Pay Per Click (PPC) Defined

This is an advertising method where an advertiser pays a certain amount of money every time someone clicks on one of their ads, and therefore is taken to their website.  This method was popularized by Google’s “Adwords” program.  And while there are many other PPC programs available, Adwords is still the largest, most popular and most effective.

The way Adwords works is, you bid on certain keywords related to your website or business.  You say, “I am willing to pay this much money every time someone clicks on my ad”.  That amount varies dramatically based on your market and competition. It can be as little as 1 cent, or as much as 40 dollars or more.  Then, when someone searches for any of the keywords you have bid on, Google does a mini auction, determining who’s ad will show in what position.  The main things they look at when they do this auction is the keyword’s relevance to your website, the quality of your website itself, the quality and performance of your ad, and of course, your bid price.  Once the auction is completed, Google then assigns the different ads to the different positions and displays them.  Here’s the important thing though, you don’t pay what you bid – you pay based on the people below you’s bid.  Because of these other factors, like the quality of your website, past performance and keyword relevance, you can actually be paying much less than the people below you and show up higher than them!

Not all PPC programs work this way, but many of the most popular ones do.  There are many good reasons to not only use Google’s adwords, but use the other programs as well.  You can often get better traffic for less from these other programs.  But as far as sheer quantity, Adwords is the best.