Everything You Need To Know About Pay-Per-Click
 By B.J. Addington

If you sell online, you’ve got hundreds of millions of potential buyers. The bad news is, you have to make them aware of your wares. Few will stumble onto your e-commerce site. Even if they do, will they be interested in what you sell? One solution is pay-per-click.

Search engines like Google list Web sites that match queries. Type “sewing machines” and you get 11,900,000 Web pages containing those keywords.

But your sewing machine Web site is only one of 11,900,000. Worse, you’re probably not listed among the first 100 results, maybe not among the first 100 pages. Most searching buyers don’t go beyond the first page or two of results.

Pay-per-click, however, can move you right to the top. Here’s how.

Pay-per-click works something like buying a magazine ad for sewing machines that will run along side a news article about sewing. The difference is, you must pay for the magazine ad whether or not anyone looks at it or visits your place of business.

You pay for the pay-per-click ad only if it sends someone to your Web site. And, those sent have already expressed at least preliminary interest in what you sell, based on their interest in your ad. Think of pay-per-click as paying for qualified sales leads.

Most search engine result pages list matching links in descending rank, according to how well they match search phrases.

But there also is another list of matches, usually in the right-hand margin or set off at the top. These are pay-per-click matches. You can put your site atop the pay-per-click listing the old fashioned way: Pay for it.

Pay-per-click rankings are open to bid. For example at Google, first you create a text-based ad. Then you bid for search result keywords, which Google calls AdWords. The highest bidder for a word or phrase generally gets the highest ranking.

For example, if you want to appear at the top of the pay-per-click list on the Google search results page for “sewing machines,” submit a bid for keywords associated with that search. Prices range from a penny to $100 per word. If you’re among the top bidders, your ad is displayed in the right margin or across the top of search result pages generated by queries for those keywords.

The beauty of the system is that you pay only when Web users click on your ad and are sent to your Web site. If you bid a nickel, when someone clicks through on your ad, you owe a nickel. But for your nickel, you’re guaranteed a visitor to your Web page that’s linked to your ad.

The Google pay-per-click system also works for Web site content pages, similarly to the way it works on search results pages. When a Web site contracts with Google for placement of content-related ads, your “contextual” ad can show up, based on the same kind of bidding process. You will be sent a visitor to a sewing supply Web site, who clicks through on your sewing machine ad. Again, you pay only for those who click through, and you pay only at the per-click rate you bid.

The safeguard in the system is that you determine how much you are willing to pay for each click, and you set the maximum amount that you will pay.

If you bid a nickel per click and your budget allows for a maximum of $50 worth of click-throughs, you will pay a maximum of $50, but only after receiving 1,000 click throughs (.05 times 1,000 = $50).

The more esoteric and unique your keywords, the less you will have to bid to win high placement. You’ll have to bid more for common words widely sought after. Search sites like Google offer assistance in choosing the best keywords, and for bidding strategy and on ways to control costs and measure return on investment. Learn more at https://adwords.google.com/select/.

(Posted June 2006)

>>Back to Focus Workshop