PPC Strategy - What is Pay Per Click (PPC) and How Does it Work?

Article: What is Pay-Per-Click (PPC)?
By Julie Friedman Bacchini

There’s a lot of confusion surrounding pay-per-click campaigns. Here is a quick Q&A to help you grasp the basics!

Q. Exactly what is a pay-per-click campaign?

A. In a nutshell, a pay-per-click campaign allows you to purchase placement for an advertisement within the sponsored search engine results for a given keyword or phrase.

Q. What do you mean, “sponsored search engine results”?

A. The first thing to understand is that search engines provide two different kinds of results for every query: organic and sponsored.

Organic search results come up purely based upon relevancy. For instance, if a web page is optimized for the term “herb gardening,” then it will appear in the organic search results when you type “herb gardening” as a query. The order that sites appear in the organic search results is driven by the search engine’s internal algorithm that ranks the sites.

In addition to organic search results, search engines show sponsored search results. These usually appear above or below the organic search results, or off to the side, depending on what search engine you are using. Sponsored search results are simply paid advertisements. They actually have nothing to do with relevancy as such … the search engine does not “rank” them at all. Sponsored results appear because a company paid to have their advertisement come up for a given keyword.

Q. What is a keyword?

A. A keyword is a word or phrase that people search on to find a product, service, or website. For instance, to find a gardening site you might go to Google and type in “herb gardening,” or “flower gardening,” or “garden plants for sale,” to name just a few options. All those terms are keywords, or keyword phrases.

Q. How does a pay-per-click campaign work?

A. Here’s how a pay-per-click campaign works: You open an account with a search engine (Google is the most common). You then bid on desired keywords and keyword phrases, i.e., “herb gardening.” How much you are willing to pay for these keywords determines whether your ad will be displayed in the sponsored search engine results, and where you will be displayed within those results.

For instance, if you bid $0.05 for “herb gardening,” but other companies have bids around $2.00 for that same term, your ad will probably never appear. But if the top bid is $2.10 and you bid $2.00, you may get on the first page of sponsored results for “herb gardening,” although your ad may not be in the #1 position.

Q. How does payment for a pay-per-click campaign work?

A. You pay the search engine the amount of your bid every time someone clicks on the ad to go to your site. Therefore, you do not pay for each impression (when the ad is shown), just for click throughs (how many times someone clicks on your url in the ad).

For example, you bid $1.00 on the term “wildlife photography” in Google. Your ad is shown 200 times, but people only click on it 5 times. You therefore only pay Google $5.00 total.

You have my permission to reprint and distribute this article as long as it is distributed in its entirety, including all links and copyright information. This article is not to be sold or included with anything that is sold.

About the Author:

Julie Friedman Bacchini is President of Neptune Moon Design (www.NeptuneMoon.com), a full-service agency providing businesses and non-profit organizations with custom web designs, web site marketing plans, and strategic search engine optimization (SEO), all designed to build brand recognition, increase site traffic, and generate leads, clients, and revenue. Be sure to visit NeptuneMoon.com to read additional articles that will help you reach your business goals!