Pay Per Click, or PPC, is an online advertising term referring to the act of bidding on traffic (via a click on the ad). The bidding system itself consists of a myriad of factors and nuances, which makes it rather complicated to configure optimally.
This high level overview aims to assist in the overall understanding of the strategy's architecture and the 5 main factors to consider when running PPC campaigns.
The framework laid out below consists of five main ingredients: budget, targeting, keywords, positioning and quality score.
Because you are paying every time a user clicks on your advertisement, you must set a budget that amounts to your bid price multiplied by the number of visits you'll receive (via clicks).
Most of my clients will lay out their PPC budget for a certain period of time after their site launches. The most common time frames I'll see are 3, 6, or 12 months in advance. The budget can be further broken down month by month.
While a total budget gets identified, I typically begin helping them structure their campaigns per my recommendations. This is when we use our own benchmark data and market research to apply the necessary filters and variations on top of the campaigns themselves. One of those budget-related variables is how much to spend when, which is when we pinpoint specific days of the week and even times of day to place bids.
Since I am so heavily vested into the success of my clients' site launches, I ensure daily management of the budget. I do this by logging into the advertising platforms being used every day to confirm that my bid price is optimal and that my daily spend is averaging out to meet the monthly budget.
Managing the daily spend might seem simple in theory, but both web traffic and bid prices fluctuate on a daily basis - so it becomes increasingly important for us to stay on top of what's happening as often as possible.
Another example that highlights the need for daily ad management is the ebbs and flows of keyword quality. Some words might perform much better than others. However, the higher performing keywords might be the most expensive. If I declare those to be worthwhile, I can (and should) increase the bid for those keywords. Keep in mind, though, that by doing that, I also may need to lower my bids for other less valuable keywords.
A best practice for my clients is to house a separate PPC budget by country. That way, your budget aligns directly with the performance of a website you are marketing. As your brand targets more and more markets, you can continue to test the effectiveness of PPC by market and alter the budgets to maximize profit as needed.
When you're promoting a single language and market website, you have the luxury of setting up your ad campaigns with obvious segments in tact. For example, there is no reason to target any users outside of Russia when you are setting up a strategy targeting Russian speakers in Russia.
After several rounds of similar filtering, you result in a very specific target demographic. The more narrow your targeting, the more effective (and profitable) your ads will be. Segmenting targets correctly also allows for greater agility since it will be easier to identify pain points when your performance gets low or your spend becomes too high.
Pursuing a target also intensifies the importance of laying out an objective. What action would you like this target demographic to take? What will you measure to monitor business performance?
Measuring the effectiveness of each campaign becomes increasingly different as your performance variables diversify. In the table below, you'll see that 3 keywords are all performing in very different ways.
Keyword A has an outstanding Click-Through-Rate and Conversion Rate, but is not driving very much traffic. Keyword C, on the other hand, is driving a ton of traffic, but an educated advertiser would consider the quality of the ad and the traffic to be poor.
This exaggerated example reveals once again the emphasis I place on ongoing campaign maintenance. Not only do you have to worry about these metrics as a whole, but things become more intense when you dig deeper into the demographic segments (or user targets) that were configured.
All in all, I'm sort of using "target" in two ways. One is the demographic you choose to advertise to, and the other is the overall objective of your campaigns.
If PPC campaigns were the human body, keywords would make up its heart. They are the driving force pumping the blood to all of the levers that move throughout the process. It's the keywords that hold the value for both advertisers and searchers. They reveal the purchase intent of searchers while being the main controller of overall bid prices.
With keywords at the center of it all, a PPC campaign is structured with ad copy, landing pages, and targeting around it. That said, it's difficult to invent these other items without a clear understanding of the keywords you will be targeting.
As mentioned earlier, keywords can fall into classifications based on quality. I'll get into quality score later on since it's one of the 5 factors, but at the surface, it's extremely important to monitor whether a keyword is low, medium, or high performing at all times. Knowing this allows you to quickly pivot into finding what works best and which keywords are disposable.
If you set up campaigns that target more than one region, you'll have to keep in mind that strategies and quality scores will vary by market/target. In other words, you won't see the same correlations in metrics throughout all of your campaigns. I know this based on the many different user behaviors by market.
To put it simply, Pay-Per-Click advertising exists in order to allow for webmasters to display their sites at top positions in search engines. This, of course, gives the website more exposure in the short-term. This strategy usually accompanies a longer term way to get to the same goal, which is where search engine optimization comes into play (SEO).
This obviously makes ad positioning a pivotal part of the PPC process. You probably noticed that there can be several ads displayed at the same time on a single search engine results page (SERP). Haven't you ever wondered how that worked?
It should come as no surprise that the more competitive a keyword is, the more ads will display. This is based around common supply and demand principles since total search volume of that keyword is driving up the price of ALL available positions on the SERP. If there are more bidders, the search engine can sell the top spots at a premium and discount those that reside underneath.
So how do we, as advertisers, make sure we're positioned optimally for the keywords we've chosen to pursue?
Put simply, you must bid higher. And continue to do so. Competitors may do the same, so it often becomes a bidding war pretty quickly.
Monitoring your positioning means you must constantly assess your keywords to determine how they're performing in which position. You won't want to increase your bid on a keyword that you continue to rank first for, but you also may want to stop bidding on the ones that are sending you traffic that isn't converting.
Positions overlap most with bid price and quality score. The higher the quality score, the less you might have to spend since search engines prefer to serve more relevant ads over making a few extra pennies.
5. Quality Score
All search engines treat quality score a bit differently. Google, for example, calls ad positioning "Ad Rank." You can calculate Ad Rank by multiplying a bid price with a quality score.
Allow me to explain further.
In a nutshell, a quality score is the grade a search engine gives your ad based on some of the factors aforementioned in this post. Some others are the Click-Through-Rate, the relevance of the landing page to the chosen keyword, your brand's performance history, and more.
Other search engines around the world use other terms for quality score. Baidu identifies it as "Quality Degree" while "Quality Index" is Naver's preferred terminology. However, what doesn't change much is the way these search engines calculate the quality of an ad.
Let’s look at another table (shown below) to illustrate how quality score can impact bidding. Assume that keyword Keyword D has a quality score of 5. You place a bid of $10.00 for it and with a quality score of 20, the ad is placed in position 1. Now, let's imagine that your quality score is 10 for Keyword E. You still want your ad to remain position 1 for this keyword, so how much are you going to bid? You know that having a quality score of 20 can place the ad in position 1, so now you just need to place a $5.00 bid, or half your previous bid.
The same effect is shown for Keyword F, except in reverse. The quality score went down to 2.5 so you were forced to bid double that of Keyword D in order to fill the coveted top spot in the SERP.
It is important to note that not only does quality score influence position, but position also influences quality score. This occurs simply because a higher position usually leads to a stronger Click-Through-Rate, which a key factor in determining an ad’s quality score over time.
This high level overview on International PPC Campaigns clearly tells us how important having a dedicated resource is when pursuing such a detailed and nuanced strategy. Always be sure to keep these 5 factors in mind when setting up your PPC campaigns, and try your best to maintain the best balance between each of them.
I have assisted dozens of clients with PPC campaigns that extend throughout hundreds of target markets. Whether you're looking for some guidance on best practices or a full-time resource, I would love to help position your brand optimally across the web.