What is Pay per Click Advertising?

How PPC works and what are the benefits.

Pay per click (PPC) advertising is a way to get your ads displayed at the top of search engine inquiries quickly. With PPC advertising, you can control when and where your ads appear as well as the maximum cost you're willing to spend for each click.

How does PPC work?

Pay per click search engines allow companies to bid on keywords that relate to their sites. With Yahoo! Seach Marketing, companies submit their site's descriptions and titles, along with a list of keywords to the engine. They also specify the amount of money that they're willing to spend on each keyword. After their account is processed, their results start showing up when someone searches for a keyword that the company paid for. Depending on how much money others paid, rankings for a particular keyword maybe very high or low. For example, if you choose to pay $.20 for the keyword "puppy food," while others pay only $.19, your site would rank first. If, on the other hand, you pay $.02, you may rank low.

With Google Adwords, companies start by creating an ad campaign. Within these ad campaigns, they create ad groups – each ad group specific to keywords relating to their product or service. Google Adwords lets you specify a daily budget and a maximum cost per click (the amount you pay each time a user clicks on your ad) for each keyword in a keyword-targeted Ad Group.

Keyword-targeted ads are ranked on search result pages based on their maximum cost per click (CPC) and the keyword's Quality Score on Google.com. (For the top positions above Google search results, we use the actual CPC.) Having relevant keywords and ad text, a strong click through rate, or CTR, on Google, and a high cost per click will result in a higher position for your ad. Because this ranking system rewards well-targeted, relevant ads, you can't be locked out of the top position as you would be in a ranking system based solely on price

What are the benefits?

Fundamentally, pay per click advertising is a relatively low cost method of generating increased traffic to your website. Achieving high rankings may take a long time, but with pay per click search engines people find you immediately after you set up your account. One benefit of PPC advertising is that you only pay for an ad when someone clicks on it. Other benefits include:

Highly targeted
You only reach customers looking for your services so you get the most from your budget.

Trackable
All campaigns can be tracked to the smallest detail allowing you to continually make the most from your money.

Quick to start
PPC campaigns can be started in a matter of days, allowing you reach your core audience within hours rather than days or months.

Manageable
You set the budgets allowing to manage your advertising spend effectively and to your requirements.

9 Tips to getting organized for your pay per click campaign.