What is PPC? Explain the advantages and disadvantages of using advertisements and points to use

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Pay Per Click

“What is ‘PPC’ that you often hear about in web advertising?” “I want to know more about the outline and benefits of PPC.”

I will explain about “PPC” that I often hear when it comes to talking.

Even if you know the word itself, there are many people who do not understand the detailed meaning.

Therefore, we will explain in detail the outline and types of PPC, the market price, merits and demerits, and the points of utilization.

What is PPC?

PPC is an acronym for “Pay Per Click”. It refers to a mechanism in which a fee is charged each time an ad is clicked. In Europe and the United States, it is generally called paid listing (listing advertisement), and this PPC is often used on the Internet.

A similar term is “CPC” (Cost Per Mile), but there is no conceptual difference. While CPC often refers to the cost per click in general, PPC tends to be used synonymously with the representative “listing advertisement” among them.

Types of PPC and price quotes

PPC can be broadly divided into three categories: listing ads, display ads, and SNS ads. Let’s take a look at the price and characteristics of each.

market price feature
Listing advertisement ・Monthly 1,000 yen to tens of millions of yen 

・In the case of small and medium-sized enterprises, the budget is often set at around 100,000 to 300,000 yen.

Ads displayed in conjunction with search engine search results. Ads that match the keywords searched by users can be displayed with pinpoint accuracy.
display advertising ・About 200,000 to 500,000 yen per month 

There are two types of pay-per-click and pay-per-impression

Advertisements displayed in the form of banners in advertising spaces on websites and apps. Images and videos can be used in addition to text.
SNS advertisement ・About 300,000 yen per month 

・In the case of a company with a budget, it may cost several million to tens of millions of yen

Advertisements posted on SNS platforms such as Facebook, Twitter, and Instagram. High targeting accuracy.

Listing advertisement

Listing ads are “search-linked ads”.

Ads that match the keywords that users search for appear at the top or bottom of search results. PPC, keyword ads, search word ads, and paid listings are all synonymous with listing ads.

Listing advertising costs range from 1,000 yen to tens of millions of yen, and small and medium-sized companies often budget between 100,000 yen and 300,000 yen per month. There are two pricing systems: the “click format” where you are charged for each click, and the “bid format” where the advertiser bids for the amount.

display advertising

Display ads are also called “banner ads”.

It is characterized by being displayed in a large banner format on the advertising space of websites and apps. Typical display ads include Google Ads, Yahoo! Ads, and YouTube Ads, which can appeal not only with text, but also with images and videos.

The cost of display advertising varies depending on the size of the company, but it is about 200,000 to 500,000 yen per month. In the case of Google Ads and Yahoo!

SNS advertisement

SNS ads literally refer to “display ads posted on SNS” such as Facebook and Twitter.

The feature is that it is easy to target because you enter age, gender, hobbies, etc. when you register an account. Advertisements can be delivered to target audiences accurately. In addition, SNS is highly diffusive, so it can be said to be effective in increasing awareness among potential customers.

The cost of SNS advertising is about 300,000 yen per month. Companies that use SNS as a pillar of marketing may spend millions to tens of millions of yen each month. The cost per click varies depending on the SNS platform, but it is about 24 to 200 yen per click.

3 advantages of PPC

The advantages of PPC are as follows.

  • Easy to start even for beginners (distribution stop and correction are free)
  • Pay only for clicks
  • Easy to measure advertising effectiveness

1. Easy to start even for beginners (distribution can be stopped or modified freely)

The first is that it is easy to get started even if you are new to advertising. With PPC, you can start placing ads immediately after opening an account and performing only the minimum necessary settings. You can unsubscribe, modify, and do whatever you want.

For example, you can respond flexibly, such as immediately stopping an advertisement that was not effective after placing it once, or changing the content to something that is likely to be effective.

It is recommended for those who want to try putting out an ad once, or want to make it by trial and error because the content of the ad is not fixed.

2. Pay only when you click

Second, you pay only when you click.

Since “advertisement is clicked = site is accessed”, cost is generated in proportion to the number of accesses. This means less access means less cost.

Since it is a system that costs only the amount of results, it is a risk hedge for companies with limited budgets. Display ads that use images and videos can be visually appealing to users even if they are not clicked on, and can be expected to increase recognition.

3. You can easily measure the effectiveness of your ads

Third, it is easy to measure the effect.

With PPC, you can check the number of access inflows and conversion rates. In addition to considering the results such as “What kind of effect did the advertisement have?”, reviewing the corrections will make it easier to take the next action.

What is important for selling products and services is not the number of clicks, but the “conversion rate”.

It is more cost effective to get 1 conversion in 30 clicks than 1 conversion in 100 clicks. Effectiveness measurement is effective in that you can change the advertisement while observing the current situation.

Two Disadvantages of PPC

While PPC has advantages, it also has disadvantages. In particular, the following two disadvantages should be noted.

  • The unit price varies depending on the keyword
  • In some cases, it does not lead to sales

1. The unit price varies depending on the keyword

The first is that the unit price is different for each keyword. With PPC, you can freely decide the cost per click for each keyword, but on the other hand, the cost per click is higher for popular keywords.

Since bidding is basically done in an auction, there is a lot of competition for keywords that are searched by many users and keywords that have a high closing rate. Of course, the more competition, the higher the price.

For example, let’s say the unit price for the keyword “buy tablet” is high. In that case, you can lower the unit price by changing the order of keywords such as “purchase tablet”. If you have a limited advertising budget, it’s a good idea to get middle and small words instead of big words.

2. Doesn’t necessarily lead to sales

Second, it doesn’t always lead to sales.

In order to increase sales, it is necessary not only to place advertisements, but also to make the content of the destinations attractive.

Even if the user clicks on the ad, if the content of the site is thin or the appeal is shallow, they will leave. In order to increase sales, in parallel with the operation of PPC, let’s review the contents of the sales source site and the application site.

Read Also: What is a referrer?

3 points when using PPC advertising

For PPC advertising, “how to choose” is more important than how to operate. Listing ads, display ads, SNS ads, choose the PPC ads that suit your company with the following approaches.

  • Clarify the purpose of advertising
  • Choose targeted ads
  • Choose by cost performance

1. Clarify the purpose of advertising

The first is to clarify the purpose of advertising. The purpose of advertising operations varies from company to company, such as promoting purchases of products and services, improving the company’s image, and product branding.

Listing ads are recommended if you want to promote the purchase of products and services.

However, this is based on the premise that the product is recognized in the market, so if the recognition is low, it will not be effective. In that case, it would be better to spread awareness with display ads and SNS ads first and then use listing ads.

2. Choose targeted ads

The second is choosing ads that match your targeting.

Targeting varies by ad and keyword. With listing ads, even keywords that are directly linked to purchases are effective. In the case of display ads and SNS ads, it is easy to approach potential customers.

When targeting, be sure to scrutinize your keywords. For example, if your product is a men’s hairbrush, it would be inappropriate to advertise as “hairbrush women” in the first place.

Instead of simply placing ads, try to match the characteristics of your product with the age, gender, and needs of your target audience.

3. Choose by cost performance

The third method is to choose by cost performance. PPC tends to be more cost-effective as you only pay when a user clicks on your ad.

However, there are differences between listing ads, display ads, and SNS ads.

Listing ads can approach users with high purchasing intent, but the cost per click tends to be high. Therefore, if you think in terms of cost performance, it would be better to choose display ads or SNS ads.

However, recently, it is said to be “the age of SNS”, and depending on the market and competition, the cost per click of SNS advertisements tends to be high. Let’s choose the best advertisement by comparing each characteristic, cost per click, and your company’s budget.

summary

In this article, we focused on the following points about PPC.

  • PPC is a system where you pay for each click on your ad.
  • There are different types of PPC, including listing ads, display ads, and SNS ads.
  • It is easy for beginners to start, and the advantage is that you only pay when you click.
  • Please note that the price varies depending on the keyword.
  • PPC should be selected based on purpose, target, and cost performance

In order to maximize the cost-effectiveness of PPC, it is important to set operational objectives and targets. Choose PPC advertising that suits your purpose, such as listing advertising for promoting purchases of products and services, and display advertising for increasing awareness. Please use the contents of this article for your own web advertising operations.