Small Business Solutions

Pay Per Click (PPC) Marketing

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Although not a tremendous benefit for long-term website success, one of the most powerful forms of marketing is Pay Per Click or PPC. PPC advertisements are the sponsored listings that you see on Google, Yahoo and other major search engines above and usually to the right of your search results. Alternatively, you can sometimes see them within the text of articles and others areas of a website.

Pay Per Click (PPC)

PPC marketing is the “inorganic” and fast form of Search Engine Marketing (SEM) as opposed well established Search Engine Optimization (SEO). When a website is first setup, gaining web visitors (traffic) can be an issue while waiting on the periodic SE (search engine) ‘bots’ and ‘spiders’ to come and “crawl” your new site and create eventual “natural” search engine traffic. In an effort to kick-start your business, PPC can be employed either temporarily or as an adjunct to other forms of web marketing.

PPC ads can be (and, usually are) text only, but also images can be incorporated in much the same was as banner ads. Generally, you will see text-only PPC ads though. These ads are placed via a “keyword” bid process. Those will to pay for the higher ranking areas on the pay are will to pay a higher “cost per click” or CPC than others. Depending on the nature of the products or services being advertised, this can be quite costly, but also quite effective.

Webmasters or website owners can also provide the virtual real estate to host PPC advertisements. They will then gain a percentage of the click costs or sales profit in this pay-for-performance model. Also, several search marketing PPC platforms exist, the three major providers are Google Adwords, Yahoo Search Marketing and Microsoft Ad Center (Bing.)

There are two major forms of PPC: Flat-Rate PPC, Bid-Based PPC

Flat Rate PPC

In the Flat Rate PPC format, the advertiser and the website owner (a.k.a. publisher) agree on a flat rate that will be paid for each and every click received on the link being advertised. The actual sale may or may not matter. The advertiser is simply paying the publisher for every single click, regardless of results.

In the early days, of course, this led into a huge amount of “click fraud”. Clicks were illegally generated to the ads to create the appearance of actual web visitors or “traffic.” Since inception, though, there are many ways to now validate the actual traffic and click fraud is almost a non-issue if you choose a reputable publisher and they provide proof of Internet addresses and origination.

Bid Based PPC

The more common form of pay per click advertising is the bid-based model. Here, the publisher either has an in-house automated advertising auction engine or has the service outsourced to an ad network and each advertiser bids for certain keyword phrases to attain the best positioning within the publisher’s website.

Many times advertising with a large budget may create a tie in the bidding process. The ad networks generally have then put the winnings bid though a “quality” check and advertisement with the highest quality score wins the spot. (Quality score is usually factored by checking for ad relevancy, minimal page loading time and better landing page appearance, as well as a few other aspects.)

“Guaranteed Page 1 Search Engine Results”

As further discussed in our Search Engine Optimization (SEO) pages, gaining top placement on the Search Engine Results Pages (SERPs) is the number one objective of natural search engine placement. Similarly, within PPC, the number one sponsored ad slot is also the highly sought position. This top ranking, of course, receives far more visitor clicks than any other.

There are many misleading advertisements on the Internet about being “Ranked on Page 1” of a Google SERP. The novice marketer would easily think that this means a natural search, when it usually is done via the pay per click method. And, because the bid based method is usually employed, the advertiser making these “guaranteed” claims can say that they can get that number 1 ranking slot. The client simply has to pay top position prices (out-bidding all others) and these costs are then passed on to the client.

Keywords and the Importance of Keyword Research

As with eBay, the bid auction system of keyword bidding for these top slots can be extremely competitive. Depending on the niche, such as “insurance”, the pricing to outbid all others can be astronomical. The insurance companies may pay $10 to $15 PER CLICK to gain that top ranking sponsored ad slot.

Thusly, many advertisers or affiliate that gain a commission per sale have gone to longer keyword phrases known as “long-tail keywords” such as “cheap auto insurance” or “inexpensive car insurance”. (Although, realistically a grouping of words is literally a phrase, these are still known as one single keyword in many, but not all arenas.) These long-tail keywords are generally more profitable, but do require knowledge and “keyword research” to be effective and profitable. Additionally, even longer tail keywords are used and employed when circumstances warrant.

Keyword research is a huge market in and of itself. Creating a list of profitable keywords that are accompanied by decent search volume statistics and proven conversions (ratio of clicks to sales) is nearly an art-form and a highly sought talent. Keyword lists and their statistics are often bought and sold on the Internet daily. It can take years to learn proper keyword research skills that are proven and provide results that can be tracked effectively.

The Cost of a PPC Campaign

Again, referring to the insurance industry, if the company is able to pay even as low as $10 per click and the affiliate or insurance marketing manager implements a PPC campaign with one of the top PPC networks, they might easily gain 5-10,000 clicks per month, resulting in a $100,000 advertising campaign via pay per click alone. Novice PPC advertisers commonly lose major amounts of money in this highly competitive market strategy. PPC is not something to be taken lightly and research and testing is crucial to success.

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