It’s an acronym for pay per click (PPC) and means exactly what it stands for- you pay for each click. A click to what? A click to any online link which could be a website, blog post, product page, video, or any online “link”.
Before we dive into how PPC works, we need to talk about why PPC matters.
Let’s compare how an average person would look for something in the 1950s versus the 2020s.
In the 1950s, an average person looking for a product or service would do two things (typically in this order):
- Visit the general store.
- Vocally ask a person. This could be a neighbor, family, church members, or even your local grocery store clerk.
In the 2020s, we do one thing:
- Pull out our phones and search it in some app (e.g. Safari, Chrome, Reddit, Amazon).
It’s become so much easier to search for things! But there also lies the problem, too, where we have too many options.
Imagine we’re shopping for apricot jam in 1950.
We slowly cart our way to aisle 7. We pass the baking supplies, nut butters, cooking oils, and spices. On the right side we glimpse the jam section which is on 3 maybe 4 shelves. A decent selection of brands and price points. We find apricot jams on the 4th shelf and see about 3 to 4 brands. A satisfactory selection. We grab the one we want, add it to our cart, and eventually find our way to checkout.
Now let’s imagine shopping for apricot jam in the age of the internet. We mouse our way to aisle 7. Wow, that’s a lot of orange jars. We take a breath to comprehend the reality that the entire aisle is apricot jams- over 500 brands to choose from! To make matters more complicated, we see multiple grocery clerks adding new brands at the end of the aisle without pausing.
Searchability or Making your Brand Easier to Find
It’s clear we have too many options nowadays. Google handles roughly 5 million searches per minute. That’s just Google. Don’t forget about other sites where people conduct searches (e.g. Twitter, Instagram, Yahoo). That’s a lot of results for competing products and services.
Statistic says about 1 in 10 visitors (or 10%) will click on any link if it is on the first page of a search result. But after the first page, it becomes 2 in 100 visitors (or 2%). That’s kind of a big gap.
Being on the first page of search exponentially grows traffic to your “link” which can be your product or service.
There is a problem though. There are only 20 spots on the first page of a search.
How PPC Works
Introducing PPC, a way to standout in the millions or billions of searches for say “blue jeans”. PPC is a way to push your “link” to the front of a search result. There are designated spots on every page of search that are paid (often called Sponsored Placement).
The PPC model is built on an auction system where the highest bidder will win the 1st ad spot. The 2nd highest bidder will win the 2nd ad spot. And so forth.
Wait. Does that mean you can pay for spots when it’s not related to what I’m searching for? Say for instance I’m searching for baby clothes, but I see ads for Toyota Tundras? In short, yes you can. However, there have been lots of changes to prevent this from happening.
Remember, it costs money for each click, which means paying for spots that aren’t relevant to your product will likely be not profitable. This is because people are not searching for trucks. They are searching for baby clothes. Imagine going to the sandwich shop and asking for a Turkey Sandwich. They offer you motor oil. I might actually need motor oil, but that’s not what I’m looking for right now. I’m hungry and just want my Turkey Sandwich.
It is also possible people to track shoppers who have searched for Toyota Tundras in the past but are now searching baby clothes. This is called re-targeting and is not relevant to the point above.
Why Does PPC Exist?
There are a few reasons why the PPC model was invented and exists:
- There is limited supply for paid spots – There are a limited number of paid spots to stand out among the search crowd.
- There is ample demand for said paid spots – Companies are eager and waving money around looking for ways to stand out of the crowd.
- Platforms (e.g. Google) make a boatload of money by selling paid spots.
- Advertising is one of the largest industries in the world at $837 billion annually, according to Statista.
Wrap Up
Whether you’re a business owner, newly minted marketing specialist, or a lifelong learner, I hope this serves as an overview for understanding PPC and how it impacts your search result. I believe PPC is here to stay and will continually evolve as more and more content is released daily.
For further reading, you might be interested in the ethics behind paid advertising (or paid media).
I hope to write more around the broader Amazon shopping ecosystem which is my specialty.
If you’re interested in learning about our Amazon AMS management, reach out to us.