Leadgenerering
15. maj 2021
What is PPC?
PPC is an abbreviation for Pay Per Click, which is a billing model within online marketing where you are charged based on the number of clicks made on your ads.
Definitions
The term PPC is most often used as a reference to marketing tools that offer advertising directly in search engine results. Most commonly, these are tools such as Google Ads and Bing Ads, as these tools offer this billing model.
What is the difference between PPC and CPC?
PPC is closely related to the abbreviation CPC (Cost Per Click), which refers to a metric that shows what is paid for each individual click on your ad. With the PPC billing model, you are invoiced when DKK 4,000 has been spent or after 30 days – whichever comes first.
When is something billed as PPC?
Google Ads and Bing Ads are the most common tools that offer PPC as a billing model.
A common misconception is to believe that tools offering some form of CPC strategies are also billed as PPC, but that is simply not the case.
Media such as Facebook, Instagram, TikTok, Snapchat, and LinkedIn all offer a CPC strategy, but ultimately you are charged for the number of impressions of your ads.
The CPC strategies these media offer are solely about the platforms trying to prioritise showing your ads to people who are likely to click on them. However, if it takes 10,000 impressions before you get a click, then your click price for that one click is what 10,000 impressions would have cost. So ultimately, you are still charged for the number of impressions (CPM).
With Google Ads and Bing, it is actually Pay Per Click.
The logic behind PPC
If you are shown 10,000 times before you get a click, you pay only the amount for the click that you have previously chosen to bid for a click. So if you bid 5.5 kroner for a given click and it takes 45,000 impressions before you get a click, you are charged only 5.5 kroner.
In short; if the number of impressions affects your click price, then it is not PPC, but CPM billing instead.
Advantages and disadvantages of PPC billing
The advantages and disadvantages of PPC billing are directly linked to the channels that offer this billing model. As this is marketing in search engine results, you have access to highly qualified traffic, as these are people actively searching for your product or service. However, you depend on someone actually searching for it.
You only pay for the clicks you actually get, but there are limited secondary effects to gain from people who choose not to click. Those who do not click your ad have likely clicked a competitor’s and are therefore taken out of the market.
With CPM tools, you have the opportunity to reach more people with your message on a medium (social media) that they often visit several times a day. So whether they click or not, you have the opportunity to build your brand with a larger target audience.
Advantages of PPC billing:
- You are charged solely for the traffic that has been acquired.
- If you get no traffic, you are not invoiced.
- The traffic is more qualified, as these are people who have actively sought out a service, product, or supplier themselves.
Disadvantage of PPC billing:
- Click prices are often higher for PPC channels than for other channels.
- Traffic volume is often lower than with CPM billing.
