When people are looking to buy a product or use a service, they often begin their search not by visiting a store or opening the Yellow Pages, but by logging on to Google, Yahoo, MSN, BING or another online search engine. Increasingly, businesses hoping to attract potential customers are paying to have their ads listed at the top of search results. But instead of paying a set fee for placing a single advertisement, as is the case in print advertising, businesses pay only when customers click on their ads or take some other action that may lead to a sale.
This type of advertising is often called “pay-per-click” or “cost-per-click,” though there are variations on this model, such as “cost-per-call” or “cost-per-action” advertising. Like the Yellow Pages, this form of marketing offers a distinct advantage over more general forms of advertising, like newspaper or radio ads. Only people who are likely to have a strong interest in making a purchase will see the ads, and an even smaller subset of motivated buyers will click the ads for more information.
Complex strategies for maximizing returns on pay-per-click (PPC) ads have been developed, but getting started is no more difficult than creating and placing other types of advertisements. PPC advertising is, simply, the placement of a brief ad on the search results page for a specific keyword or set of keywords, in return for a payment to the search engine each time a visitor clicks on the ad. While a business pays nothing when its ad appears on the results page, the business will pay an agreed-upon amount when a potential customer clicks on the ad and is directed to the company’s website.
You may choose to advertise with smaller search engines that charge less or larger ones that have broad market coverage, but higher rates. Once you have selected a search engine, log on to the search engine platform to create a PPC account. Most search engine platforms offer various options for funding your account. You may, for example, wish to commit to spending a set amount per day or per month, after which no further advertising appears for that time period. Read the agreement carefully to ensure that there will be no unexpected charges to your account.
After setting up an account, you will be instructed to write a short promotional headline and ad designed to attract the attention of potential customers. Then you will be asked to enter keywords that describe your products or services, as well as other relevant information, such as location. There are online tools available to help you select the keywords and phrases most appropriate to your business.
The next—and potentially most confusing—step involves bidding for keywords. When registering your chosen keywords with the search engine, you will be asked to specify the maximum amount you are willing to bid for each word. Depending on the popularity of the word and the coverage of the search engine, a keyword can cost anywhere from one penny to one dollar or more. Advertisers who agree to pay the highest price per keyword are generally awarded higher spots on search results pages, though some search engines also use quality scores when determining which websites make it to the top. The bidding process is often automated, but you may want to monitor where you are in relation to competitors to ensure your advertisement does not slip too far down in the search results.
Some companies are also using other types of online advertising, such as the “cost-per-lead” model, in which you only pay if a visitor actually purchases something or provides their information on your website. The “cost-per-action” model allows you to specify what actions performed by the visitor—such as registering on the site or clicking past the homepage—you are willing to pay for. In the “cost-per-call” model, you are charged when visitors click on your ad and are connected to your business phone.
The ultimate goal of PPC and other types of online advertising is not to maximize traffic to your website, but to turn visitors into customers. You may have to experiment with various forms and cost structures for online campaigns before finding the right mix for your business. If you and your employees lack the time to monitor and manage your PPC campaign, you may wish to work with a marketing consultancy that can advise you on how best to achieve the results you want, while staying within your budget.