Pay Per Click - How It Works

Pay-per-click search engines auction position for specific keywords and keyword phrases. But who are pay-per-click search engines? You've probably heard of Overture, but who searches on Overture? And you may not have even heard of some of the other leading pay-per-click engines, such as FindWhat, Kanoodle, Sprinks and Ah-ha. Well, some people do actually go to Overture and search, but for the most part, pay-per-click engines have relationships with other search providers to deliver results. About, Alta Vista, AOL, Ask Jeeves, Google, LookSmart, Lycos, MSN and Yahoo all include paid listings in their search results.

To be included in those listings, you bid for position for the keywords that you think will drive the right kind of traffic to your site. Not only does this allow you to guarantee that your site will show up on the coveted first page of search listings, but you can bid for hundreds or even thousands of keywords and phrases that suit your business. Traditional search engine marketing only allows you to optimise a few terms. Usually, the fewer you optimise the better your listings. The most important thing to keep in mind with pay-per-click advertising is that you are not paying to be listed, you are only paying for the actual clicks you get on your listing. This is an important distinction, and the primary reason that pay-per-click marketing is on the rise, while banner and traditional offline marketing are on the decline. Imagine if you could run an ad on prime time television, but only pay for the viewers that actually ended up visiting your business. That's how pay-per-click advertising works.

The challenge is that pay-per-click listings can be competitive, very competitive. It is not uncommon to see bids of £1-£5 for first position for popular terms, and pay-per-click advertisers often update bids many times a day. You could easily find yourself in 4th position with a bid of £1.23, while 3, 2 and 1 are £1.24, £1.25 and £1.26 respectively. For 4 pence more, you could be in first position. You could also decide that you are happy in 4th position, but you only need to bid 75p to stay ahead of the 5th listing. If you don't stay on top of your listings, you will inevitably pay more than you need to for the same results. By precisely monitoring bids, you can also dramatically improve your overall results over time and reach the true potential of precisely targeted marketing.