Pay Per Click Advertising Explained - PART 1

Anita van Wyk

Advertising your services or products on the Internet is both extremely effective and extremely competitive. There are several ways to go about attracting traffic to your website; Pay-Per-Click is one of the options you can choose from, along with developing an SEO, or search engine optimization campaign. Both pay-per-click and SEO are targeted to get your website placed as close to the top of search engine results as possible. One of the differences is that it takes minutes to set up a pay-per-click campaign versus months for a good SEO campaign.

Pay-Per-Click is a simple type of paid advertising that most search engines, including some of the largest ones, now offer. It requires a bid for a "per-click" basis, which translates to your company paying the bid amount every time the search engine directs a visitor to your site. There is the added bonus that when a per-click site sends your website traffic, your site often appears in the results of other prevalent search engines.

As with all marketing campaigns, there are advantages and disadvantages. If you understand the process and monitor your pay-per-click campaign frequently, it can be very effective. One of the greatest advantages is that you never have to tweak your web pages to change your position in search engine results, as you must do in a typical SEO campaign. What you do have to do in a pay-per-click campaign is pay a fee.

Another advantage is the simplicity of the pay-per-click process. You just bid and you're up and running. It doesn't demand any specific technical knowledge, though the more you know about search engines and keywords, the easier - and more effective - the process will be.

The downside is that pay-per-click is essentially a bidding war. A higher bid than yours will lower your position on search engine results. This means that you will have to raise your bid to regain your position - which can obviously become quite expensive, especially if you are bidding on a popular keyword.

In order to determine if pay-per-click is a cost effective form of marketing for your business, you must do some computing to figure out how much each visitor to your site is worth. You can compute this value by dividing the profit you make on your website over a given period of time by the total number of visitors for that same time period. For example, if your site made $5,000 in profits and there were 2,5000 hits, each visitor would be theoretically worth 50 cents. The basic formula is profits divided by visitors.

The figure of 50 cents per visitor is the point at which your business breaks even. The idea, of course, is to show a profit, not to merely cover your costs. Therefore, you are aiming at a figure less than 50 cents per click.

To continue to PART 2 Click here.
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