What is Pay Per Click Advertising?

Pay Per Click Advertising/Marketing, is where the major search engines (Google, Bing, Yahoo, etc) allow marketers to bid on particular keyword terms.  The top bidder for the keyword term, gets top placement in the PPC results (see image below)

Most PPC ads appear on the right side of & above the natural search results

These keyword bids are basically sold in a daily (even hourly) auction. You bid (set a budget) your top offer for what you want to pay for a click on your ad. Bid the highest for the day on your particular keyword term, and you have a chance of ranking number 1 in the sponsored results. Note that I said a chance. There’s also something called the quality score that can impact your ranking. More on that later in the article.

If someone clicks on your Pay Per Click advertisement, they will be forwarded through to your web site.  You are then charged the amount you bid on that keyword, for that ONE click. So, if you bid $.15 per click on ‘dallas realtor’, and that’s the highest bid for the day on that term, you’ll probably show up first in line in Pay Per Click results. If 100 people click on your PPC ad, then the search engine or PPC service will charge you $15.00 ($.15×100=$15.00).

Why PPC Advertising is NOT the Holy Grail

Pay Per Click advertising on a full time basis, can cost be very expensive. It is easy to get caught up in a bidding war over a particular keyword phrase and end up spending far more than your potential return. ‘Ego-based’ bidding, where a marketer decides they Must Be Number One no matter what, can cost thousands of dollars. Also, bid inflation consistently raises the per-click cost for highly-searched phrases.  This inflation is caused by ego-based bidding and by the search engines themselves, who impose quality restrictions on many keywords. These quality restrictions increase the cost per click even if no one else is bidding.  This is why it is very important to use a professional PPC management who can:  stay at arms length to the transaction, optimize your PPC campaigns (keywords, budgets, bids, etc.) daily for the most efficient bids possible.

If you get more traffic, you pay more money in nearly direct proportion to that traffic.  Your CPC (or cost per click) stays constant, and your overall cost increases. Compare that to search engine optimization, where you invest a fixed amount of time and/or money to achieve a better rank, and your cost per click goes down as you draw more traffic.  We suggest a balanced mix of PPC advertising and SEO (search engine optimization) of the website for better organic (free) search results.

Why PPC is Good

Pay per click advertising can generate A LOT of traffic right away. Go in with a top budget, get top placement, and potential customers will see you first. If folks are searching for the keyword phrases on which you bid and you’ve placed a well-written ad, you will get clicks the moment the ad is activated.

So PPC advertising is fast: With some systems, such as Google Adwords, you can generate targeted traffic within a few minutes of opening an account.

PPC advertising is agile: Where natural search engine marketing or other forms of advertising can lag weeks or months behind changing audience behavior, you can adjust most pay per click campaigns in hours or days. That provides unmatched ability to adjust to market conditions.

PPC can also be a bargain: Sometimes, you can find keyword ‘niches’ for which the top bid is around $.10 – in that case, PPC is a great option, because you can generate traffic to your site for a fraction of the cost of any other form of paid advertising.

So, balancing the good and the bad, where does PPC fit in? As a focused advertising tool.

The Role of PPC Advertising

Most businesses can’t afford to solely rely on PPC advertising. It is just too expensive, and bid amounts inevitably climb higher and higher. But pay per click can fill a few important roles:

• Campaign- and issue-based traffic: If you have a short-term campaign for a new product, service or special issue, pay per click can be a great way to generate buzz. You can start a pay per click campaign within, at most, 24-48 hours, and you can generally change the text of your ad in mid-campaign, so adjusting your message is easy. If you need to focus attention for a finite amount of time, PPC is perfect.
• Direct-response business: If you sell a product or offer a service that folks can purchase the moment they arrive at your web site, pay per click is a great tool. Online stores are a great example: You know that each click generated is a real potential customer, so spending money to increase the number of clicks makes sense.
• Niche terms: If you are trying to generate traffic for a highly specific keyword phrase, PPC can often provide bargains. For example, you might not want to pay the top bid for ‘bicycles’, but ‘Landshark Bicycles’ is probably a lot less expensive ($.10 per click as of this writing, actually).

The overall rule of thumb? Focus, focus, focus. Natural search engine optimization is a PR-based, long-term attempt to grow your brand and image. Pay Per Click advertising, however, should be handled like any other form of paid advertising: Gingerly, and with a clear, quantifiable short- or medium-term goal in mind. In other words, concentrate on conversions, not clicks.