PPC (pay-per-click) is an advertising model where you pay a fee each time someone clicks your ad, rather than paying a flat rate for placement. It powers the paid text ads above organic results on Google and Bing, plus shopping ads and much of paid social. The advertiser sets a budget and bid, the platform runs an auction, and payment happens only when a user clicks through.
For a local service business, PPC is a way to buy visibility while organic rankings build. It’s often the fastest lever for lead volume, but it stops producing the moment you stop paying. That’s the core trade-off against organic search, which compounds over time but takes longer to show results.
Key takeaway
PPC buys immediate, controllable traffic through an auction where cost per click depends on your bid, quality score and competition — not just how much you’re willing to spend.
How does PPC actually work?
PPC works through a real-time auction: every time a search happens, eligible advertisers’ bids and ad quality are scored together into an ad rank, and the winning ads display in that order.
Google Ads and Microsoft Advertising use a formula combining your maximum bid, expected click-through rate, ad relevance and landing page experience — together called quality score. A high quality score can beat a higher bid from a competitor with a weaker ad. You’re charged slightly more than the minimum needed to beat the advertiser ranked below you, not your full max bid.
What does PPC cost, and what drives it?
PPC cost is set by cost per click (CPC), which rises with competition for a keyword and falls as your quality score improves.
Competitive terms like
