Advertising in most media tends to be extremely expensive mainly because advertisers need to carry out blanket campaigns to be able to reach the maximum number of potential clients so a lot of money is wasted advertising to people who have no potential to become clients.

Pay Per Click Advertising (PPC) on the Internet solves this problem by serving up contextual adverts – i.e. search related or website content related adverts that target only those people who express an interest in the topic.

What is Pay Per Click Advertising?

PPC is an Internet based advertising model used on search engines such as Google, Yahoo and MSN.

When a search term or keyword is entered into a search engine search box, the search engine does a search of all the web pages in its index and serves up pages of results (Search Engine Results Page (SERPs)) relevant to the search.

In most cases, in addition, the search engine will also present on the results page a set of adverts that are relevant to the search (unless no one has paid for related adverts). They do this by matching the keywords entered with adverts that advertisers have previously submitted and serving up the advert when a relevant match is found.

This is actually where most of the revenue for search engines comes from. Since advertisers pay the search engine each time an advert is clicked on. The amount paid depending on the degree of competition and other factors.

Googles advert serving technology is called Adwords, Yahoo’s is Yahoo Marketing and MSN’s has Live Search and Content Ads.

How are Pay Per Click Adverts paid for?

As an advertiser, you can pay via two models depending on the Search Engine.

1. By the use of a fixed price rate which is determined by several factors such as whether the advert is only shown in a particular country, on a particular day, at particular times etc.
2. A bidding system where the degree of competition for particular keywords determines whether the you pay a minimal amount or a high amount. Each advertiser sets a bid amount similar to ebay, and the highest bidder wins and their adverts get shown the most or at the top while low bidders adverts may receive no exposure.

The great advantage of PPC is that your adverts are shown only to people who have shown an interest in the particular area e.g. if I should type in the keywords “leather shoes” into a search engine, only adverts related to leather shoes will be displayed. In addition, you are never charged unless people actually click on your advert and are taken to your website.

Google also has a related technology called Adsense which operates on website pages, newsletters etc. and serves up the same adverts, this time based not on a search but on the WebPages contents – however in this case the website advertiser and Google share the advertising revenue.

For you to reun a successful advertising campaign, you need to be able to make maximise your returns and minimise your costs. Download this manual free of charge to learn all about Google Adwords Adwords Made Easy