The ABC of Pay Per Click advertising.
PPC advertising may seem confusing and complicated if you are new to it. To use it effectively to increase your sales quickly and cost effectively, you need to have a good understanding of how it works. A good appreciation of the general online marketing techniques and search engine optimization is the bare minimum.
For a beginner, here is a simple overview of how it works:
Foremost, decide the advertisement will be displayed when which words or phrases (appropriately called keywords) are searched. The keywords should of course be relevant to your business or product. Then bid on the selected keywords.
The management of the bids is done by a sophisticated system called Ad Auction. Whenever the relevant keyword the advertiser bided is searched, it employs complex calculations and matching to determine which advertiser’s ad will be displayed and in which order.
The order may also be determined by the amount of money the advertiser is willing to pay per click. As with ordinary auction where the highest bidder carries the day, in PPC advertising, the ads of the highest bidder (the bidder willing to pay the highest amount of money) ranks top on the SERPs. This is called bid based PPC.
Other organizations use the flat rate PPC. In this arrangement, the advertiser and the host agree on a fixed rate to be paid per click. Ranking is therefore determined by proper use of keywords and quality of content and not money paid.
An example would probably help you visualise it better. For instance, you are a shoe manufacturer. You decide the most appropriate keyword for you is “best men’s shoes 2018” and you bid for it. A search of the keyword in the search engine triggers your ad to display. In the event the user clicks the ad, they are directed to your site and you will be required to pay the agreed sum of money (whether fixed rate or the bid based amount).