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PPC (Pay Per Click)

PPC

What is PPC?

The acronym PPC comes from the Pay Per Click advertising model that appeared on the Internet in the second half of the 1990s. An advertiser that uses the PPC advertising model pays the owners of the websites, advertising networks and marketing agencies for each click on the ad by a potential client.

Pay Per Click is the most popular online advertising model to find customers on the Internet.

When you open a search engine like Google, Bingo, Yahoo or any other, enter your search and at the top of the page you will see the advertisements that use the PPC model.

What is the difference between PPC and CPC?

PPC
PPC is an advertising model that forms the cost per click of an advertisement.
CPC
CPC is the cost per click that the advertiser pays.
Dov’è possibile inserire l’annuncio Pay-per-click?

Where can I place Pay-Per-Click advertising?

You can place Pay-Per-Click advertising on various platforms, but the most popular ones are Google Ads и Microsoft Ads (Bing Ads).

Both platforms allow you to use different ad formats, including:

  • Search Ads
  • Display Ads
  • Shopping Ads
  • Video Ads
  • Gmail Ads
But no matter which advertising format and platform you choose, the basic principle of PPC remains almost the same.
How is the cost per click formed in a PPC auction?

The cost per click can be either fixed or flexible. It is possible to set a maximum cost per click or to use automated bidding in the auction. There are several important factors to consider while setting the cost per click, such as:

  • Competition with other advertisers at the time of clicking
  • Indicator of ad quality
  • Maximum bid per click
  • Rank of the ad

To determine which advertisement must be shown in which ad space in the real-time auction it is calculated using the following formula:

Max Bid
+
Quality Score
=
Ad Rank
Ad Position
Plan Max Bid Quality Score Ad Rank Position
Advertiser I $2.00
10
20
1
Advertiser II $4.00
4
16
2
Advertiser III $6.00
2
12
3
Advertiser IV $8.00
1
8
Price per click is calculated according to the following formula:

Your price = Rank of the advertiser’s ad that appears below yours / Quality score of your ad + $0.01

Your price
=
The AD rank of the person below you
/
Your quality score
+
$0.01
Plan Max Bid Quality Score Ad Rank Actual CPC
Advertiser I $2.00
10
20 16/10+0.01 = $1.61
Advertiser II $4.00
4
16 12/4+0.01 = $3.01
Advertiser III $6.00
2
12 8/2+0.01 = $4.01
Advertiser IV $8.00
1
8 Highest CPC $4.01
i

The advertiser pays less per click if he has the highest ad quality score.

Esistono i metodi alternativi delle offerte?
Are there any alternative methods of bidding?
Besides CPC, there are also alternative advertising models such as CPM and CPA.

CPM (Cost Per Mille) is the cost per one thousand impressions of the advertisement in the visible area of the screen. This advertising model is less effective than PPC and CPA, because CPM only guarantees that your advertisement will be shown to potential clients, but there is no guarantee that the client will see it and it is even less likely that he will click on it.

CPA (Cost Per Action) is the latest and most effective advertising model on the market; it is based on a smart bidding system and focuses on getting the maximum number of conversions, no matter what the goal is (e.g. sale on the website, installation of mobile app, registration on the website, service order, etc.). The conversion rate is based on the target CPA bidding and the conversion probability established by the advertiser.

Looking for a PPC specialist?

Wake Up Italy's highly qualified marketing and PPC specialists with over a decade of experience will be happy to help you launch a successful advertising campaign, using any of the business models mentioned above, with a maximum result and the lowest cost per click. Contact us, we are eager to help you lead your business to a new level!

Il PPC Specialist