Friday, September 01, 2006

What's All the Buzz? - Search Engine Pay Per Click (PPC) Advertising

What's All the Buzz? - Search Engine Pay Per Click (PPC) Advertising
Copyright © 2006 Rob Favero

One of the hottest forms of advertising on the Internet today is Search Engine Pay Per Click (PPC) advertising. If you've heard the terminology, but you're not sure what all the buzz is about, this article is for you.

The basis for this form of advertising is "pay per click." This means that an advertiser only pays when someone clicks on the advertiser's ad.

So let's say you have an ad, and it gets displayed 100 times. But so far no one has really been paying much attention to it. Then, person 101 comes along and clicks on your ad. Boom. That's when you pay -- only when the person clicks.

This is a great deal for advertisers. Clearly, at those points when no one is paying attention to your ad, it has zero value for you. But at the point that someone takes focused interest in your ad -- a specific, click-through interest -- the ad takes on value. So you only pay for ads with value.

But in recent years, the power of pay per click advertising has risen to a new level.

One of the most critical aspects of effective advertising, the kind that generates income, is its ability to reach people who are looking for what you have to offer. This concept is simple, but finding an audience who wants what you have is easier said than done.

So here's the question. What places on the Internet have vast awareness of the things and topics people are looking for?

The answer is search engines.

Think about it. Helping people find the things and topics they want is the whole reason for search engine existence.

The innovation in the last several years has been to combine search engine results with PPC ads.

And it's no surprise that the big players in this game of search engine advertising are Yahoo! and Google. Yahoo! provides this service through its Yahoo! Search Marketing ( Google Adwords ( is Google's offering.

Undoubtedly, you've seen this type of advertising, maybe without even realizing it. Whenever you do a search on Google or Yahoo!, more often than not your search results will include entries with a label of "Sponsor Results." They appear along the top or to the right side. These are PPC ads, and they are related in some way to the search you did.

So what's the cost for this type of advertising? It's not a simple answer.

One of the key factors in the cost is page position. It's no surprise that the top position is generally the most effective ad position. And the top positions go for the most money.

But there isn't a set amount for a particular spot on a search results page. You can't go to Google or Yahoo! and find out precisely how much a particular spot costs.

That's because page position is decided through bidding.

Now, remember, you don't actually pay to display your ad. You only pay when someone clicks on your ad. So when you set up an ad campaign, you set a maximum amount you are willing to pay for a click. This amount becomes your bid. You also choose keywords that determine the search results your ad gets displayed with.

Then, when a person runs a search, the search engine finds all ads that are eligible to be displayed for the search. It compares bids, and the highest bidder gets position 1. The next highest gets position 2, and so on.

Isn't that mind-boggling? That every search you run results in a mini-auction of advertisers vying for your attention?

Because of this bidding process, ad costs vary greatly, depending on the particular search that was run. Ads displayed on searches for which there are few competing ads can go for pennies per click. However, with searches related to lucrative business endeavors -- say insurance, for example -- top spots can easily go for dollars a click.

This description of the bidding process covers Yahoo! Search Marketing, but it only approximates the process used by Google Adwords. Google adds a variation to their service, and it provides an interesting twist to the basic model.

With Google, determining position on a search page depends on some combination of bid amount and relevance. The more relevant your ad is to a set of search results, the lower your bid has to be to earn a position over another, less relevant ad.

The precise definition of relevance is elusive, but surely an ad, for example, of scuba gear on a search for bicycles would almost certainly have low relevance.

So Google rewards relevance -- and creativity. Advertisers who figure out how to create a highly relevant ad can reduce costs over that of their competitors. It's a factor in the equation that evens things out a bit between small and large advertisers. It's a factor that you can leverage, if you can create highly relevant ads in your campaign.

Search engine PPC advertising has taken a prominent position on the Internet because of two primary features. First, advertisers are charged only for ads with actual value; you only pay when someone takes notice and clicks on your ad. Second, the advertising is targeted; people see your ad while they are actively searching for what you have. The combination of these two features creates a powerful tool for Internet marketing.

Copyright (C) 2006 Robert Favero

About The Author:

Rob Favero is the creator of the Laugh Vitamin Humorous Thought of the Day Web site at It provides a humorous thought on a daily basis. Visit his site and sign up today for free delivery of a daily Laugh Vitamin to your email inbox. Also, do you need free, high quality content for your Web site or ezine? Join Free Reprint Articles and choose from a variety of well-crafted articles you can use today.

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