Pay-Per-Click (PPC) advertising is quickly replacing traditional advertising for good reason—it works. But it is right for you? Before you decide, you need to know exactly what is and what it can do. So here are the answers to your top 10 questions.
1. What is it?
PPC advertising, or paid search, is a way to advertise your business on search engines, content sites like blogs, and advertising networks. You, as the advertiser, pay the host only when someone actually clicks on your ad, hence the name.
2. How does it work?
Typically PPC ads are displayed when someone does a search using one of your keywords. These ads are sometimes called sponsored links or sponsored ads and, with Google, usually appear above or to the right of the organic results on the results page.
3. Who sells this kind of advertising?
Almost every search engine provides some form of PPC advertising, but the top three are Google AdWords, Yahoo Search Marketing and MSN. There are also PPC-specific search engines, such as Overture and FindWhat.
4. What are the cost structures?
There are two primary pricing models for PPC advertising: flat-rate and bid-based.
5. What is flat-rate PPC?
With flat-rate PPC:
- You and the publishing site agree on a fixed fee
- You pay the publisher a flat rate each time someone clicks on your ad
- Prices vary depending on where on the web page/site the ad will be displayed, the value of the site’s content and the value of the keywords
Content and keywords that attract and drive more visitors usually command a higher PPC but, oftentimes, you can negotiate a lower rate if you’re willing to commit to a long-term or high-value contract.
6. What is bid-based PPC?
With bid-based PPC:
- You compete against other advertisers in a private auction hosted by the publisher for certain keywords or phrases related to your product or services
- Prices depend on many factors, including the level of competition and how often it is used in a search
- You inform the publisher of the maximum amount you’re willing to pay for a given ad spot and keyword
- The auction runs automatically and is triggered every time someone uses the keyword in a search
- Winners are determined by all the bid price, the geographical area of the searcher, and the day and time of the search
Since search engines, such as Google, usually have more than one ad spot, there can be multiple winners. The advertiser with the highest bid will often get the top spot, with the second, third and fourth highest bidders getting the second, third and fourth spots. Google AdWords, Yahoo Search Marketing, and MSN each use a bid-based cost model.
7. How do you determine the value of PPC advertising?
To help determine the value of either flat-rate or bid-based PPC, consider the potential value of a click from a given publisher, whether it’s a search engine or advertising network.
Before you settle on a publisher, ask these questions:
- How targeted is the publisher’s audience?
- What type of individuals could you expect to receive as visitors to your web site? Do you want these types of visitors?
- Where are they most likely to live? What could you gain?
- What is the short-term and long-term revenue potential?
Just as in traditional advertising, targeting a specific audience is critical for success. If you can do this with your PPC advertising, its value is potentially high.
8. Why should you consider PPC advertising for your business?
Compared to traditional advertising methods, PPC is:
- Controlled. PPC advertising is relatively simple, gives you a lot of control over your ad campaigns, and lets you reach a targeted audience very quickly.
- Trackable. With analytics, each campaign can be tracked and measured so you’ll know exactly which ones are working and which are not. Then you can make adjustments to improve performance.
- Effective. Most importantly, PPC advertising can help you generate leads. The best campaigns drive users to a special landing page where they can sign up for events, download products, or submit contact forms.
Targeted advertising with clear ROI? It’s easy to see why PPC continues to gain in popularity.
9. How do you get started?
Planning and research are the keys to an effective PPC campaign:
- Make sure you understand who your best prospective customers are, where on the Internet they’re likely to be, and what products, services or solutions they’re looking for.
- Research the keywords your targeted audience is most likely to use in their searches. Try to use two- or three-word phrases when possible. Learning which keywords work best will take time and experience.
- Take the time to write succinct, persuasive ad copy (the maximum allowed is usually 130 characters) along with a well-written landing page. Your audience will click through to this page, and if it doesn’t substantiate your offer or solution, your ad may not be allowed.
- Find the best place to advertise. Consider the audience the publisher attracts, the amount of traffic it gets, and whether any of your competitors advertise there.
10. Where can I learn more?
To learn more about PPC advertising and specific programs, visit each of the top search engine’s PPC program page:
- Google: www.adwords.google.com
- Yahoo Search Marketing: http://searchmarketing.yahoo.com/overture.php
- MSN Adcenter: www.adcenter.microsoft.com
For guidelines, standards and research, you can also visit the Internet Advertising Bureau at www.iab.net.
Pay-Per-Click advertising may be the perfect complement to your other online marketing efforts. Before you take the plunge, do some research. Find out what your competitors are doing. Talk to search engine optimization specialists. And maybe experiment with a short, simple campaign. The results could pleasantly surprise you.