Pay Per Click Advertising

Pay Per Click Advertising is simply a form of advertising where the advertiser pays a given sum per click thru from the publisher site to their site. Publishers benefit from this by receiving either the whole ppc amount, or a percentage of what the advertiser pays to the respective PPC program.

Underlying the PPC process however are 2 critical principles of operation. They’re critical, because unlike CPA or Cost Per Action, a lead doesn’t need to be generated, nor an action of any sort performed except the click itself - the end user may click through to an advertisers site, then move on, which of course is useless to the advertiser.

Another key consideration of Pay Per Click is it’s susceptability to fraud, or exploitation by third parties; after all, anyone can click on an ad irrespective of intent. In fact, where anti-fraud measures are in place, it’s not uncommon for competitors to repeatedly click on an ad to disadvantage a competing publisher !

So as can be seen, it’s necessary to have a process in place that regulates not only the audience to which ads are displayed, but employs significant anti-fraud measures to prevent advertisers and publishers from losing money.

Add to this the need to keep such an environment competitive, and you have a system with major overhead. Essentially, there are many purveyors of Pay Per Click Advertising services but few that consistently deliver. Publishers of pay per click advertising content also keep a watchful eye on these programs, and quickly drop one if its purported not to pay out as agreed, or over zealous where click fraud is concerned. Unfortunately, none of the Pay Per Click Advertisers out there disclose the means by which they arrive at a decision to declare activity fraudulent, thus many publishers feel that it’s often used as an excuse not to pay them.

Naturally, aside from making direct arrangements with a web site operator, it fits that search engines accommodate pay per click advertising in one form or another due to the highly targeted nature of the audience. If you’re selling blue widgets, and someone searches specifically for blue widgets, chances are, they want what you’re offering (whether its information or the product itself). If they search for blue widget shop, or buy blue widget, chances are they want to do just that; buy a blue widget.

Of course, you’re not the only vendor of blue Widgets out there, nor are you the only one aware of Pay Per Click advertising, so how do you compete ?

The most common model is a bidding system such as the one used by Google’s Pay Per Click advertising program Adwords. If your competitor bids 10c per click, and you bid 15c per click, your ad will likely out rank theirs (appear above theirs, or in a more prominent position). Of course, it doesn’t just come down to money.. there’s the matter of quality too !

Imagine a scenario where there are 10 ads in a column up the right hand side of a Google search results page (like this). Imagine then that these were ordered excusively by bid price. As an end user, do you defer to the most prominent ad, or click on the one that you find most engaging; most significant to your needs - remember, you just searched for something, and the ads have been mapped to your search term by their advertisers.

Naturally, you click on the one you find most appealing.. even if its the least prominent advertisement ! This is because the quality of the ad has made it appealing to you. Its specific, and describes something you’re after.

Some systems will factor this quality assessment into their pay per click advertisement rankings, and increase the cost of an ad according to its quality score. The Google Adwords Quality Score is a perfect example.

At the end of the day, this means you need to do your research and you need to know which search terms truly describe your offering. You need to know how to write ads that are engaging and encourage the user to click through. But of MOST IMPORTANCE - you need to know which keywords lead to sales. For example, I could give you a list of 10,000 keywords related to advertising, but which ones are being used by people who want to SPEND money on advertising services, ppc affiliate programs or Pay Per Click research tools (assuming thats what you’re promoting).

Pay Per Click advertising is rarely straight forward, whether you have the budget of a small nation, the IQ of the worlds smartest tactician, or the knowledge and experience of a decade in online advertising.

Research doesn’t end with setting up your campaign in Google Adwords, MSN Adcenter, or Yahoo Search Marketing either. You need to closely watch the activity, understand how to map search terms via clickthroughs to your conversions.

After a week or so of testing a variety of search terms, you will have spent a considerable sum.. but you’ll also know which keywords work for you, and which ones don’t - so be ready to spend some money to find your pay per click advertising niche. There’s always supplemental methods, such as Key Compete to see which keywords your competitors are using, and keyword research tools like Keyword Elite to drill down to the less obvious candidates, but you will still need to spend some money testing the water.

If you’re new to Pay Per Click Advertising I offer you the following observation. You know your product. You probably know your audience. Make sure you use a program that’s built for and specializes in Pay Per Click advertising.

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