What is Pay-Per-Click Advertising?
On its face, pay-per-click marketing, or PPC, ispretty simple: Search engines and services, such as Google or Overture, provide listings on a per-bid basis. This is in addition to their'natural' search results, which are still powered by a combination of keywords found on your site, link popularity and other formulae.
If you place the highest bid for a specific keyword or set of keywords, then you rank number one in these paid listings. On Google, , PPC listings show up in the Adwords column on the right-hand side of the screen. Other engines, such as MSNSearchor Yahoo, display P P C listings as 'sponsored listings' in the same column as the natural search results.
If someone clicks on your PPC listing, they arrive at your web site. And you are charged the amount you bid. So, if you bid $.15 per click on 'widgets', and that's the highest bid,you'll show up first in line. If 100 people clickon your P P C listing, then the search engine or PPC service will charge you $15.00.
Why PPC Advertising is Bad
But PPC advertising can cost a fortune. It's easy to get caught up in a bidding war over a particular keyphrase and end up spending far more than your potential return. Some PPC engines, such as Overture, offer convenience features such as 'autobid' that will automatically increase your bid amount to maintain a particular rank. That sounds great on its face, but it can get expensive in a big hurry.
Also, ROI can be very hard to measure. Some PPC engines (Adwords and Overture, specifically) provide conversion measurement tools, so that you can track whether your pay-per-click campaigns are generating the desired result. But these tracking tools aren't 100% accurate, and at the time of this writing the smaller PPC providers don't deliver any conversion tracking.
And watch out for junk traffic. Most pay-per-click services distribute a segment of their results to several search engines. While you certainly want your listing displayed on Yahoo, AOLSearch and MSN, you may not want your listings showing up and generating clicks from some of the deeper, darker corners of the Internet. The resulting traffic may look good in statistics reports but is very unlikely to generate a return.
Finally, pay-per-click advertising does not scale. If you get more traffic, you pay more money in direct proportion to that traffic - your cost per click stays constant, and your overall cost increases. Compare that to natural search engine optimization, where you invest a fixed amount of time and/or money to achieve a better rank, and your cost per click goes down as you draw more traffic.
Why PPC is Good
Pay-per-click advertising can generate traffic right away. It's simple: If you spend enough, you can get top placement, and potential customers will see you first. If folks are searching for the keyphrases on which you bid and you've placed a well-written ad, you will get clicks the moment the ad is activated.
So PPC advertising is fast: With some systems, such as Google Adwords, you can generate targeted traffic within a few minutes of opening an account.
PPC advertising is also nimble: Where naturalsearch engine marketing or other forms of advertising can lag weeks or months behind changing audience behavior, you can adjust most pay-per-click campaigns in hours or days. That provides unmatched ability to adjust to market conditions.
PPC can also be a bargain: Sometimes, you can find keyword 'niches' for which the top bid is around $.10 - in that case, PPC is a great option, because you can generate traffic to your site for a fraction of the cost of any other form of paid advertising.
So, balancing the good and the bad, where does PPC fit in? As a focused advertising tool.
The Role of PPC Advertising
Most businesses can't afford to solely rely onPPC advertising. It's too expensive, and bid amounts inevitably climb. But pay-per-click can fill a few important roles:
Campaign- and issue-based traffic: If you have a short-term campaign for a new product, service or special issue, pay-per-click can be a great way to generate buzz. You can start a pay-per-click campaign within, at most, 24-48 hours, and you can generally change the text of your ad in mid-campaign, so adjusting your message is easy. If you need to focus attention for a finite amount of time, PPC is perfect.
Direct-response business: If you sell a product or