What is pay per click advertising?

Pay per click advertising (PPC) or cost per click advertising (CPC) is the method by which search engines monetise their search results. Search engines place relevant ad’s related the search query, in Google (the largest of the search engines these are known as sponsored links.

These PPC ads are sold on an auction basis which can be compared to a simple supply and demand costing matrix – the more clicks or impressions there are the less they cost, the more people that demand the impressions or clicks the more the cost goes up. Advertisers can bid any amount of money to buy that search term. Bid the most and you have a good chance of ranking number 1 or being the first ad displayed at the top or the right of the page.

There are also other facts that determine the ad position, you can’t simply buy the term and bid the most and expect to be at the top of the page, there is also a factor called ad relevance. Ad relevance (Google) is the relevance of the ad and landing page that you are advertising to the search word or keyword that you are buying. Google wants to display only the most relevant ad’s so that its users so that they click more often. The more relevant you are to a term, the higher the ad relevance. The higher the ad relevance the less you have to pay to be top ranking or in a premium position.

Advertisers are charged when a potential custom clicks an ad, this cost is based on the cost per click at the time (any value up to your maximum bid) and charged accordingly. Daily budgets can be set to limit spend so you ca always be in cotrol of your budgets making Pay per click an excellent method for both large and small business to promote themselves in the internet.

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