What is PPC advertising?
Quick answer
PPC, or pay-per-click, is online advertising where the advertiser pays only when someone clicks the ad, not when it is shown. Google Ads search campaigns are the best-known example; Microsoft Ads, Amazon and most social platforms offer PPC too.
Last updated
Updated · By Robert Breen
Why it matters
PPC is the fastest way to get in front of people who are searching right now. A new business can be on the first page of Google for "emergency plumber Denver" within an hour of setting up a campaign, which SEO could take months to achieve.
Because you pay per click and every click is tracked, PPC is also very measurable. You can see exactly what each sale cost and switch off what does not work the same day. That makes it a good testing ground for which messages and offers people respond to.
A worked example
A commercial cleaning company bids on "office cleaning services" and nine related keywords in its city, with a $50 daily budget. In a 30-day month it spends $1,500, gets 600 clicks at an average cost per click of $2.50, and 30 of those visitors request a quote (a 5% conversion rate).
The company wins 6 of the 30 quotes, each a contract worth about $900 a month. The cost per new client is $1,500 / 6 = $250, against roughly $10,800 a year of revenue per client. That return justifies raising the budget, while checking that cost per acquisition holds as volume grows.
Often confused with
PPC vs CPC
PPC is the type of advertising. CPC is a metric: what one click cost on average.
PPC vs SEO
PPC rents a spot in the sponsored results and stops when you stop paying. SEO earns unpaid rankings that take longer but keep working.
PPC vs CPM
Some ads, especially display and video, are bought per thousand impressions (CPM) instead of per click. You pay for being seen, whether or not anyone clicks.
Tips
- Start with a small number of specific, high-intent keywords.
- Send each ad group to a page that matches its promise.
- Track conversions before spending real money; without them you are judging by clicks alone.
Related terms
Learn it in a free lesson
- PPC Metrics Explained: CPC, CTR, CPA and ROAS With Examples (about 11 minutes)
Questions about it
- What is a good click-through rate?: A good CTR depends on the channel: search ads often get 3% to 6%, display and social ads well under 1%. How to judge yours against the…
- Should a small business start with SEO or PPC?: PPC first if you need customers this month; start SEO now if you can wait 3 to 6 months. Most small businesses end up doing both. A plan…
- How do you calculate ROAS, and what is a good ROAS?: ROAS is ad revenue divided by ad spend. A good ROAS is any figure above your break-even ROAS, which is 1 divided by your gross margin…
Related in the AI glossary
Frequently asked questions
- How much does PPC cost?
- You set the budget. Clicks cost from under $1 in low-competition niches to $50 or more in law and insurance. Many small businesses start at $20 to $50 a day.
- Is Google Ads the same as PPC?
- Google Ads is the largest PPC platform. Its search campaigns are PPC; some of its display and video campaigns can also be bought per impression.
- Is PPC worth it for a small business?
- Often, for services people search for when they need them now. Work out how much you can afford to pay for one customer first, then test.
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