Pay Per Click Marketing

(PPC)

Pay-Per-Click, or PPC, marketing is a popular form of advertising online to attract warm prospects to a web site. It is an Internet advertising model used on search engines, advertising networks, and content sites, such as blogs, in which advertisers pay the network fee only when their ad is clicked.

This article will discuss the two models of pay-per-click marketing available online today.

Because pay-per-click models revolve around search engines, the keyword term that is entered into the search engine to find your site must be relevant. Each time a search is conducted by a user for your relevant keyword, your web site can turn up in the search engine results page.

Some search engines use PPC ads along the top, bottom and right hand side of the search engine results page. This placement is due to the fact that a reader's eye naturally goes from left to right in the first pane, or fold, of a web page.

There are some search engines that are PPC-related only, that only display these type of ads in the results. Each time someone clicks on a PPC ad, the keyword bid is deducted from the advertiser's account.

This model is referred to as the bid-based PPC model.

In the bid-based model, the advertiser signs a contract that allows them to compete against other advertisers in a private auction hosted by a publisher or, more commonly, an advertising network. Each advertiser informs the host of the maximum amount that they are willing to pay for a given ad spot (often based on a keyword), usually using online tools to do so. The auction plays out in an automated fashion every time a visitor triggers the ad spot.

The major advertising networks, like Yahoo and Google, allow for contextual ads to be placed on the web sites of external partners. These publishers sign up to host ads on behalf of the network. In return, they receive a portion of the ad revenue that the network generates, which can be anywhere from 50% to over 80% of the gross revenue paid by advertisers. These properties are often referred to as a content network and the ads are contextual ad. This is due to the fact that the ad spots are associated with keywords, based on the context of the page on which they are found. In general, ads on content networks have a much lower click-through rate (CTR) and conversion rate (CR) than ads found on search engine results pages, and consequently are less highly valued. Content network properties can include websites, newsletters, and emails.

The other PPC model is referred to as the flat-rate model. This is where the advertiser and publisher agree upon a fixed amount that will be paid for each click. In many cases, the publisher has a rate card that lists the CPC within different areas of their website or network. These various amounts are often related to the content on pages, with content that generally attracts more valuable visitors having a higher CPC than content that attracts less valuable visitors. However, in many cases advertisers can negotiate lower rates, especially when committing to a long-term or high-value contract. The flat-rate model is particularly common to comparison shopping engines.

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