Pay per click, or PPC, is a type of online advertising where you only pay when someone clicks your ad. The best-known example is Google Ads: you choose the searches you want to appear for, set a budget, and your ad shows at the top or bottom of the results with a small “Sponsored” label. When someone clicks through to your website, you pay for that click.

PPC is popular because it is fast, measurable and controllable. You can switch it on today, see exactly what each click costs and what it brought in, and turn it up or down whenever you like. Below we explain how PPC works in plain English, including the auction behind every ad, Quality Score, the main platforms, how to think about budgets and when PPC is the right choice.

Pay per click means you pay for visits, not views

With traditional advertising, such as a magazine advert or a billboard, you pay up front whether anyone responds or not. PPC flips that. Your ad can be shown many times for free, and you are charged when someone is interested enough to click.

That makes PPC very accountable. Combined with conversion tracking, which records actions such as form fills, calls or sales on your website, you can see:

• How much you spent
• How many clicks you received, and the average cost per click (CPC)
• How many of those clicks became enquiries or sales
• The cost of each enquiry or sale, often called cost per acquisition (CPA)

Not every campaign is charged per click. Some ad types, such as video or display ads, can be charged per thousand impressions or per view. But the term PPC is usually used for search advertising, and that is what we focus on here.

Every search runs a quick auction

Each time someone searches on Google, an auction decides which ads appear and in what order. It happens in a fraction of a second, and you never see it.

Google explains in its Ad Rank help page that your position is based on several factors, not just how much you bid:

1. Your bid, the most you are willing to pay for a click.
2. The quality of your ad and landing page, meaning how relevant and useful they are to the person searching.
3. Ad Rank thresholds, the minimum quality an ad needs to show at all.
4. The competitiveness of the auction, such as how closely matched the ads are.
5. The context of the search, including the words used, the person’s location, device and time of day.
6. The expected impact of ad assets, extra details such as phone numbers, extra links and location information.

The important point for small businesses is that the biggest budget does not automatically win. A relevant ad pointing to a helpful page can beat a bigger competitor with a lazy ad. Google also says you will usually pay less than your maximum bid, and that higher quality ads can often lead to lower costs per click.

Quality Score tells you how relevant you are

Quality Score is a rating from 1 to 10 that Google Ads gives each keyword. According to Google’s help on Quality Score, it is made up of three parts:

• Expected click-through rate: how likely people are to click your ad when it shows.
• Ad relevance: how closely your ad matches what the person searched for.
• Landing page experience: how useful and relevant your landing page is once they click.

Each part is rated “above average”, “average” or “below average” compared with other advertisers whose ads showed for the same searches over the last 90 days.

One thing that often confuses people: Google states that Quality Score itself is not an input in the auction. It is a diagnostic tool, like a warning light on a dashboard. The real-time quality signals in the auction are closely related, though, so improving the three parts above usually improves your results and your costs.

Related reading: The No-Nonsense Guide to Choosing a Pay Per Click Agency in 2026

Practical ways to improve it:

• Group closely related keywords together so each ad can match them closely
• Use the searcher’s words in your headlines
• Send people to the most relevant page, not your home page
• Make sure that page loads quickly, works well on mobile and makes the next step obvious

The main PPC platforms

Google is the biggest, but it is not the only option.

Platform	Where your ads appear	Best for
Google Ads	Google Search, Shopping, YouTube, Maps and partner websites and apps	Catching people actively searching for what you sell
Microsoft Advertising	Bing and other Microsoft search and partner sites	Extra search reach, usually with fewer competing advertisers
Meta (Facebook and Instagram)	Feeds, Stories and Reels	Reaching people by interests, location and demographics
LinkedIn Ads	LinkedIn feed and messaging	B2B targeting by job title, industry and company size
TikTok Ads	TikTok For You feed	Short video aimed at younger audiences
Amazon Ads	Amazon search results and product pages	Sellers who already list products on Amazon

The key difference is intent. On search platforms, people are looking for something right now. On social platforms, you are interrupting what they are doing, so the ad has to earn attention. Both work, but they need different creative and different expectations.

Budgets: start with what a customer is worth

There is no standard PPC cost, because you are bidding against other advertisers. A click might cost under £1 in a quiet niche and well over £10 in competitive fields such as legal or finance. The only way to know your figures is to research your keywords and run a test.

A sensible way to set a budget is to work backwards:

1. Work out what a new customer is worth to you, ideally over their lifetime, not just their first order.
2. Decide what you can afford to pay to win one.
3. Estimate your cost per click from Google’s Keyword Planner, and assume a modest share of visitors will enquire.
4. Run a test for a few weeks with enough budget to gather meaningful data, then adjust.

On Google Ads you set an average daily budget. Google’s help explains that a campaign can spend up to twice that daily amount on busy days, but over a month you will not be charged more than 30.4 times your average daily budget. Most small businesses start in the low hundreds of pounds a month and scale up once the numbers work. Agency management fees, if you use one, are on top of the ad spend that goes to the platform.

When PPC suits your business

PPC is a great fit when:

• People actively search for what you sell, such as “emergency plumber Guildford” or “buy running shoes”
• You need enquiries quickly, for example for a new business, a launch or a seasonal offer
• You have a clear, fast website that makes it easy to buy or get in touch
• You know your margins well enough to decide what a lead is worth
• You want to test which messages and offers work before investing elsewhere

It is less suited when nobody searches for your product yet, when margins are so thin that clicks cannot pay for themselves, or when your website struggles to convert visitors. In those cases social advertising, content or SEO may be a better first step. We cover this in more detail on our page about PPC for small businesses.

PPC and SEO work best together

PPC and SEO both put you in front of searchers, but they work differently. PPC is like renting a front-row spot: quick and flexible, but it stops when you stop paying. SEO is like owning the spot: slower to build, but it keeps working without a cost per click.

Many of our clients use PPC to bring in leads while SEO builds, then use what they learn from PPC, such as which keywords convert best, to shape their SEO content.

Frequently asked questions

What does PPC stand for?

PPC stands for pay per click. It is a form of online advertising where you pay each time someone clicks your ad, rather than paying for the ad to be shown.

Is PPC the same as Google Ads?

Google Ads is the biggest PPC platform, but not the only one. Microsoft Advertising, Meta, LinkedIn, TikTok and Amazon all offer pay per click options too.

How quickly does PPC work?

Ads can show within hours of a campaign being approved. Getting good results usually takes a few weeks of testing and refining keywords, ads and landing pages.

Can a small business afford PPC?

Yes. You set your own budget and can start small. The key is to target specific searches, send people to a strong landing page and track results so every pound is accountable.

Get your PPC working harder

If you want PPC that brings in real enquiries rather than just clicks, our team can set up, manage and report on your campaigns. Find out more about our Google Ads management and PPC for small businesses, or get in touch for an honest chat about whether PPC suits you.