How Pay Per Click Advertising Works (& Generates Leads at Scale)

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The fast way to generate website clicks

Search engines such as Google and Bing have the potential to bring you perfect prospects. That’s because people actively searching for a product or service are ready to buy right now.

These are not tire kickers or time wasters. They know what they want, and they are shopping for the right supplier. If your business shows up high in the search results, you’re on track for success.

But how do you get to appear in the search results? In short, you have two options:

  • Search engine optimization
  • Pay-per-click advertising

Search engine optimization (SEO) is the art and science of getting your found in the free search results. Naturally, this sounds very appealing. After all, what could be better than getting quality business leads for free?

The problem is that rival companies are likely to have the same view. This makes search engine optimization a very competitive business—and an expensive one. Even if you make it to the first position in the ‘free’ results, guess what? You’re still only #5 in the search results overall.

That’s because search engines like Google reserve the top spots for pay-per-click ads. So if you want guaranteed clicks from search engine visitors, pay-per-click advertising is the way to go.

What is pay-per-click advertising?

Perform any commercial search on Google, and you are sure to see results marked ‘Ad’ at the top of the results. These are all pay-per-click advertisements.

In each case, the advertiser pays to appear high in the search results. Each time a visitor clicks an ad, the advertiser gets charged. That’s why it’s called pay per click…or PPC for short.

Pay-per-click advertising is big business. Millions of companies worldwide use this model to generate leads and acquire customers.

How does pay-per-click advertising work?

PPC advertising is powerful but can also get complicated very quickly. Here are the basics you need to get a successful campaign up and running:


Pay-per-click advertising begins with keywords. These are the phrases people type into search engines to find what they are looking for. If you are a plumber in Tacoma, you might want to be seen in the results for searches such as:

  • plumber tacoma wa
  • tacoma plumber
  • emergency plumber tacoma
  • plumber tacoma washington

To get keyword suggestions, sign up for a free ad account with Google and create a campaign. You can then explore all the keyword possibilities available. Remember to stay focused on keywords that are directly related to your business.

Create your ad

The next step is to write your advertisement. PPC ads need to be short and to the point. There’s no room for unnecessary words. You need to figure out what’s important to your potential prospects and hit those buttons hard.

Some platforms (such as Google and Bing) allow you to include ad extensions. These are additional lines that provide more information, such as:

  • Call buttons
  • Links to parts of your website
  • Location information
  • Additional text

Be sure to make the most of these as they help you stand out from the crowd.

You can also limit the geographic area where your ads are shown. For example, you can narrow it down by country, city, or even zip code.

Select your cost per click

With pay-per-click advertising, you can set a ceiling on how much you want to pay for one click to your websites. This is important because otherwise, costs quickly spiral out of control.

For some legal or insurance-related terms, costs can run into hundreds of dollars per click. That’s expensive! In most industries, the costs are lower—but still not cheap. So work out how much one click is worth to you and set your maximum bid.

You can also choose your maximum spend per day or put a limit on the whole campaign.

Enter the ad auction

Once you’ve set up everything, your ad will be submitted to the ‘ad auctions’ for your chosen keywords. Each time someone searches, a new ad auction takes place. How high you appear in the search results depends on several factors, typically including:

  • Your maximum cost per click
  • The relevance of your ad
  • The quality and relevance of your landing page
  • The ad history of your account

Together, these factors add up to create a Quality Score for your ad, usually on a scale of 1 to 10. The higher your score, the less you will typically pay per click.

If you are successful, your ads will start appearing when people search for your chosen keywords.

Managing your ads

When running PPC campaigns, it’s essential to manage your campaigns carefully. Monitor the results to see which keywords get you clicks and which need further work.

You may need to increase your bids or work on improving other aspects of your campaign. PPC campaigns are never ‘set and forget.’ You need to manage them carefully to get the best results.

At the end of the month, you will be charged for the ad costs incurred.

Pros & cons of pay-per-click advertising

There are many advantages to using the PPC advertising model:

  • Rapid results: you can receive clicks within an hour of starting your campaign
  • High profile: PPC puts you right at the top of the search results, above all the free listings
  • Total control: you have complete control over how your ad looks, where it is shown, and how much you wish to pay
  • Quality leads: PPC is bottom-of-the-funnel marketing that brings you prospects who are ready to buy

However, you do need to be aware of the potential downsides, too:

  • High costs: for competitive keywords, the cost-per-click can quickly spiral out of control
  • Management overhead: PPC campaigns need careful management on an ongoing basis
  • Possible fraud: despite protections built into most PPC systems, competitors may try clicking your ads to drain your ad budget
  • Complexity: there are many variables in PPC campaigns, requiring expertise to get the best outcomes

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PPC campaign best practices

A well-managed pay-per-click campaign can help you generate a lot of profitable new business. However, a poorly-run campaign can drain your credit card while delivering little benefit.

To help you stay in the black with PPC, here are some best practices to guide you:

  1. Clearly define your goals: understand precisely what you hope to achieve, whether it’s generating leads, appointments, or sales
  2. Research your competitors: keep abreast of rival campaigns to find out how you can differentiate your offer
  3. Conduct detailed keyword research: don’t stick with the obvious keywords; do your research to uncover all the keywords you could potentially bid on
  4. Use negative keywords: you can also specify keywords you do not want to bid on. For example, you can screen out words that attract tire-kickers (such as ‘free’ or ‘cheap’)
  5. Include a clear call to action: prospects need to be 100% clear on what they should do next
  6. Optimize your website: ensure that your site is fast, mobile-friendly, and easy to navigate
  7. Use conversion tracking: you need to understand which of your ads are working (and which are not)
  8. Make your landing page relevant: content that matches the intent of the keyword will lead to lower costs per click
  9. Keep testing: try new keywords, headlines, and calls to action to find out what works for your audience
  10. Use PPC tools: there are many great software services that can help you save money and identify new opportunities

PPC: A growing opportunity

The pay-per-click market is still growing at over 11% a year, which means there’s still a lot of potential to be uncovered.

If you’re not generating new business through PPC, you are leaving money on the table. I can help you fix that problem by connecting you with marketing partners who excel in delivering ROI from PPC campaigns.

Pay-per-click is the fastest and simplest way to generate new sales right out of the gate. Start your first campaign now, and you could have profitable new customers before the day is out.

Written By
Picture of Behdad Jamshidi
Behdad Jamshidi
Behdad Jamshidi started CJAM Marketing after realizing that most business owners don’t know how to evaluate the value of a marketing agency or assess their own needs. Since every business is different not only in their needs but where they are at in the growth process, it isn’t a one size fits all. In the past 5 years, Behdad (or Bee) has met with and assessed 800+ marketing agencies and vetted them down to a lean 100 preferred partners across all marketing niches. After pairing hundreds of businesses with the right partners, he’s found his skillset lies in the matchmaking process. Featured in MarketWatch, Bloomberg, National Post and the Financial Post, Bee’s unique background in marketing, engineering, consulting, leadership, sales and strategy, has allowed him to serve as the conduit between business owners and the marketing teams they need.
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