What PPC advertising is and how it works

What PPC advertising is, in plain terms

PPC advertising is a way to show an offer to a person at the exact moment they’re searching for something similar or reading about a related topic. The ad shown is tied to what the person is doing online right now. Yandex describes this kind of advertising as a tool for working with existing demand.

A few terms you’ll need going forward. An ad is a piece of advertising material with information about a product or service and a link to a site. A keyword phrase is the words that need to appear in a search query for the ad to be eligible to show. An impression means the ad displayed on a page, and a click means the person followed it to the site or to a contacts page.

In conversation, this kind of advertising is often shortened to just «PPC» or «contextual.» Advertising tied to search queries is called search advertising: it’s a specific case of PPC. Yandex loosely splits PPC advertising into two types — search advertising and advertising on partner sites.

Why it’s called «contextual» advertising

Because whether an ad shows depends on the context — the situation the person is in. In search, the context is their query. In the ad network, it’s the topic of the page they opened, or their interests and behavior online. An ad doesn’t run the same everywhere: the system decides each time whether it fits the situation.

What PPC ads look like

In search, an ad looks like a regular result: a headline, text, the site’s address. Yandex Direct’s documentation lists what an ad can be made up of: a headline and a second headline, body text, a display link, sitelinks to sections of the site, callouts, images and video. A simple ad can consist of just text and a link; a more elaborate one can include an image or video.

A hypothetical example of a search ad for a shoe repair shop:

• headline — «Shoe repair near you»;
• text — «We replace heels, zippers and soles. No appointment needed»;
• sitelinks — «Services,» «Locations,» «Contacts.»

A label helps tell an ad apart from a regular result. Yandex adds an «Ad» label to ads placed through Direct; Yandex’s training materials state that such ads are usually marked with an «Ad» icon. The label’s look and placement change over time, so it’s more reliable to check the live search results for your own query.

How PPC advertising works

The path looks like this: a person enters a query → the system picks matching ads → runs an auction → shows the winning ads → the person clicks and lands on the site → on the site, they submit an inquiry or leave. The advertiser influences every step: choosing which queries to show for, how much they’re willing to pay, and which page to send the person to.

Queries and targeting conditions

The advertiser sets the targeting conditions. The classic approach is keyword phrases: an ad can show if they’re present in the query. The other approach is auto-targeting — a technology for showing ads without keyword phrases: the system analyzes the ad and the site’s page and decides whether the ad matches the query, the person’s interests, or the placement’s topic.

To keep an ad from showing for irrelevant queries, advertisers use negative keywords — words that will block the ad from showing. The «Search queries» report in Direct helps check which queries ads actually showed for.

It’s worth starting not from the ad account, but from understanding how to find the queries people use to search for your product.

The auction and the bid

There are fewer ad slots on a page than there are advertisers, so ads compete in an auction. The algorithms factor in how relevant the ads are and how much the advertiser is willing to pay per click. A bid is the maximum cost per click or per thousand impressions, set either manually or automatically.

In Yandex Search, ads are ranked based on the cost-per-click bid, a quality score, and a forecast CTR for each impression. CTR is the ratio of clicks to impressions. So a high bid alone doesn’t determine placement: how well the ad fits the query and how readily people click on it both matter too.

What the advertiser pays for

Yandex’s training materials put it this way: advertisers pay not for ad impressions, but for clicks on them. In Direct, some strategies let you choose to pay per conversion — for every target action on the site, such as a submitted inquiry.

How much to spend is the advertiser’s decision: a strategy lets you set conditions such as a budget or an average price. The price of a specific click is formed in the auction — more on that in the section on cost.

Automation and AI in ad platforms

Ad platforms make some decisions on their own. Direct has manual management, where you set a bid for each targeting condition, and automatic strategies, where you decide what result the strategy should target and the system adjusts the bids itself. Auto-targeting, mentioned above, picks impressions without keyword phrases.

Automation has a condition attached. For example, the «Maximum conversions» strategy requires a Yandex Metrica counter on the site and configured goals. A goal in Metrica is a visitor action the site owner cares about: visiting a specific page, clicking a button, paying for an order. Our takeaway: without configured goals, the automation has nothing to go on — it doesn’t know which clicks are valuable to you. The algorithms optimize for whatever you’ve given them, not for the business’s actual goal.

Moderation and labeling

Before it can show, an ad goes through moderation — a check against the requirements for advertising materials. An ad isn’t shown until it has fully passed moderation.

Online advertising in Russia is subject to ad labeling (Russian law). The Advertising Law requires that online ads carry an «advertisement» marker and identify the advertiser, and an authorized federal body keeps records on distributed online advertising. In Direct, Yandex, acting as the ad data operator (ORD), issues an identifier (an erid token) for each ad and adds the «Ad» label; if you run the advertising yourself, you need to provide your own details in the Direct account.

Types of PPC advertising

The Yandex Advertising Network (YAN) is a system for placing ads on Yandex’s own services and partner sites. Together with search, it accounts for the main types of PPC advertising.

Type	Where it shows	Based on what signal	When it fits
Search advertising	In Yandex Search results and on the search sites of Advertising Network partners	The person’s query: keyword phrases or auto-targeting	People are already searching for your product or a solution to their task
Advertising in the Yandex Advertising Network	On Yandex’s services, and on partner sites and apps	The page’s topic, or the person’s interests and behavior	You need to show the product to people interested in the topic who aren’t searching right now
Retargeting	In search and in the networks	The person already visited the site, for example adding an item to the cart	You need to bring back people already familiar with you
Product campaign	Ads for an online store’s products	Product data from the site, a feed, or added manually	You have a product catalog and a site with product pages

There are also dynamic ads: according to Yandex’s description, Direct’s algorithms generate them automatically for each product. The table’s last column is our own recommendation, not a rule set by the ad platform.

PPC advertising platforms

PPC ads are run through ad platforms — services where an advertiser creates ads, sets targeting conditions and tops up the budget.

Yandex Direct

Yandex’s ad platform is called Direct. Through it, ads show in Yandex Search results, on partner search sites, and in the Yandex Advertising Network. All the examples in this article are based on Direct; a detailed walkthrough of the platform itself is a separate topic.

Yandex Business

Yandex describes the Yandex Business advertising subscription as a simple tool for business owners that launches advertising automatically without complex setup. Ads show in Yandex Search and on partner sites to people who are currently searching, or have previously searched, for similar companies, products or services.

Google Ads

Google Ads is Google’s ad platform. In March 2022, Google announced that, as part of pausing advertising in Russia, it was also pausing ad display for advertisers from Russia across its platforms worldwide. Current terms for working with Google Ads, including on international markets, are worth checking in Google’s own documentation.

Who PPC advertising fits

Search advertising targets people already searching for a product or a solution to a task — Yandex calls this working with existing demand. Network advertising targets people interested in a related topic. Hence a practical rule: the channel works where demand already exists, or where interest can be tied to your offer.

The channel is usually a good fit if:

• there are search queries people use to describe your product or task;
• you need a steady flow of inquiries from the site: leads, orders, sign-ups;
• you need to quickly check whether there’s demand for a new offer;
• the site is ready to handle traffic, and the landing page answers the query behind the ad. To check this, it helps to understand what task a person is solving with their query.

It’s worth waiting, or starting with a different channel, if:

• the product is new and nobody’s searching for it yet — search advertising has nothing to show for, and it makes more sense to start with targeted advertising or content;
• there’s no page to send people to;
• there’s no way to measure the result: goals aren’t set up, inquiries aren’t tracked.

These are recommendations, not hard rules: a lot depends on the product and the niche.

PPC advertising vs. targeted advertising: what’s the difference

Targeted advertising is shown to people based on their characteristics and interests — for example, on social media — rather than in response to a specific query.

	PPC advertising	Targeted advertising
Targeting signal	The person’s query or the page’s topic	The audience’s interests and characteristics
Where it shows	In search and on the ad platform’s partner sites	Usually in social media feeds and on their ad network’s placements
Demand stage	The person is already searching or reading about the topic	The person may not be thinking about buying yet
What to prepare	Queries, ads, a landing page	An audience description, creatives, an offer for people who don’t know you yet

The line isn’t absolute: network advertising factors in a person’s interests too. A separate article on the blog covers targeted advertising.

Advertising and organic search results

Search results show paid ads alongside organic, meaning regular, results. Ad slots are allocated in an auction, while a spot among the organic results can’t be bought. Organic results are SEO’s job — the work on a site that gets it to appear in the regular search results. For more on how organic results differ from paid placements, see a separate article.

How to launch PPC advertising: the stages

Below is an overview of the stages, not a how-to for the ad account interface. It helps you estimate the amount of work before launch.

1. Goal and target actions. Decide what counts as a result: an inquiry, an order, a sign-up. Check whether this action can be tracked on the site.
2. Goals in Yandex Metrica. Set up the goals before launch: in Metrica, a goal describes a visitor action that matters to the site owner. Conversion-optimized strategies need a Metrica counter and configured goals. Check that the goal fires on a test inquiry.
3. Demand and queries. Gather the queries people use to search for the product and separate targeted ones from off-target ones. Check whether there’s demand in your region.
4. Campaign structure. Group queries by direction so you can see which part of the advertising is working. Check that each group has its own matching page on the site.
5. Ads. Write ads that answer the query. Check that the promise in the ad is backed up on the page.
6. Landing page. The page answers the query and gives a clear next step. Check the form and the contact details.
7. Budget and strategy. Decide how much you’re willing to spend to test the channel, and which result the system should optimize impressions for. Check that the budget is enough to gather data.
8. Moderation, launch and analysis. Once moderation is passed, the ads start showing. From there, you watch the data, cut off off-target queries and adjust the campaigns. Check that the search queries report and the goals in Metrica give you a clear enough picture to make decisions.

You can go through these stages yourself or with a contractor — the choice depends on your team’s time and experience. If you want to understand how a contractor builds campaigns around demand, the scope of work is described on the service page.

PPC advertising metrics

PPC advertising metrics include impression, click, cost and outcome metrics.

Metric	What it shows	Where to see it
Impressions	How many times the ad displayed on a page	Direct statistics
Clicks	How many times a person followed the ad to the site or a contacts page	Direct statistics
CTR	The ratio of clicks to impressions, as a percentage	Direct statistics
Cost per click (CPC)	The actual amount charged per click	Direct statistics
Conversion rate	The ratio of goal-completing visits to total visits	Yandex Metrica; Direct statistics when linked to goals
Cost per conversion (CPA, CPL)	Ad spend divided by the number of target actions or leads	Calculated from Direct’s spend and Metrica’s goals
ROI, ROMI	The degree to which the promotion investment pays off	Calculated from spend and revenue

There’s no universal «good» CTR or «normal» conversion rate: the numbers depend on the niche, demand, the site and the offer. Compare your metrics against your own past periods and against the business’s economics — how much you can afford to pay per lead and still have the sale be profitable.

What determines the cost of PPC advertising

The answer to «how much does PPC advertising cost» has two parts.

Ad budget. This is set by the advertiser: a strategy lets you specify a budget or an average price. The price of a specific click is set in the auction: in Yandex Search, the average cost per click is determined by the auction’s rules. It’s affected by the number of competing ads, their bids, quality and CTR.

Work on the advertising. A separate line of cost is your team’s time, or paying a specialist or a contractor: preparation, launch, management and analysis. How much work this takes depends on the task.

Direct’s Budget Forecast tool helps estimate the ad budget in advance. It calculates approximate spend and cost per click for the regions and keyword phrases you select, based on impression statistics. The documentation warns that actual spend may differ: the number of competing ads, their bids, quality and CTR all change while a campaign runs. The forecast is a guide, not a promise.

Frequently asked questions

How can you tell PPC advertising apart from regular search results?

By the label and the placement. Ads placed through Direct carry an «Ad» label, and ad blocks in Yandex Search sit above the results, in the middle, or at the bottom of the page. The label’s look can change, so check the live search results.

Can PPC advertising be launched without a site?

Direct offers this option. In Campaign Wizard, it’s enough to describe the business, and Yandex’s neural network will build a landing page with product information and contact details; ads then show in search and on Advertising Network sites. But if you plan to grow the advertising and measure results, your own page with configured goals gives you more control.

Does PPC advertising need to be labeled?

Yes. By law, online advertising must carry an «advertisement» marker and identify the advertiser. When placed through Direct, Yandex, as the ad data operator, issues tokens and adds the label; an advertiser running ads on their own needs to provide their own details in the account.

Why isn’t an ad showing?

Direct’s documentation lists many reasons. Among them: there’s no money on the account, the ad hasn’t passed moderation, the bids are too low, the campaign was stopped manually or on a schedule, or the region implied by a keyword phrase isn’t among the targeted regions. Start by checking the status of the campaign and the ads.

Does PPC advertising suit a new product that nobody’s searching for yet?

Search advertising, probably not: if there are no queries, the ad has nothing to show for. Network advertising relies on interests and page topics, so it can help introduce people to the product — much like targeted advertising. See the «Who PPC advertising fits» section for more.