How does pay per click advertising work?
Written by General Seo on Aug 1st, 2011 | Filed under: Pay Per Click
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Pay per click (PPC) is an Internet advertising model used on websites, where advertisers pay their host only when their ad is clicked. With search engines, advertisers typically bid on keyword phrases relevant to their target market. Content sites commonly charge a fixed price per click rather than use a bidding system.Cost per click (CPC) is the sum paid by an advertiser to search engines and other Internet publishers for a single click on their advertisement which directs one visitor to the advertiser’s website.in contrast to the generalized portal, which seeks to drive a high volume of traffic to one site, PPC implements the so-called affiliate model, that provides purchase opportunities wherever people may be surfing. It does this by offering financial incentives (in the form of a percentage of revenue) to affiliated partner sites. The affiliates provide purchase-point click-through to the merchant. It is a pay-for-performance model: If an affiliate does not generate sales, it represents no cost to the merchant. Variations include banner exchange, pay-per-click, and revenue sharing programs.
Websites that utilize PPC ads will display an advertisement when a keyword query matches an advertiser’s keyword list, or when a content site displays relevant content. Such advertisements are called sponsored links or sponsored ads, and appear adjacent to or above organic results on search engine results pages, or anywhere a web developer chooses on a content site.[1]
Among PPC providers, Google AdWords, Yahoo! Search Marketing, and Microsoft adCenter are the three largest network operators, and all three operate under a bid-based model. Cost per click (CPC) varies depending on the search engine and the level of competition for a particular keyword.[1]
The PPC advertising model is open to abuse through click fraud, although Google and others have implemented automated systems[2] to guard against abusive clicks by competitors or corrupt web developers.[3]
There are two primary models for determining cost per click: flat-rate and bid-based. In both cases the advertiser must consider the potential value of a click from a given source. This value is based on the type of individual the advertiser is expecting to receive as a visitor to his or her website, and what the advertiser can gain from that visit, usually revenue, both in the short term as well as in the long term. As with other forms of advertising targeting is key, and factors that often play into PPC campaigns include the target’s interest (often defined by a search term they have entered into a search engine, or the content of a page that they are browsing), intent (e.g., to purchase or not), location (for geo targeting), and the day and time that they are browsing.
It’s an auction that takes place each time someone enters a search term. If you are a Chevy truck dealer and pull up page 4 for the search term "Chevy Truck Dealer" you can pay for the right to advertise on page #1 there by controlling your search engine presence to some degree.
How?
Through the use of relevant ads, keywords, and landing pages. The more relevant your ads/keywords/website, the less you pay for top position. The less you pay, the higher your ad usually winds up being. The higher your relevant ad, the more searchers see it, and trust the pay-per-click results. The more users trust the results, the more leads are generated and the more leads, the more advtisers spend on pay-per-click.
It’s in Google’s best interest to make sure only most relevant ads show in top spots and they have a very complicated way of doing this through a system they call "quality score"
Steps.
1. Create an account in Google’s adwords or Yahoo/Bings adCenter.
2. Decide which keywords are most relevant to your business
3. Decide which landing pages have the most clickable text (text you can highlight)
4. Create your ads. 25 characters for the title / 70 characters for the description
5. Make sure your display URL (35 characters) matches the domain of your landing page.
6. Create very tight ads & keyword sets (also known as ad groups) For example ….
Ad Group – Chevy Silverado
Dallas Chevy Silverados
Find the Lowest Prices on Chevy
Trucks & SUVs in Dallas, Here!
NameOfDealership.com/silverados
Keywords:
Chevy Silverado
Chevrolet Silverado
Chevy Silverado Dealer
Chevrolet Silverado Dealer
Dallas Silverado Dealer
Dallas Chevy Silverado Trucks
Chevy Silverado Dallas
Chevrolet Silverado Dallas
7. Set your bid price. I usually start at around $2.01 as my Max Bid Price and adjust it from there.
8. Set your Targeting. (I do not want to go outside the Dallas Marketing Area so I would select Dallas DMA to target my ads – Google will usually only show ads for people who enter my keywords with a Dallas IP address)
9 Set daily budget
10. Use negative keywords – Keywords you do not want to pull up for. So, in this example, I don’t want to pull up for people looking up Silverado Casino info. My Negative keyword would be Casino.
11. Monitor your quality score.
There is more to it than that, there are entire blogs, books, and hundreds of companies who do nothing but online marketing… but that’s how Pay Per Click works in a nut shell.