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Online Marketing with Pay Per Click Advertisements

Pay per click (or PPC) ads on a search engine allow an advertiser to supply answers to a viewer at the moment the viewer is interested in a specific product or service. The most familiar PPC ads appear on search engines, as shown in the following illustration.

In the illustration, typical PPC ads on Yahoo! are shown in the column to the right of natural search results for the search term reno real estate; paid sponsor listings appear above natural search results.

These text-only ads, which look like classified ads, appear only if users search for one of your preselected keywords. Facebook, MySpace, Twitter, and other social media channels now also carry PPC-style ads. PPC advertising has proved durable: Spending on PPC ads generated about $11.9 billion in advertising revenue in 2010.

[Credit: Reproduced with permission of Yahoo! Inc. © 2011 Yahoo! Inc. YAHOO! and the YAHOO! lo
Credit: Reproduced with permission of Yahoo! Inc. © 2011 Yahoo! Inc. YAHOO! and the YAHOO! logo are registered trademarks of Yahoo! Inc.

PPC-like ads that appear outside search engines may not reach well-qualified prospects. A user who views ads on social media pages or other websites isn’t as likely to be nearing a purchase decision as someone who clicks the ads in the rightmost column of a search engine results page.

PPC differs from old-fashioned advertising in these three important ways:

  • PPC ads are displayed on search engines only when users are interested enough to enter a chosen keyword. The result is a highly targeted audience.

  • Ads that are fed to non-search-engine sites generally use contextual targeting. Results from using this technique are displayed only when nearby content or an internal search includes your chosen keyword. On some social media channels or other non-search-engine sites, you can also target ads based on demographic options, instead of, or in addition to, keywords.

  • By definition, the cost of PPC ads is based on the number of click-throughs you receive, not on the number of times your ad is served or viewed. Those views are called impressions in traditional advertising. Variants of PPC, including PPA (pay per action) and the traditional CPM (cost per thousand impressions), now exist.

David Hallerman of eMarketer noted in 2008 that “even though many people are willing to click relevant paid search ads, they prefer organic listings”. Although organic search listings may receive as much as 70 percent more traffic than PPC results, people who click PPC ads are more likely to be interested in buying products or services than in seeking information.

You don’t have to place ads on terms and phrases for which your site already appears near the top of search results! Save your budget for competitive search terms when you can’t break through on natural searches. As your natural search results improve from using SEO, you may be able to stop paid ads on certain keywords.

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