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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.

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Questions about it

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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