Introduction to Pay-Per-Click Advertsing

Posted on September 29, 2006 by Eric Hebert
Filed Under General, Pay-Per-Click Management, Internet Marketing 101 |

Sponsor: Get The Crestock Daily Free Stock Photo Here

Ever wonder how Google and Yahoo went from tiny search engines to huge media companies in just a few years? Most of their fortune lies in their pay-per-click (PPC) adverting programs, called Google AdWords and Yahoo Search Marketing Solutions.

Pioneered by a division of Yahoo known as Overture, the PPC advertising model has transformed the way we advertise business. Ever noticed that the top 3 search results in Yahoo’s search engine are always called “sponsored results” and are inside a blue box? Or how about the “sponsored ads” that run down the side of Google’s results pages? These are examples of the PPC advertising model. Let’s discuss a little bit about how they work and why they are so popular.

Let’s say we do a search on Google looking for “autographed baseball”. The results appear, along with the “sponsored results” located on the right. Now Joe, who happens to own a baseball collectables store, is one of the advertisers whose website is listed in these results. He has an agreement with Google that makes his ad appear anytime someone searches for the keywords “autographed baseball”. In return, Joe has to pay Google $1.00 anytime someone clicks on his advertisement. Thus the term “Pay-Per-Click”, because the only money Joe ever has to spend on his advertising campaign is when some searches for “autographed baseball”, sees his ad, and then clicks on it, bringing the interested customer to his website.

Now you can probably see why this advertising platform has been so wildly successful with small business owners who are on a tight budget. The search engines are bringing them people who are very interested in their product: they were actually searching for it. They only pay when someone clicks on their ad—someone who is obviously very interested in their product or service.

Pricing for PPC varies on the demand for the keyword or keyword phrase you are bidding on. A non-competitive long keyword phrase may not have any bids at all, which start at $.10. A very competitive single keyword that gets millions of searches per month can get very expensive. Proper budgeting, with many different ROI and conversion factors must be considered before putting money into a PPC campaign. And as with other forms of search marketing, competition is ever increasing and much time must be spent tweaking ads and managing campaigns.

Pay-Per-Click is evolving into other forms of advertising platforms including Pay-Per-Action and Pay-Per-Call. In the future, as television, radio, and the internet combine into a single outlet for information and entertainment, this advertising model will follow as well, possibly making it the most important advertising development in recent years. By giving small business the ability to advertise their products and services alongside large corporate companies, search marketing has created a more level playing field and at the same time increased the complexity and competitiveness of the entire marketing and advertising industry.

Share on Facebook

If you found this page useful, consider linking to it.
Simply copy and paste the code below into your web site (Ctrl+C to copy)
It will look like this: Introduction to Pay-Per-Click Advertsing

<a href="http://www.evolvor.com/2006/09/29/introduction-to-pay-per-click-advertsing/">Introduction to Pay-Per-Click Advertsing</a>

Comments

Copyright © 2007 Evolvor Music Marketing & Internet Promotion • Using a mashup of the Modernpaper theme created by Performancing