What is Pay-Per-Click ?
Also known as “PPC,” this type of paid search marketing involves placing advertisements that run above or besides (and occasionally below) the free search-engine listings on Google, Bing, and Yahoo!. Typically, to get the highest position among these ads, website owners place a per-click bid. It’s not uncommon to participate in a bidding war for coveted top spots. For example, if a website’s listing is among the top 3 advertisements on a page, the same ad appears in the same location on partner websites. Some marketing firms, including Fathom, provide bid management services to get the most value for each search term.
How Does Pay-Per-Click Advertising Work?
In order for ads to appear alongside the results on a search engine (commonly referred to as a Search Engine Results Page, or SERP), advertisers cannot simply pay more to ensure that their ads appear more prominently than their competitor’s ads. Instead, ads are subject to what is known as the Ad Auction, an entirely automated process that Google and other major search engines use to determine the relevance and validity of advertisements that appear on their SERPs.
How Keywords Work in Pay-Per-Click Advertising
As its name implies, the Ad Auction is a bidding system. This means that advertisers must bid on the terms they want to “trigger,” or display, their ads. These terms are known as keywords.
Say, for example, that your business specializes in camping equipment. A user wanting to purchase a new tent, sleeping bag, or portable stove might enter the keyword “camping equipment” into a search engine to find retailers offering these items.
At the moment the user submits their search query, the search engine performs the complex algorithmic calculations that the Ad Auction is based upon. This determines which ads are displayed, in which order, and by which advertiser.
Since you have to pay for each click on your ads, it’s imperative to only bid on keywords that are relevant to your business, so you can be sure to get ROI from your ad spend. A keyword tool can help you find the right keywords to bid on that are both likely to drive sales or conversions, and are not prohibitively expensive.« Back to Glossary Index