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What is Pay-Per- Click?

Basically, Pay-Per-Click (PPC) is a type of online advertising in which you pay to have your ad listed on the major Internet search engines. When you do an Internet search, in addition to the “regular” listings you will see these ads elsewhere on the page – sometimes on the right hand side and/or at the top. They are alternately called Paid Listings, Sponsored Links, Sponsored Listings, or Featured Listings. Ultimately, no matter what they’re called, they’re paid ads.

The beauty of these ads is that they’re relevant to whatever a person did an Internet search for. Well, that’s one part of the beauty. The other part is that the advertiser does not pay anything for the ad unless a user clicks on it. This makes the advertising both affordable and easily trackable.

How does PPC work? A business owner bids on search keywords that are relevant to her business. For example, if she had a painting contractor business in the San Jose neighborhood, a set of keywords such as “painter”, “painting contractor ”,“ interior painter” and “exterior painter” obviously would make sense for her. Depending on whether she focused on high end or discount products, she could also include such terms as “high-end,” “elite” or “premium” – or on the other end of the spectrum, “value,” “discount,” “affordable,” “clearance,” etc.

Depending on how many painting contractors there are in the San Jose neighborhood – mind you, this is a purely hypothetical example – the owner might want to position her business in a way most likely to get clicks. This happens through an open bidding system. Advertisers bid to be listed, and the bid amount is paid by the advertiser when a visitor clicks on the ad.

Pay-Per-Click-AdvertisingDoes this mean the business owner who paid the most for those keywords will get the best ad placement? Theoretically, yes. However, some search engines, such as Google – whose “Google AdWords” is the most popular PPC system online – have added some more factors that expand upon the bid amount.

PPC Advantages

  1. Virtually instant traffic to your advertisements
    • You can have ads on the front pages of and Google, Bing, Yahoo! in just 20 minutes
  2. A world of options print Yellow Pages can’t provide
    • You can use text-based ads, streaming video ads, banner ads and more
    • You can advertise to a targeted audience in minutes
    • You are rewarded for creating good ads with lower ad costs
  3. Laser Targeting
    • You only advertise to people who are looking right now for what you’re offering
    • You can quickly test to determine which ads bring you qualified traffic
    • It’s easy to monitor which keywords bring visitors who actually convert into customers and which do not – then you can easily alter your ad to include the highest-converting keywords.
  4. Local/Regional Targeting
    • Target users by location, allowing you to specifically reach local customers
    • Reach a worldwide audience, target your local area, or do both.
    • You can choose where and when you want your ads to be visible
  5. Cost-effectiveness
    • Pay only when a customer clicks on your ad
    • You benefit from free branding even if people don’t click on your ad
    • You determine your costs based on your own objectives – specify exactly how much you want to spend, and even set a maximum daily and/or monthly budget
  6. Powerful Money-Making Tool
    • If you could spend a dollar to make two dollars, how many dollars would you spend? That’s exactly how a well-optimized PPC campaign works.
  7. Measurable Results
    • Real time Return-On-Investment data using conversion tracking data
    • Every aspect of the process is trackable
    • Google collects and analyzes all key data for you and will auto-send you reports

PPC Disadvantages

  1. Only through paying the advertising cost will you be able to determine the Return On Investment (ROI) of various ads
  2. Every new visitor costs money – While you could get some return visitors who bookmark your site, in general when you stop paying the visitors stop coming
  3. Having your ads link to a high-converting site is a must – a good PPC campaign can drive lots of targeted traffic to your site, but if that site doesn’t turn visitors into customers, it’s wasted money
    • (Note: A good web marketing company can help to optimize your site to greatly improve your conversion rate)

In summary, Pay-Per-Click advertising is excellent for obtaining traffic immediately. PPC can be a powerful, cost-effective, and profitable advertising method.

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