific demographics or interests.
• Video ads: Run on platforms like YouTube and TikTok. Video ads are best for reaching a wider audience and building brand awareness (although strong video ads can drive conversions, too).
• Shopping ads: Show a product image, price, and store name directly in search engine results. They’re built for ecommerce and tend to perform well for buyer intent searches.

Ads can also appear in AI-generated answers. These can appear as text-based ads, or as shopping-style ads for product-related queries. They’re not particularly common at this point. 

What are the main PPC platforms?

Here are the main ad platforms and what they’re best suited for:

Platform	Best for
Google Ads	Reaching high-intent searchers across search (including AI search responses), display, shopping, and YouTube
Microsoft Advertising	Reaching audiences that tend to use the Bing search engine, including its AI features
Meta Ads Manager	Targeting specific demographics and interests on Facebook and Instagram
LinkedIn Campaign Manager	B2B campaigns targeting by job title, industry, or company size
TikTok Ads Manager	Reaching younger audiences with short-form video content

How does PPC work?

PPC works by running an automated auction to determine which ads entered into the auction appear and in what order. 

You submit a bid for how much you’re willing to pay per click, and the platform uses that alongside other factors to decide whether and where your ad shows up.

Your bid matters, but how relevant your ad is to your audience and your associated landing page also matters. 

How the PPC auction works

The PPC auction works slightly differently depending on the specific platform you’re using. 

For example, Google weighs the following factors for its auction process: 

• Your bid 
• The quality of your ad and landing page
• The expected impact of any ad assets you’ve added (like phone numbers or sitelinks)
• Minimum quality thresholds your ad has to meet
• The context of the search for search ads (device, location, time of day, and the search terms used)
• How competitive that particular auction is

Google’s ad auction factors determine both whether your ad is eligible to show and, if so, where it should be displayed.

A more relevant ad can outrank a higher bid, and you may also pay less per click. Google explains this:

“Even if your competition has higher bids than yours, you can still win a higher position at a lower price by using highly relevant keywords and ads.”

Meta’s ad auction works on the same principle, factoring in ad quality and estimated action rates alongside your bid. 

How to start a PPC campaign

Use the steps below to create your first PPC campaign.

1. Set your goals

Before you touch any campaign settings, decide what you want your PPC campaign to achieve. 

Your goal shapes every decision that follows, from which keywords you target to what your ads actually say.

Common PPC goals include:

• Building brand awareness
• Driving traffic to your website
• Generating leads
• Increasing sales
• Driving store visits

Here’s what selecting a goal looks like in Google Ads:

Your goal affects how you set up your PPC campaign. For example, a campaign built around brand awareness will look very different from one built around driving purchases, even if both are running on the same platform.

For a brand awareness campaign, you might use broad audience targeting and measure success by impressions rather than clicks. For a conversion-driven campaign, your audience targeting will be narrower, and leads or sales will be your measure of success. 

A business might run multiple PPC campaigns with different goals at one time. They can use each one to reach people at a different stage of the buying journey, from people who’ve never heard of them to people who are ready to buy.

2. Do competitor research

Once you lock in your goals, spend some time understanding what your competitors are doing and which keywords you’ll be targeting if your campaign requires keywords.

If you’re planning to run search ads, use Semrush’s Advertising Research tool to see the search ads a competitor is currently running. The “Ads Copies” tab shows you the exact copy they’re using and the keywords they’re bidding on. 

Click on each ad’s headline to check out the competitor’s ad landing pages. And see how they attempt to engage visitors and drive conversions. This gives you a useful baseline of the angles that are already being used and which keywords are likely driving results. 

If you’re running social ads on Meta or LinkedIn, both platforms have public ad libraries where you can search for any advertiser and browse their active ads. 

For example, visit the LinkedIn Ad Library and search by advertiser name or keyword to get ideas for your own ad copy. 

3. Set a budget and choose a bidding strategy

Your budget determines how much you’re willing to spend in total, while your bidding strategy determines how that budget gets allocated across individual ad auctions. 

On many platforms, you set a daily budget rather than a total campaign budget. A simple way to calculate this is to divide your monthly budget by 30.4. So if you have $1,500 per month to spend, your daily budget is just under $50. 

Platforms like Google Ads may spend more or less than your daily budget on any given day but will stay within your monthly total.

Your bidding strategy should align with the goal you set in the first step. If you’re focused on driving traffic, a cost-per-click (CPC) strategy makes sense. That means you pay each time someone clicks, and you can set a maximum bid to control costs. 

If you’re optimizing for conversions, most platforms offer automated strategies that adjust your bids in real time based on the likelihood that a given user will take your desired action. These work well once you have enough conversion data for the platform to learn from, which takes time to gather.

Most platforms also let you choose between manual and automated bidding. Manual gives you direct control over what you bid in each auction. Automated hands that control over to the platform’s algorithm. 

In practice, most users will tend to use some form of automated bidding, allowing the platform to set bids based on how likely it is for the ad to get a click or conversion.

Here’s what it can look like to set a bidding strategy using LinkedIn Ads:

4. Define your target audience

Every advertising platform offers different targeting options to help you reach specific audiences to get the best results.

Some common targeting options include:

• Demographics: These include factors like age, gender, and location (which can be as broad as a country or as specific as a particular ZIP code)
• Socioeconomics: These include factors like income, household size, and education level
• Interests and behaviors: These include hobbies, activities, purchasing behaviors, online interactions, etc.

For search ads, your keywords do a lot of the targeting work for you (more on that in the next step). For example, someone searching “accounting software for freelancers” has already told you a lot about who they are and what they want. 

But you can still narrow your audience further. For example, by location if you only serve certain markets. Or by device if your landing page converts better on desktop than mobile.

For social ads on platforms like Meta or LinkedIn, you’re not reaching people based on what they’re searching for, so you need to define your audience more explicitly. 

On Meta, that means targeting by demographics, interests, and behaviors. On LinkedIn, you can target by job title, industry, company size, or seniority, which makes it particularly useful for B2B campaigns.

5. Choose your keywords (for certain ads)

Choosing keywords involves finding terms your target audience is actively searching for, understanding what clicks will cost, and controlling which searches trigger your ads. 

Not all PPC campaigns will require keyword selection, but search, display, and some video campaigns do.

When choosing keywords, you need to factor in key metrics and, for search campaigns, keyword match types.

Key metrics

When evaluating keywords, focus on these three metrics:

• Search volume: The average number of monthly searches a keyword gets. Higher volume means more potential reach, but it also usually means more competition.
• Cost per click (CPC): The average amount advertisers pay per click for a given keyword. This varies based on how many advertisers are bidding on a term, how much advertisers are willing to pay, and how relevant your ad and landing page are.
• Intent: What the searcher is trying to achieve. A keyword like “multi car insurance policy pricing” signals someone closer to making a decision than “what is multi car insurance.” More specific keywords often have higher conversion potential.

Semrush’s Keyword Magic Tool lets you filter for these metrics to help you find keywords for your PPC campaign. Just enter a relevant seed keyword (a broad term related to your business) and use the volume, intent, and CPC filters to find keywords that suit your campaign needs.

Match types

For search campaigns, match types control which searches can trigger your ads. 

The three main keyword match types are:

• Broad match: Your ad can show for searches related to your keyword, even if the exact words aren’t used. These terms drive the highest volume but give you the least precision.
• Phrase match: Your ad shows for searches that include the meaning of your keyword. This is a more controlled option than using broad match terms.
• Exact match: Your ad only shows when someone searches your keyword or a very close variation. This is the most precise option, but it may miss related searches that could be valuable.

It’s a good idea to start with a mix of phrase and exact match, then adjust based on performance data.

You should also consider setting up negative keywords before you launch. These are terms you explicitly exclude, so your ad won’t show for irrelevant searches. 

For example, if you sell paid accounting software, adding “free accounting software” (and variants of that) as a negative keyword prevents your ads from showing to people who aren’t looking to spend money.

6. Prepare your ad creative

Your ad creative — the visual and textual components of your ad — needs to be compelling enough to earn the click. 

What your ad creative looks like depends on the platform and campaign type you’re running. But you need to do some or all of the following:

Write your ad copy

For search ads, your copy has three main components:

• Headline: The prominent text users are likely to see first. Include your main keyword and lead with the value you’re offering.
• Description: The supporting text beneath the headline. Use this to address a pain point, highlight a key benefit, or include a call to action.
• Display path: The last portion of the URL shown in the ad. You can customize this to make it more relevant to the search query, even if it doesn’t match your exact landing page URL.

Here’s what it looks like to add these features to Google Ads:

Follow these tips when writing your ad copy:

• Ensure your headline is clearly relevant to the search terms you’re targeting
• Lead with benefits rather than features
• Write different headline and description variations for each distinct keyword (or group of keywords) you’re targeting

Optimize and upload images

For display and social ads, your images need to meet the platform’s size requirements and represent your product or brand clearly. 

Tools like Canva and Adobe Express make it straightforward to resize and edit images to any ad platform’s specs. 

For example, Google Ads recommends 1,200 x 628 pixels for display campaign banner images. While Meta recommends at least 1,080 x 1,080 pixels for in-feed images.

Follow these tips to create great ad images:

• Use high-contrast visuals that stand out against a white or neutral page background
• Keep text minimal and large enough to read on all devices
• Show the product itself (if relevant) rather than decorative imagery

Edit and upload your videos

For video ads on platforms like YouTube or TikTok, aim to capture attention in the first few seconds before users are allowed to skip. 

Most viewers can skip ads after five seconds, so your opening needs to give them a reason to keep watching. 

Follow these tips when creating video ads:

• End with a clear, on-screen call to action rather than just a voiceover
• Add captions, since video ads are often watched without sound
• Keep your brand or product visible early — don’t save it for the end

7. Build your landing page

For PPC to work well, you need to create an ad that gets a click and a landing page that aligns with what the user expects to see when they click your ad. 

To illustrate this, here’s a PPC ad for Zoho’s free accounting software that appears when you search for “free accounting software for small business”:

When you click the ad, you see the landing page below. Note that it uses the same “free accounting software” headline as the ad, and the “for small businesses” part directly reflects the initial search query.

If your goal is to drive leads or sales, a mismatch between your ad and landing page makes it more likely that users will click off the landing page without converting.

Here’s how to make the most of your landing pages:

• Unless you’re trying to drive brand awareness, it’s usually best to send traffic to a dedicated landing page — not your homepage. Your homepage serves too many audiences and too many goals to convert paid traffic effectively.
• If your goal is to drive leads or sales, keep the page focused on a single action. And make the call to action visible without scrolling.
• Ensure the page loads fast. Slow load times can increase bounce rates.

8. Manage and refine your campaign

Once you launch your PPC campaign, you need to monitor your results to refine it and improve its performance. 

Common metrics to monitor include:

• Click-through rate (CTR): This tells you whether your ads are resonating with the people who see them
• Cost per click (CPC): This will determine how effectively you’re spending your campaign budget across specific keywords (for search campaigns) or demographics/interest groups (for display or social campaigns)
• Conversion rate: This tells you how well optimized your ad and landing page are
• Return on ad spend (ROAS): This tells you how profitable your campaign is (usually reported as a ratio, like 2:1)

Every PPC campaign is different, and your goals will determine the specific optimizations you need to make. If you’re running a search campaign with a focus on conversions, there are a few general optimizations you can make to improve performance:

• Find keywords that are generating clicks but no conversions. These are keywords you might be wasting money on. Or that your landing page may not be properly optimized for. 
• Tweak the landing page and see if your conversion rate increases. If not, the keyword or audience segment may not be worth targeting. Or you may need to continue tweaking the landing page. If you deem the keyword not to be worth it, add it to your negative keyword list so your ads stop showing for it.
• Test alternative headlines and descriptions to see what drives a better CTR. This is something you can do across all your ads, but it’s best to start with those that are performing relatively poorly.

Platforms like Google Ads typically let you enter variations of headlines and descriptions, which the platform will use to generate its own variations. It’ll then iterate through these and focus on showing the best-performing combinations. 

Avoid making too many changes at once. If you adjust your bid, your copy, and your targeting simultaneously, you won’t know which change drove the result. 

Test one variable at a time where possible and give changes enough time to generate meaningful data before drawing conclusions — ideally at least a week.

Set up your first PPC campaign today 

Running an effective PPC campaign requires careful planning, but it’s also an ongoing process. Plus, the world of PPC marketing is super competitive, so you need to continuously understand what your rivals are doing, too.

Semrush’s advertising tools let you track your own performance alongside your competitors’. This way, you can see which keywords they’re bidding on, how their copy is evolving, and where they’re adjusting their spending.

To use this data to continuously inform and improve your own campaigns, try the Advertising Toolkit today.