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Pay Per Click- What is it? Is it Right For My Business?
January, 2009
Julie Niles

Definition of Pay Per Click (PPC) Advertising: A type of sponsored online advertising that is used on(but not limited to) search engines, where the advertiser only pays if a web user clicks on their ad. Most major search engines provide two types of search results: Organic (Natural) Listings and Sponsored Listings.

Organic listings refer to listings in a search engine results page that display in order of relevance to a specific search term. Of course the search engines themselves decide which website is more relevant than another and rank each site in the order they see appropriate. In the image at right you can see an example of organic listings for the search term 'vermont bed and breakfast'.

Sponsored Listings are Advertisements.
The advertisers pays each time their advertisement is clicked on. Where these ads are displayed is based on a number of factors that will be described later. In the image at right you can see two sections of sponsored, or PPC listings for the search term 'vermont bed and breakfast'. One section displaying along the top of the page, the other down the right hand side of the page.

Before you start a PPC campaign you should be sure you have exhausted all avenues of achieving organic listings. PPC can be extremely expensive so it is best used as a last resort when organic results aren't giving you the traffic and sales you need.

Your PPC campaign will most likely be made up of several search terms or search phrases. Each term or phrase you choose will show as a Sponsored Result when a web users searches for that phrase. For example, if you are trying to sell Fish Tanks and Supplies your pay per click campaign may contain the term 'salt water aquarium heaters'. When the term 'salt water aquarium heaters' is searched for, your ad will appear in the Sponsored Links section of the search results. The more specific the search term or phrase, the more likely you are to convert the person who clicked on your ad into a sale. You will be bidding against other advertisers for placement for each search term in your campaign.

There are several factors in which Google (or any other PPC platform) uses to determine where your ad is placed. These factors include, but are not limited to:

  • Your daily campaign budget
  • How much you are willing to spend per click (bidding cost)
  • Relevant text within the ad
  • Relevant text within the ad's landing web page
  • Popularity of your ad
  • When set-up properly, you will receive highly targeting traffic to your website.
  • You will receive exposure and branding you wouldn't otherwise receive.
  • You pay only when a visitor clicks your advertisement and goes to your website, vs. banner advertising in which usually you are charged per impression)
  • Instant gratification. If you are launching a new product or service and want immediate exposure, PPC may be a good option.
  • Ads can be tailored to target a specific audience and/or a specific geographic location.
  • PPC advertising can be very expensive
  • Tracking to be sure your advertising is working for you can be tricky
  • Time for you, your staff or a hired professional needs to be devoted to properly maintain your campaign.

If you decide to launch a PPC campaign it is essential that the proper tracking is put in place to be sure your advertising dollars are well spent. Be careful not to spend above your means. To achieve the highest ROI be sure the search terms you bid on are targeted and the landing pages are relevant and designed to make a sale.