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What is Pay Per Click?

Pay Per Click, or PPC,
is an advertising technique used on websites, advertising networks, and search engines.

With search engines, pay per click advertisements are usually text ads placed near search results; when a site visitor clicks on the advertisement, the advertiser is charged a small amount. Variants include pay for placement and pay for ranking. Pay per click is also sometimes known as Cost Per Click (CPC). While many companies exist in this space, Google AdWords and Yahoo! Search Marketing, which was formerly Overture, are the largest network operators as of 2006. MSN has started beta testing with their own PPC services MSN adCenter. Depending on the search engine, minimum prices per click start at US$0.01 (up to US$0.50). Very popular search terms can cost much more on popular engines. Abuse of the pay per click model can result in click fraud.*
*Courtesy of Wikipedia, the free encyclopedia

More about Pay for Click;

There are several ways to go about attracting valuable traffic to your website. Read More...

Pay-Per-Click is one of the options you can choose from,
along with developing an SEO, or search engine optimization campaign. Both pay-per-click and SEO are targeted to get your website placed as close to the top of search engine results as possible. One of the differences is that it takes minutes to set up a pay-per-click campaign versus months for a good SEO campaign. Read More...

Be aware that the most popular keywords often cost considerably more than 50 cents a click. Pay Per Click
Popular keywords can cost as much as $20 to $30 dollars per click. So 2,500 hits at $20.00 per click would cost $50,000 not a good deal if your only realizing a profit of $5.000. The only way around this is to bid less for these key words or you will be paying more than your budget can afford for each individual hit. Another element of pay-per-click advertising is that you constantly monitor your bid. Read More...

More on Pay-Per-Click
While Pay-per-click programs offer many advantages they also have their unique disadvantages including but not limited to the following: Read More...

What is Pay click? Continued...

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Pay-Per-Click is one of the options you can choose from
The downside is that pay-per-click is essentially a bidding war. A higher bid than yours will lower your position on search engine results. This means that you will have to raise your bid to regain your position - which can obviously become quite expensive, especially if you are bidding on a popular keyword. Needless to say this will quickly gobble up your advertising budget.

In order to determine if pay-per-click is a cost effective form of marketing for your business, you must do some computing to figure out how much each visitor to your site is worth. You can compute this value by dividing the profit your website made over a given period of time by the total number of visitors during that period. The basic formula is profits divided by visitors. For example, if your business made $5,000 in profits and there were 2,5000 hits, in theory each visitor would be worth 50cents. However at fifty cents per visitor your business will just break even. Of course you need to show a profit, not just cover costs. To that end you need to aim at a figure less than 50 cents per click.

Be aware that the most popular keywords often cost considerably more than 50 cents a click. (Continued...)
It is very important that you bear in mind that the results of the top search engines providing pay-per-click advertising, which are Overture and Adwords Select, usually appear on other popular search engines. Because the competition for top ranking is intense very often you will find that the bidding price balloons too high for pay-per-click to yield a profit.

When this happens, you should withdraw your bid on that particular keyword and try another one. When you pay too much per click to make a profit, you are in actually losing the bidding war.

Losing is not acceptable, so you need to have a plan in place to closely track the effectiveness of your keyword. You should monitor your keywords at the very least on a monthly basis.

In addition to careful monitoring, the analysis of visitor behavior is equally as important. Such analysis can yield invaluable knowledge about consumer trends and habits. Expert monitoring and consumer analysis is an essential tool to insure that your pay-per-click campaign is a success.

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More about pay per click.
Because machines surf more than people you might be charged for their clicks. In addition,
daily management monitoring time is required, while it's fairly easy it can be time consuming. Also statistics indicate users have a tendency to skip over sponsor links/ads as artificial search results. As mentioned before, bidding wars drive up cost making Per-click costs on popular terms very expensive. You may find popular terms to be so expensive they are cost prohibitive.

Organic Traffic or Paid In general Pay-per-click programs pay less than affiliate programs because you are trading higher commission rates for a higher probability of earning income since your visitors don't have to purchase they only need to click. However, because of it's general nature, if you have a website with a narrow focus/narrow targeted audience pay-per click may not be your best choice. You should also know, certain pay per click programs cap the click-through ratio, claiming this is an anti-fraud protection measure, other pay-per-click programs cap the payout amount you can receive based on the ratio of the amount of ads displayed by you against the number of users clicking through those ads. When you have a highly relevant, targeted site this practice can negatively impact your potential income.

Before signing up for any Pay-per click program or adding banners to your website consider the following factors:

1) How do they count click-through?
2) What do they pay-what is their payment history?
3) What are their payment terms?
4) What are their terms and conditions?
5) What other tools or features do they give you?
6) What is the quality of their advertisers?

Before you commit to any agreement carefully read the entire document. You can bet if there are restrictions, they will be discreetly hidden among some elaborate legal terms. Caveat emptor!

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