The Ultimate Beginner’s Guide to SEO: PPC, PPM and CTR

By: Michael Cirillo   |   15 Jan 2014

When you’re new to web marketing, the acronyms are overwhelming and seemingly endless. Michael Cirillo and I are tag teaming the demystification of SEO/SEM (search engine optimization/search engine marketing) terminology in this ‘Ultimate Beginner’s Guide to SEO’ blog series.

In this post, we’ll focus on the definitions of PPC, PPM and CTR (as general media terminology, not Google-specific), and break them down side by side. (Michael shed light on the definition and meaning of ‘SEO’ in a previous post – if you missed it, it’s definitely worthwhile.)

Definitions of PPC, PPM and CTR

PPC means pay per click, referencing a type of online advertising where your company’s ad is placed on a webpage, and every time a viewer actually clicks on it, your company pays a pre-negotiated rate.

PPM means pay per mile, also sometimes referred to as PPI (pay per impression). With PPM, when a site visitor goes to a page where your ad is displayed, it automatically counts as an ‘impression,’ regardless of whether or not the visitor actually read or clicked on your ad.

CTR, or click-through rate, is the percentage of site users who clicked your ad. If your ad is static on a homepage, there were 100 visitors to the homepage, and five of those visitors clicked your ad, your campaign would have a 5% CTR. As you can imagine, the guaranteed 100% CTR of PPC campaigns holds great value because you’re only paying for users who have already expressed enough interest in your brand to act (their action = clicking on your ad to learn more).

PPC or PPM - What's Right for Your Dealership?

While online advertising campaign rates vary drastically based on the website (popular, high-traffic sites charge more money to advertise than low-traffic sites do), it’s generally the case that PPC campaigns are more expensive because they guarantee a 100% CTR. A 100% CTR typically implies higher sales conversions.

PPC campaigns tend to be lower risk than PPM, because if you run a crappy campaign with poor messaging, nobody will want to interact with your campaign by clicking on the ad, meaning you won’t get charged. Essentially, a bad PPC campaign can run for a very long time inexpensively, but obviously running a long-term campaign that negatively affects your brand just because it’s cheap is not a smart move.

If you know your market, are well-researched on your audience, and you are confident in your messaging, PPM campaigns have the potential to produce grand rewards for less dollars spent because you’re charged the same rate regardless of your campaign’s success and CTR. PPM campaigns are frequently cheaper because they don’t guarantee a high CTR – you’re on your own to produce a worthwhile ROI. If your ads are enticing enough to site users, you’ll earn a high CTR without paying top dollars – it’s all about being a smart, efficient marketer while still offering value to the consumer.

Which is right for your dealership? I won’t tell you how to spend your hard-earned dollars without knowing more about your business and doing the proper research, but what I can tell you is that investing in SEO to increase your organic search results over time will help your dealership prosper much longer than any pay-as-you-go online campaign.

[Stay tuned for future posts defining and explaining tricky important acronyms for SEO newcomers.]