With the advancement in the internet world in mid 90s a new model of advertising called pay per click or cost per click was proposed. It was a turning point which totally changed the scenario of internet marketing. Today, this model has become one of the biggest sources of income for various websites and search engines in the form of banner ads or text ads. Under this model, advertisers pay to the publisher e.g. a website owner or search engine whenever a visitor clicks on the ad relevant to the target market. For search engines bidding system on key-word phrases is used. PPC is used to assess the cost effectiveness and profitability of internet marketing. Every click on PPC ad is a measure of interest and attention of consumer towards the targeted product.
How does it work?
- PPC campaign starts when an advertiser pays an amount according to his budget to the advertising system e.g. Google Adwords. Advertiser bids on keywords and pays whenever someone clicks on his advertisement. Depending upon the content of the ad and bidding of the keywords, position of the ad on display page is determined.
- Whenever a user/consumer searches for some query, search engine dives into the pound of keywords and extracts out some ads and displays them along with organic search results. The ‘Ad Rank’ is a vital factor which determines the appearance of an Ad. It is the product of ‘CPC Bid’ and ‘Quality score.’ Cost per click bid or CPC bid is the maximum amount an advertiser is ready to pay. And Quality score is a factor which is based upon the click through rates, landing page quality, authenticity, relevance etc.
- The minimum amount of money (for Google) that an advertiser has to pay for each click is determined by following formula:
PPC is indeed a best way to reach potential customers by paying minimum amount. All you need is little understanding and right strategy to place your ad and beat up the competition.
- Target Right Audience. While setting keyword and creating ads, always think about the audience you are aiming at. Analyze the situation by putting yourself in their shoes. Ask yourself:
Are the keywords you are using matching their needs? Is the content of your landing page connected with the keywords? Is the landing page catchy and useful enough?
- Add ‘subscribe/shop now’ option(s) near to the product details on the landing page. Be clear about the goals. Decide what you want a visitor to do after he lands.
- If you’re a beginner, use automatic bidding. In this you will just set daily and CPC bid budget, and system will try to provide you maximum possible click within provided parameters. However it’s been observed that manual bidding is a better option but it requires deep understanding of the market.
- Position matters a lot. Almost 70% users don’t scroll past the first page. For this you don’t need to pay extra just to be at ad rank 1. Put efforts to get ad-rank from 4-10 (much cheaper than rank 1-3). This will still keep you on very first page.
- You can even boost your leads from less popular search engines like Bing. Although you will get less clicks but bidding rates are low. Plus due to less competition it is easy to get ‘Ad rank 1’. All this tend to drive higher conversions.