How PPC Marketing Works

There is a big difference between pay per click marketing and SEO. Neither of these sections are intended to be a complete how to guide, but are designed just to give you a brief intro into both topics.

What is PPC?

Pay per click ads usually appear in a colored box on search results pages and are separated from the regular search results on most major search engines and portals. Some portals (such as Ask Jeeves and AOL) are not clearly separating the ads from the regular search results.

Many of the larger PPC networks have many search partners and broad sweeping contextual advertising networks.

Who Owns the Largest PPC Networks?

This is a rough estimate, but between 10% and 30% of purchases which originate from search come from pay per click ads. Currently Google AdWords and Overture are the two largest pay per click search engines.

Risk Involved with PPC?

Pay per click search engine marketing has no risk involved other than the money you are spending buying the clicks. This means that you do not need to worry about your site getting banned from a search engine for PPC services.

The recurring costs for PPC marketing can be expensive since you pay for every click. Some competitors may click on your ads to cost you money (this is more prevalent in high margin industries). It is important to track your ads and report suspicious behavior.

How PPC Works

With pay per click marketing you buy search engine traffic based on relevant keywords bought in an auction model. (Some smaller pay per click engines charge by category.) You pay for every click so targeting is important. You can view Overture click costs for your primary keyword phrases using the Overture view bid tool. Google hides bid prices and factors ad clickthrough rate into click cost.

Why Should I use Big PPC Networks?

There are many smaller pay per click networks, but I recommend starting off with the two largest to ensure you are buying quality traffic and that your business model is sustainable. Using these networks will also provide your business with a rapid feedback loop.

Overture VS. Google AdWords

The trick to doing well in Google AdWords is encouraging a high clickthrough rate which will lower click costs. Google created a free PDF report offering tips on how to use AdWords effectively. Overture also recently created a free “how to” PDF.

The trick to doing well in Overture is to use many different variations of your keywords since they place exact match listings before broad match listings. This means if you bid on the exact term someone is searching for and someone else bids on a different variation of a similar term your ad will appear before theirs, even if your bid is significantly cheaper.

Some people will do better with Overture and other industries are better using Google AdWords. I recommend trying both.

PPC VS. SEO

Pay per click marketing may provide a quick cheap alternative to investing in a full service SEO program. This will help you test your business model before investing into quality SEO services. Over time good SEO is likely going to be cheaper than most pay per click marketing, though the value of each depends on a market. A person selling a report about using Google AdWords would find Google AdWords as a great place to market their product.

Many PPC Ads Lose Money

Like anything else there is a learning cycle associated with PPC marketing. Many people who use pay per click marketing lose money, so you should not assume your competitors know what they are doing (especially if they are a large corporation like Wal-Mart). Many business models cannot support pay per click marketing, while others rely on PPC marketing.

Many successful marketers and webmasters use both PPC and SEO with each other. The only way to be sure of the value provided by each is to test and track the results.