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Pay Per Click (PPC) Advertising Basics

Posted by Steve | Posted in Pay Per Click Advertising 101 | Posted on 13-09-2011

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Pay per click (PPC) is an advertising option chosen by many Internet Marketers whose product profit margins justify the advertising investment.

Basically, you place an ad on a Google ( or other sites and search engines), pay the site owner for each click-through (that is, every visitor who clicks through to your site) and visitors come to your site to view the chosen product or service. If they buy your product you must figure out whether the investment in advertising was worth it.

Some of the terms used in PPC are as follows.

  • Ad group: Where and how your ads and keyword lists are organized and organization should be on top of your list.
  • Campaign: This is where your ad groups are organized. It is also where you set your  budgets or how much to spend on each campaign. You can also set certain parameters like the geographical area in which the ads will run and the demographics and time frames.
  • CPC (cost per click): The amount you pay each time your ad is clicked.
  • CTR (click-through rate): The percentage of how many times your ad was clicked, divided by how many times it was shown.
  • Destination URL: The address of the Web page that the ad points to. This is your landing page and it is an imperative that it reflects the usres serach phrase (keywords)
  • Display URL: The Web address displayed in your PPC ad. This can be different than the actual landing page which may be too verbose.
  • Impressions: How many times your ad was shown when a user searches your chosen keyword(s). You don’t pay for this.
  • Keyword: The words and phrases you have chosen to bid on.
  • Match type: This is how close you want the search engine to match the users query to your list of keywords for the ads . The types are broad, phrase, or exact.
  • Maximum CPC: The dollar amount you set that you are willing to pay for each time your ad is clicked.
  • Conversion Rate: This is the ration of the number of site visits from your ads to the number of actual sales made.
  • Campaign Cost per Sale: This is the ractaul cost in PPC advertising for each sale. This is the indicator which tells you whether your campaigns are paying for themselves.

    These are the terms you will become familiar with when you start a PPC campaign. In the next post we will discuss these factors in greater detail.


    Steve Williams


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