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PPC Advertising:

Means “Pay per Click”, a popular method of online advertisement and generating traffic to a website . The basic concept is that the advertiser has his ad displayed on websites or search engines and pays the website owner or search engine (the publishers of the ad) only when a visitor clicks on his ad. The ads are linked to the advertiser’s website and a click directs the visitor there.

The most popular form of PPC is Google AdWords followed by Yahoo Search Marketing and their respective outfits to export it’s ads to outside websites, Google AdSense and Yahoo Publisher Network. There are other platforms for PPC advertisement as well like search engines which exclusively display PPC ads. Also see under contextual advertising for other PPC versions.


PPC Advertising

PPC ads for the keyword “PPC” on Yahoo Search Marketing. These ads are also referred to as “sponsored ads” or, like here on Yahoo!, “sponsored (search) results”.

In a PPC campaign on search engines the advertisers bid on keyword s relating to their offer so their ad appears on the search results pages when a user searches for this keyword. Bid in this case means, that when the advertiser sets up his PPC campaign he announces the maximum price he is willing to pay to the publisher for one user click.

The maximum bid and hence the max price an advertiser has to pay for a click (depending on certain factors the ad publisher might charge less than that) depends on the following factors:

  • The number of competitor advertisers for this keyword. For example there are no sponsored ads for the keyword “reed” and therefore if one wanted to run a PPC campaign for some reed related product or info site one could get away with the lowest possible bid (5 ct for most PPC publishers). For the keyword “mortgage”, however, there are far more than 100 different PPC campaigns which would require a max bid of several dollars to have one’s ad displayed in a prominent position.

  • The relative position to the other ads. A rough rule is that the number of clicks on sponsored ads are proportional to their position. The top ad gets the most clicks. Lower placed ads correspondingly lesser clicks. Ads which do not make it on the first result page are hardly clicked at all because only a small percentage of search engine users bother to check the second or further pages. Therefore an advertiser who wants his ad ranked at the top has to bid more than all the other advertisers for this keyword. Google’s system varies quite a bit in this direction. See under Google AdWords for more information.

Google, Yahoo! and MSN have the best established PPC networks. Aside from these there are many search engines like Miva or Enhance which specialize on PPC advertising, that is, when you search for a keyword you get only sponsored results and no organic listings. As these search engines have much less traffic than the big ones competition is of course lower and therefore the bid prices, too. When in AdWords you have to bid $1 or more to gain a good position for a medium competitive keyword you might get #1 position on Miva for 5 cents or less. But to shift your campaign from Google or Yahoo to other PPC search engines because clicks are cheaper might still not make it viable. The traffic might be too low and the percentage of click fraud is generally higher.

The biggest advantage of PPC advertising is that you can generate virtually instant traffic to a website immediately after it was first published. It takes only a few minutes to set up a PPC campaign – providing the advertiser has some conversance with the procedure – and your ad can be published right after the setup process is completed (this holds true for Google AdWords. Yahoo and MSN reserve their right to have the ad checked by an editor before it goes live). Other methods of traffic generation like SEO measures or a strategy of building links to the site from many other sites can cost a lot of time, work and money.

The biggest disadvantagecan be that if you don’t have the know how on how to set up and run a profitable PPC campaign, you might lose a lot of money within a very short time. According to studies only 5% of the advertisers make more money than they spend for the campaign. And many a PPC newbie was shocked when he checked his campaign statistics after a couple of days and found out that he had to spend several hundred if not thousand dollars for his clicks but that the number of sales was far to less to let him compensate his ad spendings.

Therefore a word of warning: Before starting a PPC campaign make sure to be well educated in the areas of:

  • targeting the right keywords

  • writing good headlines and ad copy

  • creating a highly converting sales copy on your landing page

  • testing and tweaking the ads to constantly improve conversion rates

If you are not good in these things then it is recommended that you either learn it first or hire an expert who can set up a campaign for you.

Pay comes from Latin pacare = to please, satisfy, pacify and is akin to peace (Latin pax );

Click is imitative, that means the word is imitating the sound of the action it is supposed to describe]




Recommended Resources:

  • The Ultimate Guide to Google AdWords written by Perry Marshall, generally known as the AdWords expert (you can watch a 2 hrs marketing lecture by him here ).

  • AdWords180 , a very recommended ebook with information on how to deal with the infamous Google Slap and how to structure campaigns to achieve CPCs of 1ct ($0.01!)

  • Affiliate Radar  is a membership site for PPC advertisers which provides almost everything needed to setup and run a profitable campaign, especially the all important tracking of individual keywords. This feature allows for identifying the profitable keywords and deleting the unprofitable from the campaign.

  • The Landing Page System . Similar but less features than Affiliate Radar. The 2 main differences: 1) it is not a membership but a script hosted on a server. Therefore only a one time expense. 2) It allows dynamic keyword adjustment on the landing page according to the user’s search phrase. This is a real conversion booster.

  • AdSpyPro  is a program which helps to find the profitable keywords before starting a PPC campaign. This way one doesn’t have to spend money on unprofitable keywords just to find out after a while one loses money on them (note: there was a lot of hype  about the release of this and two similar spy tools mid 2007. Some marketers do well with them and some don’t. Before purchasing or using such a tool it is recommended that you first check this free report)


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