How does paid search advertising work?

When a user enters a search query into the search engine, the engine returns a list of organic search results. It also determines which ads to show that are relevant to search query. These ads, which sit adjacent to or above the organic listings, used to be small, unobtrusive text-based ads, but now may come with enhanced listings that include images and other data such as price and merchant name. While high ranking in the organic listing is the ideal that most webmasters are striving for, optimising a page to rank in organic search results can be difficult, and getting a consistency high and sustainable raking takes a substantial amount of effort and a lot of time. Marketers are striving for organic listings because it’s free and because users can see organic results as impartial: they trust, and therefore click on, organic listings in preference to paid ads.

Time without traffic is a missed opportunity for your online business. That’s where paid search advertising comes in. By agreeing to pay the search engines a fee per click for your ads to show up as sponsored result when a user types in your chosen keywords, you can put your site in front of your prospect in the SERPs almost immediately. When the user clicks on one of your ads, you get a new visitor and the search engine bills you for the click.

PPC keywords are bid on by advertisers in an auction-style system: generally the higher the bid per click, the higher the ad’s placement in the SERPs. Most PPC systems also employ a ‘quality’ quotient into their ad placement rankings, based on the popularity of the ad (its click-through rate, or CTR) and the perceived quality of both the ad content and the landing page it points to (e.g. Google AdWords Quality Score).

Ryan, D., 2016. Understanding digital marketing: marketing strategies for engaging the digital generation. Kogan Page Publishers.

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