In order for ads to appear alongside the results on a search engine (commonly referred to as a Search Engine Results Page, or SERP), advertisers cannot simply pay more to ensure that their ads appear more prominently than their competitor’s ads. Instead, ads are subject to what is known as the Ad Auction, an entirely automated process that Google and other major search engines use to determine the relevance and validity of advertisements that appear on their SERPs.

As its name implies, the Ad Auction is a bidding system. This means that advertisers must bid on the terms they want to “trigger,” or display, their ads. These terms are known as keywords.

Say, for example, that your business specializes in camping equipment. A user wanting to purchase a new tent, sleeping bag, or portable stove might enter the keyword “camping equipment” into a search engine to find retailers offering these items.

Pay-per-click marketing can be a very cost-effective way to drive traffic to your website and grow your business. But it takes time and effort to do it right. A number of factors can affect your PPC costs, including:

• The relevance of the keywords you choose to bid on – Are they the search terms your best audience is really using to find products they want to buy, or solutions to their problems?
• The quality of your ads and landing pages – Google awards the best ad placements and the lowest costs to businesses that provide a good consumer experience. Your click-through rate, or CTR, is a good indication of whether or not your ad creative is resonating with people.
• A solid account structure – Your PPC account is like a house. Everything needs to be built on a strong foundation.