What Is PPC?

Pay Per Click (PPC) is big business. In fact, it’s the primary manner in which Google makes
money—almost all its income, 98 percent, comes from PPC—and is very important to Yahoo!
as well. Pay Per Click has brought mass-media advertising to small businesses. Businesses that
would never have spent money on radio, TV, or newspapers, are now spending it on PPC . . . and
sometimes even making a profit!
Sometimes? Well, the fact is that PPC doesn’t work for everyone, as you’ll learn in this
chapter. You need the right combination of gross profit per sale, Pay Per Click price, and website
conversion ratio. If you don’t have the right combination—and many businesses simply
don’t—PPC will lose you money. Get everything lined up just right, though, and PPC can
provide a regular, predictable flow of profitable business to your web site.

Pay Per Click refers to an advertising mechanism in which advertisers pay each time someone
clicks their ad. More specifically, though, these days it refers to ads displayed on search-engine
results pages.
You can see an example in Figure 22-1. At the top of the search results are two small
ads—shown on a light blue background in this instance. In the top-right corner, notice the words
Sponsored Links. More ads appear down the side of the page—again with the words Sponsored
Links, but this time above the ads.
Each time someone clicks one of these links, the company that placed the ad is charged. How
much? Somewhere from 5 cents (on Google) or 10 cents (on Yahoo!) to many dollars! Some
PPC ads cost as much as $50 per click, occasionally even more!

Because large PPC systems generally “feed” a variety of sites, when you buy ads through
a system such as Google or Yahoo! Search Marketing Solutions, your ads may end up on many
different search sites. But you may also have your ads distributed elsewhere, like on the pages of
thousands of different web sites, thanks to the Google AdSense distribution program.
PPC advertising has a number of advantages:

■ It’s very quick. You can start getting results from the search engines in a day or two (in
theory, a few hours, but in most cases it takes a little longer to get everything sorted out).
■ It’s reliable. Using PPC to get traffic to your site is very reliable. You can generate a lot
of traffic, and always appear for appropriate searches in the major search engines . . . if
you’re willing to pay enough.
■ It’s easy to measure. You can see just how much traffic you’re getting, and even figure
out how much of the traffic turns into business.