Paid search explained: Your 2025 guide to PPC costs, keywords, and tracking

What is paid search?

Paid search is like the Formula 1 of digital marketing: fast, powerful, and built to win if you know how to drive it.

If you’ve ever Googled something and clicked the first result (that little "Sponsored" label at the top), congrats…you’ve experienced paid search. 

But there's a lot more under the hood.

This guide breaks it all down, from how PPC actually works to how to build and optimise your own campaigns. Whether you're an eCommerce brand, a SaaS startup, or a local service business, it’s time to master the clicks that count.

Let’s break it down 👇

How paid search actually works

Let’s lift the hood on PPC (pay-per-click). 

Paid search is powered by a real-time auction system that decides when and where your ads appear.

Here’s how it works:

1. You choose keywords you want to show up for (e.g. "best project management tool").
2. You set a bid of how much you’re willing to pay for a click.
3. Google then evaluates:
   
   • Your bid amount against competitors
   • Your Quality Score (based on relevance, ad copy, landing page, etc.)
4. The algorithm calculates your Ad Rank and decides where (or if) your ad shows.

Even a lower bid can win top placement if your ad quality is high.

And that’s exactly why relevance matters.

What is Google’s Quality score?

Think of your Quality Score as Google’s trust rating for your ads.

It’s a 1-10 rating (10 being the best) that directly influences your cost per click (CPC) and your ad position (Ad Rank).

It’s not just about how much you bid, it’s about how relevant and useful your ad is to the person searching.

Google calculates your Quality Score based on three main components:

• Expected click-through rate (CTR): How likely your ad is to get clicked, based on others past performance.
• Ad relevance: How closely your ad copy matches the intent behind the user’s search. 
• Landing page experience: How useful, relevant, and user-friendly your landing page is.

A high Quality Score means:

• Lower CPCs
• Better ad placements
• Higher return on ad spend (ROAS)

If you want to beat competitors without increasing your budget, focus on improving your Quality Score through better targeting, sharper ad copy, and more relevant landing pages.

Paid search vs SEO

Let’s get one thing straight - paid search and SEO aren’t enemies.

They’re different strategies for completely different timelines.

SEO = organic…it’s the marathon.

PPC = paid, and it’s the sprint.

SEO focuses on earning traffic over time through content, links, and technical optimisations. Whereas paid search buys your way to the top instantly.

The smart approach? Use both.

Run PPC for instant data and quick conversions while SEO builds your long-term digital presence.

Why use paid search?

In a crowded digital world, paid search isn’t just helpful…it’s your shortcut to the front of the line.

If your potential customers are out there searching, PPC puts you right in their path at the exact moment they’re ready to act.

Here’s why brands both big and small lean into paid search:

• Instant visibility: Skip the SEO waiting game. Paid search puts your offer at the top of Google, sometimes within hours.
  
  
• Laser-targeted reach: Target by keyword, device, time, location, even audience behaviour. Show the right message to the right person, at the perfect time.
  
  
• Budget control: Spend what you want, when you want. Scale campaigns based on performance, or pause in a click.
  
  
• Real-time results: See what’s working and pivot fast. No more “wait and see.”
  
  
• Smarter decisions: Learn which keywords convert, what landing pages drive action, and how your users behave post-click.

If you want more traffic, more conversions, and more control, paid search is one of the fastest, most measurable ways to get it.

What makes up a paid search campaign

Think of your paid search account like a well-organised toolbox.

Each piece has a purpose, and when structured right, they work together to drive serious results.

Here’s how it all stacks up:

• Account: This is your master container and it holds all your campaigns, billing, and settings.
  
  
• Campaigns: These define your big-picture goals, like “lead generation” or “product sales” Each campaign has its own budget and settings, so it’s definitely not one size fits all.
  
  
• Ad Groups: Think of these as themes that group similar keywords and ads together for better targeting and relevance.
  
  
• Ads: The actual messages users see. These are a combination of headlines, descriptions, URLs, and ad extensions designed to grab attention, spark clicks and hopefully, conversions.
  
  
• Keywords: The search terms that you’re actually bidding on. You can choose broad, phrase, or exact match types depending on how much control you want.

Campaign structure isn’t just admin…it’s strategy.

The tighter your structure, the more relevant your ads, the higher your Quality Score, and the better your performance.

Keyword match types

Choosing the right keywords is about more than picking the most searched terms…it’s about targeting with precision. 

How you match those keywords to user searches matters a lot.

Let’s start with the three main match types:

• Broad match: Loose targeting where your ad shows for searches that relate to your keyword in any way. These are great for reach, but it can get messy.
  
• Phrase match: Gives you more control, with your ad appearing when a user’s query contains your keyword phrase in the correct order.
  
• Exact match: Offers the tightest control and only triggers when someone searches your exact keyword or close variants.

Our tip? Start narrow, then expand as you gather performance data.

Match types are all about balancing reach and relevance.

Keyword strategy for PPC

Once you’ve nailed the match types, it’s time to think about keyword intent and specificity.

Short-tail vs long-tail keywords

• Short-tail keywords are 1-2 words that are broad, and high-volume. They’re highly competitive and can be pretty expensive depending on your sector, but can bring more eyeballs. For example: “CRM software”.
• Long-tail keywords are 3+ words and are highly specific. They tend to have lower competition and higher intent. For example: “best CRM software for small businesses”.

Long-tail keywords might drive you less traffic, but they’re laser-focused.

Don’t forget negative keywords though - targeting the right users also means also excluding the wrong ones.

Negative keywords prevent your ad from showing on irrelevant or low-intent searches.

For example, if you sell premium tools, you might want to exclude terms like “free” or “cheap”.

This keeps your spend focused, your conversion rates higher, and your Quality Score healthier.

The best campaigns combine all three: smart match types, keyword length diversity, and a healthy dose of exclusion.

Google paid search ad formats

Depending on what you’re selling, who you’re targeting, and how you want users to engage, there are different formats on offer, designed to meet different goals - from visual product based ads to call-driven leads.

Let’s break down some of the core types and when to use them:

Text Ads (Search Ads) 💬

These are the bread and butter of paid search and appear as plain text ads that appear at the top or bottom of a search engine results page (SERP).

They're great for lead generation, service based businesses, B2B sales or SaaS products and work best when they are simple, targeted and intent-driven.

Shopping Ads 🛍️

We’ve all searched for products on search engines like Google, to see a horizontal row of suggestions, complete with prices, reviews and those all too prominent yellow stars ⭐

The beauty of this is with the right price point and image match, you can quickly turn a search to an ad click.

These are best for eCommerce businesses and physical product sellers.

Local Service Ads 🪛

This one involves a pay-per-lead cost model, where service based businesses (like plumbers & electricians) appear at the top of your search results with a “Google guaranteed” badge of approval.

These ads help to build credibility instantly, and the beauty is you’ll only get charged for actual leads, not just clicks.

Call-only Ads 🤙

Created for a better mobile-first experience, these are designed to drive phone calls directly from the SERP.

They are an ideal fit for businesses that see a call as more valuable than an ad click or website visit (i.e. emergency medical numbers, restaurant bookings etc) and work well as you can bypass the landing page and go straight to a conversation (or conversion).

Dynamic Search Ads 🔍

Imagine how chaotic and time consuming it would be for a wholesale product website to generate headlines and match products to landing pages, update prices and fill in keyword gaps that (let’s face it) at volume, you might not catch.

Well dynamic search ads do exactly that! They match users' search queries to relevant pages on your site, automatically generate headlines based on your pages titles and content and even choose which landing page to send users to, all in real time.

One thing to remember, more automation brings less control, so you’ll want to monitor your ads performance closely & set up exclusions for terms that you don’t want to show up for ⚠️

How much does paid search cost?

Paid search isn’t a fixed-price game.

How much you pay per click depends on a mix of factors, and knowing what drives costs helps you budget smarter and get better ROI.

Here’s what impacts your pay-per-click (PPC) costs:

• Keyword competition
• Match types
• Ad Rank & Quality Score
• Ad formats
• Device & location
• Time & seasonality

Google Ads average CPC across industries ranges from a few pence to a few pounds per click.

The key is to monitor, optimise, and adjust bids based on performance - not just set and forget.

Paid search platforms

When it comes to paid search, Google might be the first word on many a marketers lips, but it’s not the only platform you can choose from.

Depending on your audience, budget, and goals, there are some other serious contenders in town worth exploring.

Each platform comes with their own strengths, quirks, and sweet spots, so instead of picking one blindly, think of it like picking the ideal match for a first date.

Can it give you what you need? Will it understand your goals? Is it worth seeing again?

Google Ads 👑

If you’re after reach, precision, and endless tools (quite possible too many tools!) to tweak your ads performance, Google’s your classic high-performer. It’s everywhere, knows everything, and has data on everyone. What’s not to love?

🔥 Best for: Pretty much any type of business, with any type of product or service, anywhere in the world, with any budget or goal…you get where we’re going with this right?‍

👍 Pros: Not only does it come with access to YouTube, Shopping & Display (which frankly for a lot of businesses is the tipping point), but you also get MASSIVE search volume, smart automation tools and some of the deepest possible targeting.

👎 Cons: Massive volume makes for a highly competitive landscape, so unless you’re focussed, you could burn through your budget quickly. Mix that with it not necessarily being a beginner friendly tool and you might decide to look elsewhere.

If you want to learn more about Google Ads and its variety of ad types, just tap here 👈

Microsoft Ads 💼

This isn’t Bing Ads anymore - Microsoft Advertising has quietly and confidently become a smarter choice for savvy marketers looking to find reach, without some of the noise other platforms bring (cough cough…Google). With lower competition & CPC, and a more mature, desktop-based audience, it’s a hidden gem for a wide range of industries.‍

🔥 Best for: B2B sales, industries like finance & healthcare that are more “high-trust” and professional services.

👍 Pros: Lower CPCs than Google, high-quality leads and seamless Google Ads import for ease of use.

👎 Cons: Lets face it, pretty much any platform would have a smaller reach than Google, but we’ll list it as a con. It also has fewer automation tools.

Ready to up your Microsoft Ads game? Click here to learn more.

Amazon Ads 🛒

Amazon isn’t the place for window shopping, users are there to buy. With purchase intent higher than some skyscrapers in New York, and targeting built right into the shopping journeys, Amazon Ads is a must if your products (or your competitors) are on the platform…just be ready to pay for prime placement.

🔥 Best for: eCommerce brands selling on Amazon.

👍 Pros: High purchase intent and a native shopping environment that has a reported 310 million DAU (daily active users).

👎 Cons: It’s a bit of a high-walled garden, with limited insights, tight brand control and a pay-to-play model that can get costly if you don’t keep your finger on the pulse.

Niche paid search platforms

Ok, so these aren’t your typical ad platforms, but they can still add value. We’re talking about the privacy conscious DuckDuckGo users, or the sustainability focussed browsers on Ecosia - these smaller search engines offer a more aligned reach for brands with a purpose (And there's more of them than you think!).

🔥 Best for: Mission-driven brands looking for their ads to resonate with the right audience.

👍 Pros: You’ll definitely reach more unique audiences, and competition will probably be fairly low.

👎 Cons: Low competition will likely go hand in hand with a smaller reach than the more common engines, and you’ll have to accept more limited targeting and reporting tools.

⁉️ Why Meta isn’t included! Simply put, it’s technically not a search platform! Sure it knows what you like, what you clicked, and what your connections are into, but it’s not by definition paid search. If you're still sat there wondering about Meta, we've got you covered here.

Your ad platform shapes more than just placements - it defines your audience, your costs, and your conversion potential. The good news? No one said that you have to just pick one. Cast the net wide, measure ruthlessly, and double down on what delivers.

Paid search challenges

Paid search is powerful, but it doesn’t make it a silver bullet and its not immune to its own set of challenges. Let's break a few down:

• Rising costs: As industries mature and more competition enters the market, CPCs continue to increase year on year. If you’re in a niche market or a local business, you might still be able to find pockets of success (and affordability) though 💵
• Ad fatigue: Search ads definitely aren’t immune to dying a death from being seen on repeat. If your copy is starting to look stale, or your competition appears more often, your click through rate can quickly tank 🪦
• ‍Tracking complexities: Privacy laws are tightening, with GDPR and CCPA limiting data collection. Cookie depreciation is going to make it much harder to track users across devices (enter JavaScript tags like Hitprobe…a subtle mention), and iOS updates like their App Tracking Transparency have put a ring fence up around cross-platform tracking 🍪
• Automation challenges: With smart bidding and AI automations, comes "black box" data, which ultimately makes it harder to understand why something is or isn’t working 🤔

The bottom line is paid search works best when you actively manage it, optimize it regularly, and understand your numbers. Sure, platforms will send a seemingly never ending tirade of email suggestions on how they suggest you optimize with automation, but don’t forget, their main goal is ad revenue, not your ad performance.

Integrating paid search

Paid search isn’t a solo act - it thrives when it's part of an integrated strategy.

When you sync it with your other channels, you’ll get more efficient spend, smarter targeting, and faster growth. Here’s hope you can fit it into your marketing activities:

• Bottom of funnel (BOFU) brilliance: Paid search shines brightest when intent is high. If someone is already Googling “best CRM for small businesses”, they’re not just browsing, they’re all but ready to buy into some new software and all you need to do is tip the scales in your favour. BOFU is the perfect place to capture demand that already exists without your input ⚖️
• Reinforce with retargeting: Not everyone converts on the first click. Enter retargeting, the opportunity to bring back visitors who showed interest then left, with tailored keywords, dynamic copy or offers designed to hook them back in and peak their interest again 🔁
• Data that fuels the entire funnel: Search terms and conversion data doesn’t have to just live in your chosen ad platform. That data is gold for your SEO, helping you to curate specific content that you know will resonate with your audience, focus your landing page strategy, and even your product’s core messaging. Paid search shows you what people actually care about, so you can use that insight everywhere 📊

The takeaway? Think of paid search as the high-intent cog in a well-oiled machine. It performs best when it’s feeding into (and being fed by) your SEO, email, and content.

Don’t isolate it, integrate it.

Tracking events & conversions

Clicks alone don’t pay the bills.

To truly unlock paid search’s power, you need to track what users do after clicking, whether they fill a form, buy a product, or sign up for a newsletter.

Understanding the difference between conversions and events is key to how you track better.

• Events track specific user actions on your site, such as navigating to specific parts of your site, watching a demo, requesting more information.
  
• Conversions are the actions tied to your campaign goals, i.e. the end goal.

Why track conversions and events?

• It allows you to see which ads, keywords, and campaigns are actually driving revenue or leads
• You can optimise your bids and budgets toward high-value traffic
• You’ll be able to understand the full customer journey, not just individual clicks
• You can spot friction points on your site, seeing the top and bottom performing pages
• With the right software, you can spot fraudulent and invalid clicks before they cost you more, offering exclusions and risk management options built in

Tools like Google Tag Manager are a great starting point, but dedicated tools like Hitprobe take your tracking to the next level.

What makes paid search fail?

PPC can burn through your budget fast if you’re not careful.

Here’s where it often goes wrong:

• Poor targeting: Wrong keywords, wrong audience, wrong intent…it’ll just be a money pit
  
• Weak ad copy: Bland or irrelevant ads lead to low CTRs and wasted spend
  
• Bad landing pages: If users click but don’t convert, the problem usually lives here. It could be a mismatch between the ad and the landing page, confusing CTAs or just a lack of interest, but either way…your landing page needs to be as optimised as possible
  
• No tracking: Flying blind with no conversions or event data = zero optimisation. If you only know that your ads were clicked, but have no idea what happened after, you’re throwing ad spaghetti at the wall and have no idea what’s sticking
  
• Set-and-forget mindset: PPC isn’t “launch it and leave it” It demands testing, tweaking, and refining.

Great paid search campaigns don’t just focus on traffic, they obsess over relevance, experience, and ROI.

Paid search FAQs

Whether you're just getting started or scaling up, these are the questions marketers ask most about paid search.

From budgets and platforms to strategy and optimisation, here’s what you need to know:

How much does paid search cost?

It depends on your keywords, audience, and industry, but most campaigns start small and scale with performance.

How quickly will I see results?

Paid search drives traffic immediately, but real ROI comes from consistent testing and refinement.

What’s a good CTR (click-through-rate)?

2-5% is common, but it varies. Higher CTR = more relevance and better ad performance.

Do I need a big budget?

Not at all. You can get started with as little as £5–10 per day and grow from there.

Is mobile optimisation really that important?

Yes! The majority of searches happen on mobile, so your ads and landing pages have to be mobile-friendly.

What’s the difference between PPC and CPC?

PPC (pay-per-click) is the advertising model. CPC (cost per click) is the metric that tells you how much each click costs.

Can I run paid search ads without a website?

Not effectively. You need at the very least a landing page or website to send traffic to…ideally one designed to convert.

Should I use branded keywords in my campaigns?

Absolutely! Bidding on your own brand name helps you control your messaging and fend off competitors.

How do I work out my negative keywords?

Use Google Ads search term reports, and tools like SEMrush or Ubersuggest to identify irrelevant queries that waste budget.

What’s a good conversion rate for PPC?

It varies by industry, but 3-10% is a solid benchmark. Always optimise toward meaningful actions though, not just clicks.

Do PPC ads impact SEO?

No. Running PPC doesn’t directly boost SEO rankings, but the extra traffic can generate more engagement and brand searches.

Can I track phone calls as conversions?

Yes! Use call tracking tools or Google’s call extensions to measure phone-based conversions that you can attribute towards any paid ad activity.

Tips to get started with paid search

Forget the “just launch an ad” mentality, smart paid success starts here 👇

Our final word on paid search in 2025

If there’s one takeaway from this guide, it’s this:

Paid search isn’t just an ad strategy, it’s your revenue engine in 2025.

Whether you're launching your first campaign or scaling up a multi-figure funnel, success lies in precision targeting, smart keyword planning, and crystal-clear tracking.

Don’t let guesswork burn your budget.

Let data guide your decisions, let intent lead your audience, and let Hitprobe help you track every critical moment…clicks, conversions, and customer journeys.

Paid search is the move. Hitprobe makes it measurable.