Pay per click advertising (PPC)
PPC (also called Cost per click) is an Internet advertising model used to direct traffic to websites, where advertisers pay the publisher (typically a website owner) when the ad is clicked.
Pay per click advertising at search engines can be described most easily as follows: The placement of small text only advert on the search results page which is triggered by a specific keyword or phrase being typed in a search box.
For example, carry out a search at Google for ‘digital cameras’ and look at the number of adverts that appear both above the ‘organic’ results and to the right hand side of the page. Now go back and do a search for ‘digital camera memory’ and note the different adverts that appear for that specific search. Programmes like Google AdWords provide real time advertising connections with targeted customers when they are keyword searching for a specific product on a cost per click basis. The advertiser chooses which keywords they want their ads to be linked with along with the daily budget for the campaign. The ads appear either on the right or side of the screen under ‘sponsored links’. Google also provides keyword tools to help identify the similar words, phrases and synonyms that might also be targeted. Advertisers only pay when a prospect clicks through but are getting a qualified lead. Analysis of those keywords that generate the highest click through rates (CTR) provides an indication of performance. This is because Google considers ads with a higher quality score, or high CTRs to be more relevant, and, just as with its organic listings, Google continuously strives to deliver best possible listings to searchers. Consequently Google AdWords was developed to work in a different way to Miva. Miva ads are ranked purely according to how much advertisers bid on keywords. Google AdWords, however, use both maximum bid and historic CTR to determine a rank index by multiplying the two together. So, if more relevant and highly targeted ads can be devised that result in a higher CTR, ads may well appear above ads of competitors – and they may well be paying more for their clickthroughs. For example, suppose a competitor is bidding $0.20 on a keyword and you are bidding only $0.10 for the same keyword. If your historic CTR is 5% and your competitors is only 2% (because you are writing more appealing ads) then your ad will appear above theirs because ($0.10*5%) is greater than ($0.20*2%). That said, Google also adjusts the actual CPC downwards to ensure that an organisation is not paying more than necessary to obtain a given ad position.
Google AdWords ads also appear on Google’s partner sites in its Search Network which includes the likes of AOL, Ask Jeeves, price comparison site Deal Time an BT Openworld giving wider reach but to targeted, relevant markets. The key to success in using any PPC service lies in the richness of keywords themselves as well as the continuous testing of ads, such as using A/B split rotation of ads determine which ads deliver the highest CTR. CTRs will usually be much less when keyword groups have too broad a range of keywords. It is better to ensure that keywords are grouped in such a way that each group is smaller and words within it are based on your understanding of customer behaviour. Alongside Google’s own keyword tools, online marketers can use the likes Wordtracker to track the most commonly typed in words to boost ROI.
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