Pay-per-click (PPC) is a form of online advertising in which the advertiser pays only when someone clicks the ad, rather than paying for the ad to be shown. The best-known example is Google Ads, where advertisers bid on search terms and their ads appear above and below the organic results. PPC also covers ads on Bing, Meta, LinkedIn, Amazon, and most other platforms that charge by the click.
The appeal is speed and control. Unlike SEO, which takes months to compound, a PPC campaign can be live within a day, targeted to a specific city and a specific search, and turned off the moment it stops paying. The cost is that it stops producing the moment you stop paying, and that the auction rewards advertisers who have done the unglamorous work of building good landing pages and tracking their results properly.
How the auction works
PPC is often described as bidding for position, which is close enough to be misleading. On Google and Bing, every search triggers an auction, and position is decided by a combination of the bid and a quality assessment of the ad and its landing page. An advertiser with a highly relevant ad can outrank a competitor bidding more.
Google expresses this assessment as Quality Score, a 1 to 10 diagnostic built from three components: expected click-through rate, ad relevance to the search term, and landing page experience. Quality Score itself is a reporting metric rather than the number used in the live auction, but the signals behind it are real, and they work in both directions. Better relevance means better positions at lower cost per click; poor relevance means paying more for less.
The practical implication is the one most accounts miss: the cheapest way to lower your cost per click is usually to improve the match between the search term, the ad copy, and the page the click lands on. Bidding harder is the expensive way to solve a relevance problem.
The vocabulary
Impressions are the number of times an ad was shown. Clicks are how many people clicked it. Click-through rate is clicks divided by impressions.
Cost per click (CPC) is what you pay for each click. Cost per acquisition (CPA), sometimes called cost per lead or cost per conversion, is the total spend divided by the number of conversions, and it is the number that actually matters.
Conversion rate is the share of clicks that complete the action you care about. Return on ad spend (ROAS) is revenue divided by ad spend, which is useful for managing campaigns but ignores margins and every cost other than media. Return on investment accounts for both.
Impression share is the percentage of available auctions your ads appeared in, with the shortfall attributed to budget or to rank. It is the fastest way to see whether growth is limited by money or by quality.
Keyword match types
Match types control how loosely a search can relate to your keyword before your ad shows.
Exact match shows your ad for the keyword and close variants with the same meaning. Phrase match shows it for searches that include the keyword’s meaning within a longer query. Broad match lets Google show the ad for anything it judges related, including searches with no shared words.
All three have loosened considerably over the years. Exact match is no longer literally exact, and broad match now leans heavily on Google’s own interpretation of intent. That makes the search terms report, which lists the actual queries that triggered your ads, the single most valuable screen in the account. Reading it weekly and adding negative keywords for the irrelevant queries is the difference between a campaign that improves and one that quietly leaks budget.
Negative keywords block searches you do not want. For a service business, terms like “free,” “jobs,” “salary,” “DIY,” “course,” and the names of competitors you do not want to pay for are a reasonable starting list.
Campaign types
Search campaigns put text ads on results pages for chosen keywords. This is where intent is highest and where most service businesses should start, because the person is already looking for what you sell.
Display campaigns place image ads across the Google Display Network. Intent is low and click quality is usually poor, with the important exception of retargeting.
Shopping campaigns show product listings with image, price, and merchant, driven by a product feed rather than keywords. Essential for ecommerce.
Video campaigns run on YouTube, mostly for awareness.
Performance Max is Google’s automated campaign type, which uses one set of assets across search, display, YouTube, Gmail, Maps, and Discover, with the targeting handled by Google’s systems. It can perform well, particularly for ecommerce with a strong feed. It also gives up most of the visibility and control that made PPC attractive: limited placement reporting, limited keyword-level data, and a tendency to absorb conversions that branded search would have captured anyway. It is worth testing against a well-run search campaign rather than instead of one.
Local Services Ads sit above ordinary search ads for certain service categories and charge per lead rather than per click, with a Google screening process. Where they are available for your trade, they are often the highest-intent placement on the page.
What actually determines whether PPC works
Most underperforming accounts fail outside the ad platform.
The landing page. Sending paid traffic to a homepage is the most common and most expensive mistake. The page should match the search, state the offer immediately, and make the next step obvious. Doubling conversion rate halves cost per lead without touching a bid, which is why conversion rate optimization and PPC belong in the same conversation.
Conversion tracking. If form submissions and calls are not tracked accurately, every optimization decision after that is guesswork, and Google’s automated bidding has nothing real to optimize toward. Tracking should be verified, not assumed, and phone calls need call tracking if they matter.
Knowing what a lead is worth. Average deal value, close rate, and margin determine what you can afford to pay. Without those three numbers, there is no way to say whether a $90 lead is a bargain or a disaster.
Lead handling. Response time to an inbound inquiry affects close rate more than most account changes do. Paid media cannot fix a sales process that takes two days to call back.
Common PPC mistakes
Running on autopilot. Campaigns left alone for months drift as the search term mix changes.
Ignoring the search terms report. The gap between the keywords you bought and the searches you actually paid for is where most wasted spend lives.
Optimizing for cheap clicks. A low CPC on unqualified traffic costs more per client than an expensive click on the right search.
Using every recommendation Google suggests. The recommendations panel optimizes for spending the budget, which is not always the same as the advertiser’s interest. Some suggestions are genuinely good; they should still be evaluated one at a time.
Too many keywords, too little structure. Tight campaigns built around a small set of closely related terms are easier to write relevant ads for and easier to judge.
No geographic discipline. Check whether location targeting is set to people in your area or people interested in it, which are very different audiences.
Judging too early or too late. A campaign needs enough conversions to say anything meaningful, and for a service business with a long sales cycle that can take months.
PPC and SEO together
They are not alternatives, and the accounts that do best treat them as one program. PPC gives immediate presence on commercial searches and, more usefully, generates conversion data on which search terms actually produce business. That data is the best keyword research available for SEO, because it reflects outcomes rather than volume estimates. SEO, in turn, reduces long-term dependence on paid traffic, and a site with strong organic presence can narrow paid spend to the terms where it pays best.
A reasonable pattern for a growing business: use PPC to buy traffic on the highest-intent terms now, use what it reveals to prioritize the content and pages worth ranking for, and let organic gradually take over the terms it can hold.
Running PPC properly
Our PPC management services start with tracking that can be trusted and landing pages worth sending clicks to, because bidding decisions made on bad data are expensive. If you are spending on ads without a clear picture of cost per client, book a discovery call.
