In 1998, Pay Per Click advertising (or PPC) was first introduced by Bill Gross, founder of Overture, in a concept paper at an industry convention. Later that year, management at Yahoo adopted this new concept. After seeing Yahoo’s growing PPC success, Google modified the Adwords program from a cost per impressions format to a PPC format. This was a revolutionary change which has had a profound impact on Internet Marketing. This PPC concept has expanded from search engines to popular social networking websites like Facebook.
What is Pay Per Click Marketing?
Pay Per Click Marketing is an advertising method that allows you to run classified-style advertisements on search engine results pages. The ads are delivered from a central database server. Every time any user clicks on one of the ads to visit your web site you are charged for that single click.
There are two separate, distinct types of PPC ads: context match and keyword match. Context match ads are displayed on the websites, in newsletters and HTML emails of webmasters that become ad publishers by opening an account with the search engine that allows them to display ads. Again the advertisements are matched to the appropriate keywords for the media on which they are being displayed. When a visitor to the publisher’s website or reader of the newsletter or email clicks on the ad, the publisher is paid a small percentage of what the advertiser is charged for showing the content sensitive ads. Keyword match advertisements are displayed on the results page of the search engine. The server interprets and matches what it displays in the results to the keywords the user typed into the search bar. The advertiser is billed each time a user clicks on their specific advertisements. PPC is a results driven marketing method because you are only charged if someone clicks on an advertisement and visits your website. All major search engines offer PPC advertising. The biggest players are Google Adwords, Miva, Yahoo!, Bing, Ask, LookSmart, and Baidu. In addition, other forms of PPC have sprung up including the every popular Facebook’s version.
How Pay Per Click Works for You
To get a PPC account, a seller (or webmaster, etc.) must first create an account with the search engine. This account will allow him/her to bid on keywords so s/he can place Pay Per Click advertisements. A marketer can bid on a specific keyword phrase or a single keyword. If you bid the highest amount, your ad will be the first one listed for that keyword. All search engines place paid advertisementss above and to the right of the search results. If a user clicks on any of the PPC advertisements, the advertiser will be billed for that click. This is very important to note because it is important to never reveal certain items like your website and keywords to competitors. This is due to a very dastardly practice that has emerged in competitive niches. Sometimes competitors will intentionally click on competitor advertisements to increase the competition’s costs. While this is not the case all the time, it is better to be safe than sorry.
Below, I have a breakdown of the positives and the negatives of PPC Marketing. As always, I like to get the negatives out of the way before proceeding with the positives.
The primary negatives of Pay Per Click are:
- Keywords costs range from a few pennies to more than $15 a click.
- If your ad is too general/broad you could get hundreds of curious visitors (that have no intention of buying) so you should set a spending limit for each ad while you are testing advertisements. Otherwise, you may pay a fortune for minimal results.
- Major search engines distribute a small portion of their traffic to the smaller search engines which may cause an advertiser to get duplicate traffic (a user clicks your advertisement on Google as well as Ask.com).
- Measuring the rate of return (ROR) can be slightly difficult even with the well-thought, helpful tools supplied by the major search engines.
- The greater the amount of traffic you receive, the more it costs you. This is not a problem as long as your advertisements generate a consistent, reasonable percentage of visitors who buy your product. This is why it is very important to test your advertisements with the spending limits suggested above.
The primary positives of Pay Per Click are:
- Marketers are only charged when someone clicks through to their website (unlike paying per impression advertising).
- PPC can surge immediate traffic to your website.
- PPC ads pre-qualify your visitors because users who click through to your website are already interested in your offer.
- PPC provides amazing flexibility to scale up and down as your budget dictates. You can start/stop your campaign whenever you want. Compared to other Internet Marketing traffic techniques, this is amazingly flexible.
- PPC allows an advertiser to decide the amount of money they want to spend on keyword-based advertising. The higher the bid on a keyword phrase or keyword, the greater the probability of the advertisement being on the first results page for the search engine.
Pay Per Click marketing is similar to other paid advertising methods. Any Internet Marketer should at least delve into PPC. There are many free vouchers from Facebook, Google, and Yahoo floating around the Internet to allow no cost testing of campaigns. PPC should be one of the many forms of marketing you employ, and it should primarily be used for special promotions, new products, new websites and in very narrow, selective niche markets. Pay Per Click marketing is a good starting point to quickly find the keyword phrases convert to sales. Once you know which keyword phrases or keywords make money, it is a smart idea to begin an SEO campaign and try to rank high for these phrases – free organic traffic tends to convert better, so the benefits are two things:
- Once your site is ranked high in the search engine listings, you won’t have to pay for the traffic coming to your website.
- These visitors will generally purchase at a greater rate than those visitors coming from your PPC campaigns.
SEO can be a lot of work in the early stages, but it can pay off with powerful, free traffic for years to come and should be a part of every marketer’s advertising plan. If you want more powerful PPC and SEO tips, subscribe to my newsletter, and I will show you how you can automate some of the tedious tasks and generate greater income through Internet Marketing.