Pay per click advertising [also called Google AdWords or just 'Ad's] refers to the form of search engine marketing that allows company websites advertised in the right hand side and top of search engine results for selected keyword searches. These appear as 'Sponsored Listings' within the major search engines. As the name pay per click advertising suggests, payment for the advertising is based on the number of clicks an ad receives.
How It Works
Pay per click advertising is often a step by step, complex process. Its success is dependent on a range of variables, such as budget determination, keyword selection, search engine selection, bid placement, ad creation and campaign review, each of which are explained below.
Exa's first step in pay per click advertising is to select the most appropriate keywords for which the company wishes to advertise. This is often seen as the most important step as it indicates which searches will display the company ad. To begin with, brainstorming should be undertaken to identify as many possible keywords and terms that are relevant to the company and its industry.
Once this list is established, keyword selection should be based on two major factors. Firstly, research needs to be carried out to highlight the most searched for words or terms on the list. This indicates the level of exposure each ad is likely to gain.
The intensity of competition for each keyword or term will indicate the price of that keyword or term. This is thanks to the bidding system in place in major search engines.
The first step to creating a pay per click advertising campaign is determining a suitable budget to allocate to the campaign. Determining the budget is almost entirely up to the company looking to advertise. The only budgeting restriction is any minimum spend requirement as set by the search engine itself.
Once the above steps are completed, a pay per click ad must be developed. These advertisements become the visual touch point for the company's targeted consumers. The design of these ads has several restrictions placed on them by the pay per click search engines.
Pay per click advertising works on a bidding system whereby a company places a maximum bid for each keyword or term they wish to advertise for. This bid not only indicates the maximum the company is willing to spend on each click (cost-per-click), but also plays a major part in determining the placement of the company's ad for that keyword or term.
One of the greatest benefits of pay per click advertising is the ability for businesses to monitor their campaigns. Pay per click advertising is a highly effective, highly measurable form of online marketing. Every time a consumer clicks through to a company's website, their actions within the site can be tracked. These actions can include number of pages visited, sales made, contact enquiries, newsletter sign-ups and more. Each of these actions can be allocated a particular value based on the dollars earned for the company.
With the right selection of keywords, a pay per click advertising campaign can be a very cost effective form of online marketing. Each keyword can be individually evaluated, allowing careful monitoring of the campaign and ensuring only the most valuable keywords are retained.
PPC vs Organic
One of the limitations to overcome within the bounds of pay per click advertising however is consumer distrust of paid ads as compared to the organic search results.
Online consumers are increasingly learning that the these listings are in fact paid advertising, and that the only true indication of relevance to a particular search term is found in the organic search results.
Whilst this can be partially overcome through effective ad creation and content development, it is an issue that cannot be totally avoided. However, one positive of this advertising model is that businesses only pay when someone clicks on their ad.
However, in order to reach the greatest depth and breadth of a market segment, it is important to combine effective search engine optimisation with AdWords advertising.