Pay Per Click Advertising

Pay per click(PPC) is an online advertising model used to direct traffic to websites. In this method, the advertiser pays the publisher when an internet user clicks on the ad. Pay-per-click advertisements are displayed on blogs, web pages and social networking websites. The advertisements are shown based on a specific keyword entered by the user in search engines.
Pay-per-click advertising works on the principles of 'affiliate marketing'. The advertisements are displayed on third-party sites, which are, in turn provided financial incentives by the advertiser. Pay-per-click advertising is an effective mode of marketing that allows new companies to get fast exposure in a short span of time.

HOW IT WORKS?


In a highly competitive online marketing scenario, it is difficult to ignore this mode of marketing, given its cost-effective nature. Pay-per-click or cost-per-click advertising works in a simple and efficient manner.
1. Firstly, the advertisement is displayed on the website chosen by the advertiser. The cost per click is determined using either Flat-rate PPC or Bid-based PPC.
2. The advertisers choose certain keywords or phrases depending on the target market, which are supplied to the publisher(or search engine). This requires detailed keyword research.
3. When a user enters a query on a search engine, relevant advertisements are displayed along with web and image results. Thereby , directing traffic to the company website.

DETERMINATION OF COST-PER-CLICK:


The cost per click of an ad is determined by the publisher. This is done in either of the following ways-


1. Flat-rate PPC: In this set-up, the publisher decides a fixed amount for the advertiser. Usually, a rate-card is used for this purpose. This is generally used in comparison-shopping, where websites are compartmentalized into narrower categories. This generates higher revenue.


2. Bid-based PPC: In this mode of marketing, advertisers compete with each other over a range of keywords on the advertising network. The internet network hosts an online auction where the bidding is done. Factors like ad-relevance and quality are often taken into consideration.




HOW IS IT DIFFERENT FROM PAY-PER-IMPRESSION?


In pay-per-click advertising the advertisers pay only when the ads are clicked.
With pay-per-impression, advertisers pay each time the advertisement is displayed. This is similar to TV commercials, where advertisers pay depending on airtime.
Pay-per-click is more cost-effective as advertisers pay only for the traffic generated on their website by their efforts.

ADVANTAGES OF PAY-PER-CLICK:
Pay-per-click advertising has many advantages over traditional methods of marketing.


1. It involves a hassle-free set-up and the investment will immediately be recovered through clicks.


2 . Increases the number of visitors to the website. This in turn, increases product awareness.


3. This method is inexpensive compared to other modes of marketing like Search Engine Optimization. The amount of human labour is also reduced.


4. As the PPC advertising relates to number of clicks obtained, it is considered to be a pay-per-performance model of advertising.


5. Target-oriented: Each advertisement is created for a certain geographical location and sites with relevant content. This directs high quality traffic to the company site.