Understanding Pay Per Click Advertising
October 7, 2009 by Ron
Filed under Contextual Marketing
So where did the Pay Per Click Advertising concept originate from in case you are not sure what this is this is what eventually became Google AdWords.
It was as far as I can work out pioneered by Bill Gross, the founder of a company called Idealab, who based the idea on the yellow pages. Initially, Google actually attempted to buy out the idea but was unsuccessful in its efforts, and eventually ended up launching AdWords in 2000 instead.
However, since AdWords followed the original Bill Gross model so closely, legal action inevitably followed, which Google and Idealab eventually settled.
Adwords is now Google’s most important and valuable advertising product and its biggest source of revenue.
At the very start, webmasters and businesses that used AdWords would pay Google a monthly amount in exchange for Google setting up and managing their ad campaigns.
Soon after, Google soon introduced the AdWords self-service portal to service small businesses as well as those who preferred to manage their own campaigns.
In 2005, Google began providing a campaign management service called Jumpstart to assist advertisers in setting up their campaigns,however this service has since been discontinued.
Today, AdWords offers pay-per-click (PPC) advertising, and placement targeted advertising (formerly known as site-targeted advertising) for both text and banner ads.
The AdWords program allows advertisers to select whether they wish to advertise locally, nationally, or even have a world wide distribution. Google’s text ads are short, with just one title line and two content text lines. Image ads are also available and can be one of several different Interactive Advertising Bureau (IAB) standard sizes.
Pay Per Click Advertising (PPC)
Pay Per Click Advertising or what it is known as in the marketing circles PPC is a form of Internet advertising that is used on content sites (like blogs for example) as well as search engines and ad networks. Advertisers post ad content with various web hosts and the host is paid only if and when their ad is clicked on.
When you here marketing consultants speak about “pay per click advertising” literally means what it says: the advertiser pays each time a visitor clicks on their advertisement.
Google AdWords is currently the most popular PPC provider (the next most popular are Yahoo!, MSN, and Ask).
When a web surfer or potential customer types in a search request on Google’s search engine or what is the equivalent Local/National/Country then the Google server will present ads for relevant words which are shown as “sponsored links” on the right side of the screen, and sometimes above the main search results.
This is also relative to your Country as well and as a advertiser on Google you can set your campaigns to only show in Australia or even more targeted town to cities.
How the paid-for listings are ranked depends both on other advertisers’ bids (PPC) and the “quality score” of all ads shown for a given search. The quality score is calculated using a formula that takes into account historical click-through rates, relevance of an advertiser’s ad text and keywords, an advertiser’s account history and other factors as determined by Google.
This quality score is also used by Google to set minimum bids for an advertiser’s keywords. While a list of guidelines for sites is available from Google, the precise formula and its definition of “relevance” remain trade secrets.
Pay Per Click Advertising Becomes More Targeted
In 2003 Google rolled out what is called site-targeted advertising. With placement targeting, it is possible for an ad to take up the entire ad block rather than have the ad block split into 1 to 4 ads, resulting in better visibility for the advertiser.
Using the AdWords control panel, advertisers enter keywords, domain names, topics, and demographic targeting preferences, and Google then places the ads on what they see as relevant sites within their content network. If the advertiser wishes to target domain names, Google also provides a list of related sites for placement of the advertisements.
Advertisers may bid on a Cost Per Impression (CPI) or Cost Per Click (CPC) basis for site targeting. The minimum cost-per-thousand impressions bid for placement targeted campaigns is 25 cents, however there is no minimum bid for CPC.
Hopefully our article on PPC Advertising has helped you to understand a little more about Pay Per Click Advertising and has given you a head start before opening your own Adwords account.
Adwords is really great for promoting your website and also affiliate links. i have just passed the Google Adwords Professional exam today and i am very happy.
I really appreciate all the great insights from this article. Your site is very well designed too by the way. Lots of great articles and easy to use menus. My hat is off to you. I am learning a lot. I will put a link to your site on my blog.
Adwords is really good in driving traffic to your website. however, they are very strict right now and they would not easily approve websites that they thought have low quality content. ,
PPC is a very analytical skill that companies should invest into. You really have to make sure you are getting a return on investment (RO1) and constant monitoring of your campaigns is the only way to do that
Hi Amit and welcome..
Many people really don’t understand about ROI, they setup an account and before they know what is happening there credit card is being charged for hundreds of dollars in clicks.. You need to monitor everything with PPC advertising and even when you start you should be checking at minium three times a day and also setting limits as to what you want to spend.
Thanks for taking the time to explain. I signed up to Adwords, or was it Adsense, a few years back thinking I could get into affiliate marketing. But I didn’t really understand how it would work best so it didn’t go very far and I didn’t make any money. I think you have to go into something like this with a lot of understanding.
In conclusion PPC advertising is a lovely way to come up with site visitors and reviews. It is deemed an cheap means of marketing the offerings for the reason that the primary core is based on utilizing the correct search term which may be kept up to date in accordance with present industry situations.
Hi Sarah…
Yes it is a very effective way to get targeted traffic to your online business, however you should not just rely on Pay Per Click Advertising as this can be very short term and adds no value to your website as a business.
You also need to be building an online presence through social media and most of all article marketing which in turn will get you solid one way links increasing your listing in the search engines and also giving you free traffic for your business.
I never knew there was such a word such as ppc. I will definitly apply the ppc to further my education through the internet while also dealing with google. I know there is definitly some money in here when the visitor clicks, cos if they click, you get paid. Good post.
dan recently posted..Raisin Roll Delight
i both use Adwords and FB Ads, facebook ads are much more expensive compared to adwords “
Hands down on matt cutts, the person who can provide a detailed information on how we can create a successful website that can drive traffic and increase its sales or leads.
PPC is good for some businesses if the keywords are not already being monopolised by larger companies. Web design or website design would cost me between £1-£7 per click if I was on the 1st page. I would lose more money than I would bring in (working on a 1% conversion rate). I know other keywords are cheaper but honestly if you were looking for web design what would you type in?
It is really life changing when we hit the right target for our business, we may think it is not fully achieving the goals we set but it is, really it is. Making your advertisement more attractive and more productive and highlighted is more likely gathers the input we want to. Like what I did I have a lot of ideas gather and apply to it. It is a comforting for us to see progress when the idea we acquire is effective. We really believed in the sayings “Two heads is better than one” so I apply all the necessary concepts to make my advertising more grateful and effective. Follow this link to have free ppc tools.
1. The strategy is simple yet profound. In marketing we need a little common sense and a little hard work.
If we are to succeed we need to sacrifice something. It just sounds hard but what it really means is that we are going to sacrifice small things for bigger things.
PPC is one of the most important part when it comes on driving traffic to a site. Using PPC would really change the cycle of your internet marketing business.