Introduction to Pay Per Click Advertising

Pay per click advertising can be an effective way to drive qualified traffic to your website. Much like an auction, pay per click search engines work by allowing competitors to "bid" for the highest position on search terms. These search terms are what people in the Internet marketing biz like to call keywords. They are the words people enter into a search engine to find a product or service.

Rates for keywords vary. Niche keywords that only a few people search for at any given time may only cost a few cents per click-through for a top position. Highly contested keywords however, may set you back several dollars every time somebody clicks on them.

For example, suppose you are an online retailer who sells "organic dog food." If you wanted to get top placement for your keywords in a pay per click search engine such as Yahoo SM, you would only have to bid around $0.50. Now if you are a travel agent, and your keyword is "discount airfares," you would have to pay considerably more for top placement. It is also important to remember that rates fluctuate over time, so while a bid of $2 might give you a #1 ranking in the off season, during peak travel months, when other travel sites are vying for search engine supremacy, you may have to bid substantially higher to keep ahead of the competition. Of course, the amount that you bid is not the only factor used to determine your PPC ranking. Your click-through rate and the relevancy of your landing page also play a big part. If your competitor has a better click-through rate than you, he may be able to get a higher position even if he bids less! The PPC search engines will also reward an advertiser with a highly relevant landing page. Think about it, if you bid on discount airfares, but people arrive at a page about Caribbean cruises, the visitors are not happy. So having a relevant landing page and good ad text will allow you to bid less, and still maintain those high positions.

With pay per click search engines, you only pay when someone clicks on your link in the search engine's results page. If you bid $1 for a keyword, each time a visitor clicks through to your site, you pay $1 or less. While that might not sound like much initially, over time it can add up, especially if your website receives a sudden influx of visitors. Also, keep in mind that most engines specify a minimum amount of money to be paid before an account can be opened.

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