How PPC (Pay Per Click) Advertising Works

How PPC (Pay Per Click) Advertising Works.

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How PPC (Pay Per Click) Advertising Works

PPC advertising is simply advertising your website through the use of the pay-per-click search engines. To grasp an understanding of ppc advertising, you need to understand what a pay-per-click search engine is if you don't know already.
A pay-per-click search engine is basically a search engine that takes the guesswork out of getting top-ranking in a search engine and in effect, enables you to buy your rank so to speak.
When using a ppc search engine you bid on keywords or keyword phrases that your targeted prospects may use to find whatever your website offers. When you outbid competitors that have bid on the same keyword or keyword phrase, your website will be ranked over theirs.
Because you "pay-per-click", you only get charged your bid amount for actual visits to your site that result from your ppc advertising rather than being charged a flat fee for placing an ad.
Some pay-per-click search engine services, like Yahoo! Search Marketing for instance, only consider the bid amount in ranking a site. Others, like Google Adwords, may also consider the popularity of an ad based on click through rates in ranking a website.
For the purpose of ppc advertising, this is really a good thing because it enables those with relevant products or services to achieve a decent ranking even if they don't have an enormous ppc advertising budget. It is also good for those using the search engines to find information because relevant, popular ppc advertisements will appear in their search results.
The most popular ppc advertising options include Google Adwords and Yahoo! Search Marketing (formerly known as Overture). Google because it is the most widely used search engine and Yahoo! Search Marketing because it provides listings in several search engines including Yahoo!, MSN, Alta Vista, and Netscape as well as others.
The first step to designing an effective and profitable ppc advertising campaign is to determine your budget. Budgeting for ppc advertising involves not only determining how much money you can spend on your ppc advertising campaign, but basing that on the monetary value of a click to your website since you are paying per click.
Throughout your ppc advertising campaign you must monitor it to be sure that you are getting a good return on your investment.
Your conversion rate, the number of unique visitors divided by the number of sales, plays an important role in determining the value of a click to your site for ppc advertising budgeting purposes as does the average net profit per sale. By dividing your net profit per sale by your conversion rate, you can accurately determine the value per click to your website.
The price per click that you pay for your ppc advertising should not exceed this value. If it does, you will be spending too much on your ppc advertising and you won't get any return on your investment.
Of course, it is ideal to pay less than the value per click so that your ppc advertising will generate profit rather than eating up your revenues. To boost conversion rates it is vital that you use relevant keywords that will put your site in front of those most interested in what you are offering.
However, if the bids on a choice keyword are too high, a little brainstorming combined with a keyword analysis through Wordtracker will give you additional ideas for keywords for your ppc advertising that have lower bids on them and may be just as effective. You may also get some ideas for keywords by looking at your competitors' source code to see what they are using.
Reports from your ppc advertising provider will help you to monitor your ppc advertising. Also, the information provided through web logs will tell you where your traffic is coming from so you can determine which ppc advertising bids are performing the best. If you approach ppc advertising logically and monitor it regularly making adjustments as needed, ppc advertising is a powerful tool for profitably driving traffic your website.

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Serge Daudelin

Affordable Search Engine Optimization

Serge Daudelin is a Search Engine Optimization Specialist who has written over 300 articles in print and 5 published ebooks. Serge is dedicated to helping others and offering the best information on how to make more money online.

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