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What is Pay Per Click Advertising?

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Increasingly the Internet is evolving into an advertising fuelled medium. Most users expect web services to come free of charge (for example Facebook, YouTube, etc.), so the web based companies providing these services collect revenues by selling advertising space.

For many years banner advertising was the only real option, with advertisers paying to place an advertising image onto websites that would run for a set length of time or until a set number of people had seen it. Unsurprisingly, just like printed media the best websites for advertising were soon unaffordable for smaller advertisers and small websites had trouble finding advertisers without a focused sales team to do the work, but surely this exciting new medium could come up with something better?

Pay Per Click (or PPC) advertising was the solution that began to evolve.

What is Pay Per Click Advertising

At first, PPC was just a different way to charge for advertising that offered advertisers a better deal and more flexibility over how much they were spending. The advertiser would agree to pay a set amount of money for every time the advert was clicked which meant they weren’t wasting money paying to display the advert to people who may not even be interested in it, they only paid for those that were.

It also meant that websites couldn’t lie about the amount and type of traffic they were receiving; all that mattered was the number of clicks, and those with limited budgets would simply agree a deal to display for a low number of clicks.

This democratised web advertising considerably for advertisers, but it did little for those websites who wanted to find advertising revenues easily.

Systems such as Google’s Adwords moved things even further; Adwords is a simple system where advertisers pay for PPC advertising on websites relevant to their target market (selected by analysis of keywords on the website). Websites of any size can sign up to display advertising, inserting a small piece of code into their HTML which pulls up adverts relevant to their market (again, decided by matching keywords on the website to keywords in the adverts).

Straight away, websites of any size could quickly get advertising relevant to their audience, and advertisers of any size could get affordable advertising campaigns delivered directly to the right kind of audience and only ever pay for the adverts which generated a click.

Today the system is highly refined and widely trusted, to such an extent that many others have copied it (such as Facebook) and even quite big players utilise it; Myspace and YouTube both use the Adwords system in addition to their regular banner sales activities. Advertisers can now select which keyword interests they want to advertise to and bid against other advertisers, with those offering the highest per click rate getting the most high profile and frequent exposure.

Unsurprisingly some keywords that are very popular demand very high per click bids to make using the system worthwhile, but there are also plenty of keyword options out there that can be picked up for peanuts.

There are also some accepted cheats to the system; some advertisers use PPC purely as a branding opportunity, designing their adverts not to generate clicks, but to raise awareness of their products and services. If no clicks are generated the campaign costs nothing but you still get your brand and products displayed to hundreds or even thousands of relevant web users.

The whole thing may sound like a dream come true to many, but there is an art to seeing results and in plenty of industries it simply doesn’t work very well. We’d encourage anyone considering web advertising to give it a try though, it’s easy to limit your financial exposure and get a feel for how well it could work for your business, and we can offer design and copywriting services on pay per click advertising to help you make the most of the opportunity.