What is pay per click (PPC) advertising?

Pay per click (or PPC advertising) is a method of advertising based loosely on an auction type system. In order to understand it fully, you need to understand a little bit about search engines.

Let's use XYZ search engine for example. Their search engine sends out a crawler (a.k.a. spider, robot, digger, or other unusual creature name that digs through websites), and sifts through the information on webpages. That information is sent back to the owner of the crawler (or whatever you want to call it), and the information is stored in a database (yes, it's very big, but don't distract me).

Every day, millions and millions of searches are served. With each search, the website keeps a running total of how many times a certain term is searched for. Let's pretend you wanted to know more about limburger cheese. You would search for limburger cheese. Immediately, the system queries the database looking for mention of limburger cheese in the database and where that reference came from. Then it returns the results to the searcher (which in itself is amazing since most people can find limburger cheese by following the moldy feet smell, even on the internet).

Right along side that query, the system puts a little tick mark next to that term as being searched for and by the end of the month, they have a good idea of what people on the internet are looking for, even if they are looking in all the wrong places.

This is a very rudimentary model, but you can understand the basic concept. Larger, more recent search engines use a more complicated algorithm to determine what order the search results are listed in. Make no mistake, top search engine positioning is big business. But, in frustration, many have turned to a new form of search engine placement that can guarantee their placement at the top of the list.depending on how much money they want to spend.

An advertiser will go to a pay per click site such as, but not limited to, Overture or Google AdWords. They are able to select keywords that they believe people will use to find certain products, particularly their products. They then specify how much money they are willing to spend to place their ad. If they are willing to spend the most, their ad is placed on top. If they have the second highest, they get the second highest position in the search results.

After the ad has been placed, the searchers, looking for a certain term, will see the advertisers ad and click on it. As soon as the click goes through, the amount of the bid is charged to the advertiser. Most PPC advertisers require that those who place ads also deposit a certain amount of money into their account so the amount is immediately deducted from the balance.

So what exactly does this accomplish? First of all, this allows you to be seen under keywords that you choose, thus reducing the amount of hits to your website that produce no results. Second, it sends traffic that is interested in what you are selling to your site. This raises a greater percentage of customers that are actually looking for what you are selling, whether it is a service, or a product.

Does it work? Yes, it does indeed, as long as you keep your balance in your account in the positives. In fact, if you run out of money, your ad is pulled until you place more money in your account.

This system is not fool-proof. The number of false-positives is still existent, but it is reduced since you can determine what terms are searched for. You will pay some money for the service, but in the end, the results are more sales from more accurately targeted traffic.

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Categories: Advertising,

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