Pay-Per-Click (PPC) advertising is a great tool in the correct situation. Regardless of how small your advertising budget may be, it should be considered. As with any of the Web 2.0 marketing tools shown in the graphic below, PPC advertising has its pros and cons. In most cases though, the pros outweigh the cons.

What is Pay-Per-Click Advertising?
In the broadest terms, pay-per-click or PPC advertising is an Internet advertising model whereby other websites (search engines and Internet publishers) post your ad on their website and you pay that website a fee (cost-per-click or CPC) each time a web-surfer clicks on a link to a specific page on your website.

The most common use of PPC advertising is through search engines (listed as "Sponsored Links") but many other websites that compliment your site will post your ad for either a cost per click or a cost per sale. Generally this is done through a different Web 2.0 marketing tool called an "Affiliate Program" that we will cover in a future article in this series. In this article we will focus on PPC advertising as part of a search engine marketing (SEM) strategy.

How Pay-Per-Click Advertising Works
Most search engines use an ongoing auction system whereby you bid for placement. If your bid is the highest CPC then you will be listed in the top or #1 position of the sponsored ads. If your bid is the fifth highest, your ad will be listed in the fifth position of the sponsored ads.

You bid on each keyword or phrase by which you wish to be found when searched. The more popular search keywords or phrases generally cost more (per click) than the less popular ones. There are many tools (listed in Web 2.0 SEO – Search Engine Optimization) to help you select the right keywords and phrases.

Advantages of PPC Advertising
Although it can takes weeks or months of hard work to secure an organic (non-paid) top search engine ranking, you can be in the top position of a search engine results page (SERP) in just a few minutes with PPC advertising.

Since part of the algorithms used by search engines to determine your organic ranking is the amount of traffic to your site, initially using PPC advertising will help your organic (non-paid) rankings as well (of course, you still have to do all the other SEO work as well).

Most web-based advertising charges you by the number of impressions (those that view the ad), while PPC charges only if someone takes the initiative to click on the link and visit your specific web page.

You can manage and fine-tune your campaign on a daily basis and alter your strategy based upon results before you are hundreds or thousands of dollars into a campaign that is producing poor results.

Disadvantages of PPC Advertising
It can become costly (although no more costly than typical brick and mortar marketing) if you use broad keywords or phrases.

Some web-surfers are prejudiced against sponsored ads or PPC and will only click on organic listings.

The maximum number of words in a PPC ad is much more limited than in an organic (non-paid) listing. To compensate, you have to learn to convey the most with the least number of words.

How To Find PPC Search Engines
First you can search for them on Google and secure a list. SearchEngineWatch.com offers a list. Just keep in mind that the majority of all searches are done on Google, MSN (Bing) and Yahoo (Google alone accounts for about 65% of all searches).

Pay Per Click Advertising Strategies
The very first thing I would point out is that you should ardently track your results. If you are paying $1 for each click through (generally, minimum bid is 10¢) and it takes you 25 click throughs for one conversion to a sale, this means it is costing you $25 for each sale you secure through PPC advertising. Obviously, if there is not more than a $25 margin in what you are selling, this will not make sense.

Several years ago, I was selling a product for about $5,000. No one came to the site and just bought. I would email them a proposal and have several conversations with them before the sale was closed. Nonetheless, I tracked what we were spending in PPC advertising for each month for our leads and how many sales we secured. I don't remember the exact amount, but our cost per sale from PPC advertising was about $500. Our margin was about $2,500, so this worked great for us.

Although you will have to bid against competitors, you do not need to be in the #1 position to succeed. Several years ago, I read an article where the author claimed to secure more click throughs in the #3 position than in the #1 position. Not only did he enjoy increased results but it also cost him less for the #3 position. You can test and track this sort of thing for yourself and see the differences the position makes for you.

It is very important that your search terms (keywords and phrases) are well defined as you do not want to pay for click throughs by people who are not your prospects. For example, we only wholesaled the $5,000 product I mentioned above. Since we did not retail the product, we did not want our PPC ad to be shown to retail prospects. We did not want to spend the money on these prospects or be bogged down dealing with them because that was what our retailers were doing. So we made sure our ad showed only when the search term "wholesale xxxx" was used. Otherwise, we would have paid for many click throughs from people who were not our target market.

Finally, even though a vast majority of searches are done through Google, MSN (Bing) and Yahoo, don't overlook the less popular search engines as there are some real values there. The much lower cost of these second and third tier PPC search engines can assist in lowering your overall average cost per click.

If you are reading this article in the morning and you currently are not using PPC advertising, you can more than double the amount of traffic to your site before the sun sets today, by simply using pay-per-click advertising.

Those that enjoyed this article, also enjoyed:
Web 2.0 Online Marketing Series – Overview
The Elements of a Web 2.0 Website
Web 2.0 Blogging For Business
Web 2.0 SEO – Search Engine Optimization
Web 2.0 Email Marketing & Autoresponders
Web 2.0 Online Press Releases & Ezine Articles
Web 2.0 Forum & Blog Commenting
Web 2.0 Professional & Social Networking
Web 2.0 RSS Feeds and Widgets
Web 2.0 Video & Podcasting
Web 2.0 Wikis & Open Source Marketing
Web 2.0 Bookmarking & Reviewing Sites
Web 2.0 Affiliate Marketing Programs

If you would like to contact me, you can do so by emailing me at mike.clougor visiting my LinkedIn page.