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What Every CMO Should Know About PPC

February 17, 2018
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As your company’s CMO, it’s your job to stay up to date on all the latest marketing trends in the industry. And one of the hottest strategies to use right now is pay-per-click advertising, or PPC.

What Is PPC?

By now you should be familiar with pay-per-click advertising, but here’s a quick recap if you need a refresher.

A PPC ad is an online tool you can use for your goods or services that will appear when someone enters a relevant query into a search engine. If you use any ads that appear with search results on Google and other search engines, then you are already using PPC advertising.

What’s often misunderstood about PPC ads is how they work. It isn’t a process where the more you pay, the more prominently your ads will appear over your competitors on a Search Engine Results Page, or SERP. With PPC ads, you are only charged when a user actually clicks on your ad, which gives these ads their name.

The prominence of your ad on the SERP is actually determined by an Ad Auction, which is an entirely automated process employed by Google and the other major search engines. This Ad Auction determines the relevance and validity of advertisements that appear on their SERPs.

Related: 5 Things Your PPC Agency Should Always Be Monitoring

But since it is an auction, you actually “bid” on keywords that you want to trigger your ads to be displayed. For instance, if your company sells handbags, you want that to be the term that triggers your ad. So if someone searches “handbags,” Google will perform its algorithm that the Ad Auction is based upon to determine which ads are displayed, in what order, and by which advertiser (hopefully you). Because of the vital role keywords play, PPC ads are also sometimes called “keyword advertising.”

Pay-per-click ads also come in a variety of forms. Let’s take a look at each of them to help you understand the main objective of each type of ad and see how they might be able to help your business.

Paid Media Services

Search Text Ads

Search Text Ads are the paid ads that appear above and below Google search results. This is the simplest form of PPC ad you can utilize, and has three parts: the headline text, a display URL, and a short description.

The Key Performance Indicator (KPI) of your search text ads is conversions, your conversion rate, and the cost per conversion. These three factors will help tell you the effectiveness of your Search Text Ads.

Related: 4 Ways to Monitor Your PPC Competitors

These ads are great for your lower funnel advertising, which focuses on driving leads to conversions, ultimately leading to increased revenue. They should have a strong call to action that turns your lead into a conversion. For ecommerce sites, you’ll want these ads to offer a valuable piece of content that readers will want enough to give you their contact information.

Another tip is to make sure your description text fits within Google’s character limits. Google Search Text Ads have a limit of just 80 characters for your description, so you want to make sure your full message fits within these limits. If your description is too long, it will break off into an ellipsis and your target customers may not even get to see a vital piece of information.

Shopping Ads

Shoppings Ads are perfect for any ecommerce site. Online retailers can use Google’s shopping campaigns to promote your inventory, generate traffic to your site and store, and find better, more qualified leads. These ads are more than a text ad–they show a picture of your product with a title, the price, your store name, and more. They are able to give consumers a good idea of what your product is before they click the lead, giving you a more qualified lead.

Like Search Text Ads, these also fit in the lower funnel of your advertising, and their effectiveness can be measured by their cost, revenue, and return on advertising spend (ROAS).

Related: 11 Settings You Need to Check Before Posting a New AdWords Campaign

Because of the added specificity and visibility, many companies prefer and have experienced better clickthrough rates (CTR) using a Shopping Ad over a Search Text Ad to sell your product. The ads are shown in the same location, but will appear for shopping-related searches. Having more information right there in your ad not only gives you more qualified leads, but also makes them more likely to complete a purchase on your site.

Shopping Ads use your product attributes rather than keywords to appear in relevant search results. In the Ad Auction, you bid on product groups instead of terms.

Display Ads

Display Ads are highly customizable and can appear wherever you want them to. They can be text, banner, Gmail, or mobile ad campaigns, or any combination of the four. With display ads, you can create a highly targeted campaign based on your customer’s interests and demographics, among other attributes. You decide how much you want to spend to reach your target audience and display the ads to those who want them the most.

By making your company more visible, Display Ads help to build your brand awareness. They will impact your site’s direct traffic as well as searches for your brand. You can measure this by doing a heavy, isolated ad campaign for a few weeks, then noting the boost in your direct traffic.

Other ways to measure your DIsplay Ads include your overall impressions, meaning how many eyeballs are seeing your ads, and then the cost per thousand impressions. Since these clicks might not convert right away, it won’t always be a direct response, so you should also measure your impression assisted conversions and click assisted conversions.

Display Remarketing

Display Remarketing ads show up to people who have previously visited your site. They will help you reconnect with anyone who left your site without making a purchase. These are more direct response focused, for example, you can have a specific list of ads for those who placed something in their shopping cart but didn’t complete their purchase.

Related: Getting Started With Paid Advertising

The KPI for Display Remarketing is a blend of strategies, and impression heavy. You want your remarketing ads to show up when consumers are comparison shopping, especially since they are familiar with your product, having already visited your site. This helps to entice more clicks to your site and potential conversions.

Other Measurements To Track

There are a few other measurements that factor into a campaign’s success or failure. These include soft metrics, such as the general sentiment on your company or brand, the sharing of your brand’s voice online, social shares, the time spent on your site, user engagement, and more. These are all measurable within your ad campaigns and should be taken advantage of. You’ll learn what pieces of the campaigns are strengths and weaknesses, and help you make them better moving forward.

Pre-click metrics help you understand what leads users to your site. This can help you figure out where your impressions, CTR, and, cost per click are coming from, and lead to better ad placements. Post-click metrics can be just as important. When visitors to your site leave, where do they go? Placing ads where they go when they leave could lead to more conversions, better cost per lead of acquisitions, and better ROAS.

Red Flags To Watch Out For

If you agency doesn’t report on your post-click activity for direct response channels, this is a major red flag. You’ll gain no visibility into your ad performance. Other red flags include poor campaign structure, too many match types in one campaign, little to no negative keyword applied to your campaigns, and not a high enough return on your investment.

Utilizing all of the metric tools at your disposal can help identify the issues if you have an ineffective campaign. You can use the tools to target better keywords for your business, reach more qualified leads, and turn your ad campaign weaknesses into strengths.

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