During the early days of the Web, companies that wanted to advertise online did so mainly by purchasing space on websites to use for displaying banner ads. This type of advertising could be hit-or-miss; many of the people who viewed a company’s banner might have little interest in the product or service offered. Pay per click advertising — generally abbreviated as PPC — was introduced in the late 1990s by the company Goto.com. Later, search engines such as Yahoo! and Google began using PPC advertising as a means of generating revenue. It is now one of the most common forms of online marketing.
How PPC Advertising Works
The PPC advertising process begins when a company logs in to one of the major PPC platforms — Google AdWords, Microsoft adCenter and Facebook Advertising are the largest — and creates a new campaign. Companies base PPC campaigns around the keyword phrases that relate most closely to the products they offer. For example, the keyword phrase “fix Dell laptop” is a keyword phrase that might have a high degree of relevance to a shop that repairs failed computers. After selecting the desired keyword phrases and associating them with a text, image or Flash advertisement, the company enters a “bid” for each phrase. The bid signifies the amount of money that the company is willing to pay the PPC network when someone clicks the advertisement. A company can increase the chance of its advertisement being displayed by submitting a larger bid.
PPC Targeting
There are two primary types of PPC advertisements: search and content. Search advertisements are displayed on search engine results pages, usually at the top and bottom. Content advertisements are displayed on websites. The difference between the two is the way in which relevant keyword phrases are selected; the primary keyword source for search advertisements is the search term used to generate the results page on which the ads are displayed, while the primary keyword source for display advertisements is the text on the page being viewed. In addition, a person’s previous Web searches and previously visited websites may be used to select advertisements that he or she is likely to find relevant.
PPC Networks
Google AdWords is the largest PPC network, largely because Google receives the majority of the world’s search engine traffic. Google also encourages webmasters to join the AdSense network, which allows them to earn money by displaying advertisements. Between the popularity of Google and AdSense, advertisements placed on AdWords reach an enormous audience. Although Microsoft adCenter and Facebook Advertising do not have the same reach, an advertiser may be able spend slightly less on some keyword phrases with these networks than with AdWords because of decreased competition from other advertisers.
