PAY PER CLICK MODEL OF ADVERTISING

Pay per Click is an advertising technique used on websites, advertising networks and search engines. Pay per click advertising on search engines allows users to choose keywords they would like their site to appear for when a search is performed. Users decide how much they are willing to pay each time a person clicks on the search results. The more they are willing to pay per click, the higher their site will appear in the results for the keywords they have chosen.

PPC Advertising is an arrangement in which webmasters (operators), acting as publishers, display clickable links from advertisers, in exchange for a charge per click. As the industry evolved, a number of companies began acting as middlemen between the publishers and the advertisers. Each time a (believed to be) valid web user clicks on an ad, the advertiser pays the advertising network, who in turn pays the publisher a share of this money.

We at red :rain Solutions help our customers with the complete design and development of PPC campaigns. While designing the PPC campaigns for our clients we keep in mind certain issues while advising them on the right PPC marketing strategy.

. How many searches a month are performed at the search engine?

. What major search partners or affiliates does the search engine have?

. How many searches are generated each month by the search partners or affiliates?

. Is it possible to opt out of having your listing appear in the results of the affiliate sites?

. What fraud prevention mechanisms are in place?

. What is the procedure for filing a "fraudulent clicks" report?

. Will an account be credited for fraudulent clicks discovered?

. Is it possible to opt out of having a listing appear for searches originating from specific countries?

. Is there a posted terms of service for search partners or affiliates?

Depending upon the search engine, minimum prices per click start at US$0.01 up to US$0.50.Very popular search terms can cost more on popular engines even up to $64 per click. We advise our clients to look for search engines that have very strict guidelines for dealing with their search affiliates. This is important because we want to be sure the search engine is working hard to prevent fraud among its affiliates.

Generally, the larger the pay per click search engine, the more customers will have to bid to get to the top for their chosen keywords. This is why it is worth investigating different search engines to find what it would cost to bid on the chosen keywords and how much traffic they draw. The largest companies in the pay per click industry are Yahoo! and Google. Google is not a pay per click search engine, but it does provide pay per click advertising in text ad boxes to the right of search results it delivers. It also delivers pay per click ads to other content sites.

We at red :rain Solutions feel that Pay-Per-Click campaigns have some advantages over traditional search engine optimization. First of all, they require no changes to a current site's content or look to obtain top positions, just a willingness to pay. Also, the implementation of a pay-per-click campaign is relatively quick- it can take just a few minutes to start getting targeted traffic, versus sometimes months for standard SEO campaigns. Finally, unlike search engine optimization, the implementation of a PPC campaign is relatively easy and does not necessarily require any specialized knowledge (although experience with search engine marketing and keyword research is a definite advantage).

Of course, there are limitations to this type of advertising. New bids can lower the positions of other firms, and many will react by raising their bid to regain a previous ranking. Monitoring of positions becomes crucial. These campaigns can also become prohibitively expensive, depending on the competitiveness of the keyword phrases and the aggressiveness of the competition. In addition, many of the "savvier" search engine users have learned to recognize PPC results as paid advertising and bypass them without consideration.

Determining how much each website visitor is worth is vital to the success of a pay-per-click campaign. If it costs $50 in click-throughs to make a $40 sale, the campaign has failed. The formula is relatively simple, but some specific historical data is necessary. In the most rudimentary form, it is the profit from the website over a given period divided by the number of total visitors for the same period. If a site netted $1000 in profits from goods or services in a given period, and there were 2,000 visitors during the same period, each would theoretically be worth 50 cents (profit divided by visitors). But this is only the breakeven point. Depending on the desired profit margin, the optimal price to pay per click would probably be something much less than 50 cents. Popular keyword phrases can often run more than this, so it then makes sense to bid less money on less popular terms to pay an acceptable amount per visitor.

A very important point to keep in mind with pay per click is you must test, test, and test some more. Don't start off with a major investment. Start with the minimum and see how the search engine performs in terms of the traffic it delivers and how well that traffic converts into paying customers. An essential part of your testing is having a method in place that allows you to track your return on money invested. For example, if your goal is to bring in new subscribers to your newsletter, you could direct visitors arriving from your pay per click link to a subscription form set up just for them. You can then monitor how many clicks actually result in a new subscription. As such, you will know how much you are paying for each new subscriber.