Pay-Per-Click Advertising – What you need to know.

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What is pay-per-click advertising and why should you be interested?

If you’ve stumbled upon this page then you’ve probably at least heard of the phrase Pay-Per-Click, and are looking for a little bit more information on how it’s used and why it might be important to your business.

The best way to do this is to begin at the start, defining it and then tackling how it can be helpful but also how it could be harmful.

What is pay-per-click?

Pay-Per-Click also referred to as PPC, is an advertising method in which a company purchases space on a website and pays a small sum of money to that host site each time a user clicks its ad. Typically these ads are purchased at auction. Companies bid on keywords and phrases, this bid price is what will be paid each time a user clicks on your link. For example, if you bid $2 per click, and you have 300 visits to your site, you will owe the host site $600.

The most popular way businesses utilize PPC is by purchasing a listing in search results on search engines like Google and Bing. I’m sure you’ve seen search results like these:

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Have you ever noticed that the first sites to be listed are accompanied by a small green box that reads Ad? These pop up because these companies have purchased this “advertising” space and the search engine is sponsoring their site.

What is the goal of pay-per-click advertising?

You might still be asking yourself, why would I want to use PPC advertising?

The answer is simple, to generate more traffic to your site. If you bid enough to get top placement, consumers, when searching for your keywords, will see your site first. Being at the top of the list of thousands of other sites trying to answer your same question, or sell your same product will make it more likely for your company gets the most visits and purchases. Returning to our previous example, if your PPC was, again, $2 per visit, but the customer spends $400 while on your site, then you’ve made an easy profit.

Pay-per-click advertising is also very quick. By this we mean, after the auction your site will begin generating targeted traffic within just a few minutes. The more of your target audience reaching your site, the more likely you are to gain larger profits.

What are the dangers of PPC?

One of the biggest dangers you will face when trying to engage in pay-per-click advertising is your own ego. Costs can run up extremely quickly because of the auction set up. During an auction, it is very easy to lose sight of your initial PPC budget and end up spending much more than you had initially planned.

When it comes to bidding there is always the risk of letting the excitement of ‘competition’ and the need to win get the best of you. It is imperative to always keep in mind the advertising budget your company has cultivated, otherwise, you may end up allowing yourself spend more on a bid than is feasible for the company to pay off.