As paid search ads originally only sold on a PPC basis, PPC became the shorthand name for paid search. However Paid Search now supports many payment models, so PPC is not a useful name for it. The nickname does persist, however.
The Pay Per Click equation is:
PPC = Amount Paid ÷ Clicks
What it looks like
This is an example of a paid search ad. It might be running on any ad model, but when people say PPC they likely mean this type of ad:
If you buy clicks, you should *only* expect clicks. If you want conversions of any type, a Pay Per Click campaign is not a good idea (run a CPA campaign instead). More clicks do not necessarily equal more conversions.
7 Things To Know About Pay Per Click Advertising
- Not all clicks are created equal. Some people click on ANYTHING, and ad platforms’ algorithms will sell these clicks for cheap (as they rarely lead to conversions). Paying less for clicks often isn’t the best plan.
- According to WordStream’s benchmarks, average PPC rates on Google Ads range from $0.21 (for Dining & Nightlife ads) to $15.82 (for Legal & Government ads). Most hover somewhere in the $1-$3 range though.
- Don’t worry about the eCPM for Pay Per Click ads. A (theoretical) perfect Pay Per Click ad would get 1 click for every impression. Therefore the more impressions you get, the further you are from perfect. This means that when you get more impressions for the same money, you’ll also get a lower CPM despite running worse ads.
- There are some pages on the internet that say CPC stands for “Cost Per Conversion”, and frankly nothing (in Digital Marketing) has ever made me angrier. It. Does. Not.
- Surprisingly, ads on search engines were initially welcomed with open arms (PPC Protect have a great history of PPC here). Early search engines were bad at distinguishing real sites from spam – so paid search results were generally considered more likely to be legit.
- Google AdWords (now called Google Ads) didn’t start PPC advertising. It launched in 2000, but a website called Planet Oasis launched the first Pay Per Click model in 1996, and an early search engine called GoTo launched the first bid-based PPC ads (in 1998).
- PPC (Pay Per Click) means the same thing as CPC (Cost Per Click). All other payment models were standardised to start with “Cost” instead of “Pay” (eg CPA – Cost Per Acquisition etc), but PPC is the oldest term so it persists.
Other names for PPC (synonyms)
CPC, Cost Per Click
Not to be confused with
Paid Search – some Paid Search ads run on a CPC basis, but not all Paid Search ads are Pay Per Click, nor are all PPC ads Paid Search.