When first venturing into the world of internet advertising, it is easy to be overwhelmed by all the abbreviations thrown around. Terms like “PPC advertising” is frequently used, but what does it mean, and how does ppc advertising work?

A Brief Explanation of PPC

The abbreviation “PPC” stands for the phrase “pay per click,” and it refers to pay per click advertising, a method of internet marketing in which payment is based solely on qualifying click-throughs. (Meaning the client – you – will pay only for the number of instances in which someone actually clicks on your online advertisement, and goes to your website.).

To elaborate, when you contract with a pay per click search marketing firm, you, as an advertiser, will agree on a per-click rate which you will pay for every user who clicks through from the pay per click search engine’s site (or their affiliates) to your web site.

Internet marketing experts often describe pay per click advertising as being a form of online advertising about half-way between paying per impression and paying per action. An impression (or ad view) is every instance that a user’s browser attempts to load the page that is clicked upon. (Firewalls or other filters can prevent the user from actually visiting your page – some pay per click search engines count this as an impression anyway, but others do not. – when you speak with a marketing firm, be sure to ask about this.) An action, on the other hand, is a specific result, such as filling out a contact form, or making an order. Paying per impression is riskier for the advertiser, whereas paying per action is riskier for the marketing firm, or publisher. With PPC advertising, the marketing firm doesn’t have to be concerned about sales conversions (results of actions), and the advertiser doesn’t have to worry about how many impressions (ad views) it may take to achieve a specified number of clicks (page views).

How to Use PPC Advertising

Once you have chosen to begin a PPC advertising campaign for your business, your next step is to choose an ad network, one of the pay per click search engines. You can either hire a pay per click search marketing firm to do this for you (they’ll also help you identify and bid on keywords and assist you with writing your actual ads), or you can do it yourself. Either way, it’s likely that you will be using either Google Adwords or Yahoo! Overture, which are the two largest pay per click search engines (also known as PPCSEs) operating today.

• Google Adwords: Google’s program includes a price break for those ads which are clicked on most frequently, as well as extremely stringent quality control. As the largest of the PPCSEs, it offers the most exposure as well as specific geo-targeting (so that ads are shown to the right regions), and multi-lingual support.
• Yahoo! Overture: Overture, which was purchased by Yahoo! in 2003, is also an excellent choice, as it provides top-of-page placement on Yahoo!’s pages, and also disseminates it’s listings to Alta Vista and MSN. In addition, Yahoo! Overture has human editors who read all add submissions and verify that they meet guidelines.
• Others: Other PPCSE’s include Momma.com, which is still functional, though the exposure isn’t great, and MSN which is a fairly recent arrival to the PPC party, and has limited programs.

Whichever of the pay per click search engines you select, it is important to know that most have a $100 maximum bid for each keyword, and that all are completely scalable. In theory, if you had a budget of only $5.00 / day, you could use pay per click advertising.

Selecting Keywords and Writing Ads

Finding the Right Keywords

Effective PPC advertising is dependent on having the right keywords. If you use a pay per click search marketing firm, your SEO (search engine optimization) consultant should help you define the best ones for your business; if you are representing your self, there are keyword suggestion tools provided by both Google and Yahoo!, as well as Wordtracker.com, which bills itself as “the leading keyword research tool.” As you gain experience, however, you may find that the human touch is still important, because none of these tools filter out ads that don’t attract actual customers.

Almost every SEO consultant will tell you not to get involved in bidding wars over the “perfect” keyword. Instead, you must find less obvious multiple-word phrases (generally two or three words), which may not even be listed by the keyword suggestion sites. In addition, checking the statistics for your website can also guide you, as it will show you which search phrases are already bringing traffic to your website.

Be aware, however, that every pay per click search engine has rules preventing the use of keywords that are extremely obscure, even if they may be highly profitable.

Writing the Ad

Writing ad listings for PPC campaigns can be tricky because of the limited space you are allowed to use. Basically, you need to hook a customer in 25-40 characters (not words – characters), and still be relevant. Learning to do this takes a lot of practice in overcoming the desire to use normal promotional language.

In addition, some of the search engines restrict the use of keywords – Yahoo! Overture does this – so you are not allowed to use them in the body of the ad. As well, there are restrictions against the use of superlatives (words like “best,” “fastest,” or “lowest”) and certain punctuation ($,!) is also forbidden.

Also, it’s essential to have a website (domain name) that is relevant to your produce, especially if you are including your web address (URL) in your ad.
There is a little bit more flexibility with the title of your ad, in that keywords can be used here (and, indeed, you SHOULD use keywords in your title), but character limits still apply, as does the restriction against punctuation. Good words to use in titles include attention-grabbers like “Free,” “Bonus,” and “Call Now.”

How to Tell if PPC Advertising is Working

You’ve found the perfect (for your business or product) keywords, chosen a search engine marketing firm to help you navigate the PPC advertising field, and written a stellar ad, but how can you tell if your ad being seen, and more importantly, being clicked upon. Various tracking tools exist to help analyze the traffic statistics from your ad, all of which combine to give you your ROI – return on investment. (Put more simply, ROI represents your bottom line – it’s the money you make factored against the money you spend on advertising.)

Google’s Adwords program has an integrated tracking utility called Google Analytics which reports statistics on where your traffic came from, by source page and search term, and Yahoo! Overture has its own utility as well, simply referred to as Conversion Counter.

Third party tracking tools are also available, with each offering the same core statistics. Prices vary from free (limited personal use) to about $300, and title include Mindsolve, Captools, Trackpoint.

Can Anyone Do This?

While it may seem like PPC advertising requires a formal advertising agency and a large budget, or a lot of technical know-how, the beauty of the system is that it is completely scalable. Even the largest pay per click search engines offer programs for small businesses, and all of them offer online tutorials. In fact, in order to begin a PPC advertising campaign all you need is a website and a credit card.

So, whats is your quickest way to promote your brand?