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A 30,000 Foot Look at Pay per Click Advertising

February 11, 2011 by Dustin

Advertising in any form has the goal to attract more customers and more revenue. Like advertising on television or in print ads, the world of online advertising shares the same purpose.

pay per click A 30,000 Foot Look at Pay per Click Advertising

Basically online advertising sets out to attract customers by using the Internet, with websites and search engines as their medium. The Pay per Click (PPC) advertising model is where a host is compensated each time the promoter’s advertisement is clicked. The Cost per Click (CPC) is the actual amount that is paid out by the advertiser to either the search engine or website owner for each click that occurs. Websites that utilize this type of advertising will often present an advertisement or text link, when there is a common term between the websites keyword query and the advertiser’s keyword list. In other words, when a website has related information to the advertiser, a link will be displayed either on the side or above or in line with the website’s original content depending on the website. There are a couple different variations of pay per click online advertising which include Cost per Mille (CPM ), Cost per Visitor (CPV), Cost per Lead (CPL), Cost per Click (CPC), and Cost per Action (CPA).

When performing a search at a search engine you may have noticed that the results return with sponsored links. The sponsored links appear at the top or sides and the advertisers pay to be in these sponsored links sections. Each time a visitor accesses the site through this link, money is paid to the search engine through a prepaid account with that search engine. In order to achieve a sponsored link location websites, advertisers place bids for the amount of money they are prepared to pay per click. Since there are multiple link positions available, the highest bid is placed at the top, the next highest is placed second and so on. In addition to the websites being able to determine how much they pay per click they can also specify how much they are willing spend per day. When the maximum amount of money reserved to pay for the position is met the advertising link is removed.

The costs usually associated with pay per click advertising are priced depending on the popularity of the keywords an advertiser is bidding for. For unpopular keywords the cost may be fairly low, however with popular keywords the costs can be high due to everyone trying to bid for their position. Pay per click may get you the exposure you’re seeking but it does not guarantee sales. In the end you could potentially be paying out a lot of money without making a single sale.

People seem to have mixed emotions regarding the Pay per Click model, some say that it’s worth it and others say don’t bother! It does depend upon what you’re selling or the service you’re providing that determines if this advertising model is appropriate for your marketing strategy. For example, it could make sense to use Pay per Click if you are selling a product with a good margin and the advertising rate is affordable, and you can still make a good profit. Additionally the sites that have a reoccurring subscription or service fee associated with their service can greatly benefit from having a pay per click advertising model. These types of services will spend the money for the pay per click and continue to make money after paying for that one click until the user disables the service.

For the other people who don’t think that pay per click is worth the costs and don’t want to pay for a sponsored location your best bet is to work hard towards optimizing your website and generating traffic organically. A higher search engine rank result has the potential to gain your site similar exposure without utilizing the pay per click system. Or you may want to implement a hybrid system of optimizing your website and implementing Pay per Click, balancing your Return on Investment (ROI).

In conclusion there is no doubt that a search engine can greatly generate an increase in traffic to your website, but it might not always mean you’re going to make a sell. It’s also important to remember that if you’re going to use a pay per click advertising model make sure that it is appropriate for your business. It’s not worth it if the only one benefiting from pay per click is the PPC service provider.

Additional info:

Pay Per Click Universe

Pay Per Click Search Engines

Thanks for reading!


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