Pay-per-click (PPC) advertising is when an advertiser pays for each qualified
click that sends a search engine user (i.e., visitor) to the advertiserís web
page. PPC requires the advertiser to bid on key words or key word phrases
chosen by the advertiser. There are many PPC advertising services available
to choose from. Google AdWords and Overture are probably the two most popular
in use today.
The Pay Per Click search engine allows you to buy a top position in the search engine
results for the particular keyword or phrase you choose. The PPC search
engines can deliver targeted and qualified visitors to your web page at an
economical advertising cost if you manage the program carefully with a clear
objective. PPC provides the advertiser with assurance that their ad is being
delivered to the targeted audience.
Pay Per Click advertising uses a bidding process where the highest bidder or highest
activity value, depending on the search engine, for a particular keyword or
phrase will receive the top placement on the search engine results page. The
PPC search engine will place your ad text in a special location on the results
page when a user searches on your PPC keyword or phrase search term.
As an example, Google AdWords appear on the right side of the search results
page while the organic (i.e., natural) search results appear on the left side
of the page. In the case of Yahoo! Search, the sponsored ads appear on both
the left and right side of the search results page. The top 2-3 sponsored
ads appear in the top positions on the left side above the natural search
results and the next 3 sponsored ads appear at the bottom of the left side
and on the right side of the search results page along with other sponsored
Pay Per Click advertising is a good way to obtain web page visitors when you donít have
a top ranking web page to get you the necessary natural search engine placement.
Statistics show that over 80% of search engine users prefer the natural search
results as opposed to sponsored ads. Nevertheless, the search engines deliver
a huge amount of visitor traffic to the sponsored advertisers especially in the
competitive keyword markets.
The typical PPC advertising campaign is based on the bid per click. For example,
you bid $0.10 for a particular keyword or phrase that is accepted by the search
engine. Whenever a search engine user clicks on your sponsored ad then you are
charged $0.10 by the search engine. This amount is deducted from your account
funds. Your placement in the search engine results page depends on the search
engine. For Google, the placement is determined by your bid price and the adís
click-through activity. For Yahoo, the placement is determined by your bid
relative to other bids.
PPC can be an excellent method for getting visitor traffic to your web site but
it can also cost you a lot of money. You need to be extremely careful and monitor
your cost of using PPC versus the revenue generated. As the old saying goes, do
the math. Calculate your return on investment (ROI) on a continuous basis to
determine if you are making a profit on your PPC campaign.
As an example, assume your bid for a particular keyword is $0.10 and the product
you sell has a profit margin of $15 after product costs (excluding PPC costs).
If your conversion rate (the number of visitors that buy your product) is 1.0%,
only 1 of your visitors will buy your product out of 100 visitors. Your net
profit for every 100 visitors from your PPC campaign will be $5 ($15 profit
margin less $10 for PPC).
It is a good idea to experiment with the different PPC search engines to find
the one that works best for you. In addition, you need to spend the necessary
time and effort to select the keyword or keyword phrase that has a profitable
conversion rate for your specific web page. A higher conversion rate implies
more profits to you.
Try to avoid the senseless bidding war with your competitors. Seriously evaluate
whether having the number one placement position is worth the PPC price you pay.
What about position numbers two, three and so on. Will you get enough clicks in
one of those positions to make your PPC campaign a success? Do not automatically
assume that you have to be in position number one to make a lot of money using
PPC. It all comes down to experimenting and testing.
There is no such thing as the perfect PPC campaign. Evaluate the performance
of your PPC campaigns on a continuous basis. Are you leaving money on the table
by not adjusting your PPC bid to a lower level? Should you increase the bid
price to get more traffic? Is your conversion rate changing? What are your
competitors doing? Should you be considering different keywords in your campaign?
PPC advertising is a great way to get traffic but at a definite price. PPC requires
a thorough knowledge of the PPC search engines that you use and constant monitoring
and evaluation of your campaigns.
To your success!
Copyright (C) 2000 - 2007 F. Terrence Markle
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