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What Is Pay Per Click

Written By Ahmad Nurhakim on Senin, 18 Februari 2013 | 08.57

What Is Pay Per Click


A brief Pay Per Click definition is: PPC is a type of sponsored online advertising that is used on a wide range of websites, including search engines, where the advertiser only pays if a web user clicks on their ad. Hence the title, ‘pay per click.’
When our clients ask us to define Pay Per Click, we tell them that PPC is a very cost-effective means to get their site noticed by their target audience while our other Internet marketing strategies are gradually helping their site achieve their natural ranking potential.
In a way, PPC advertising works like a silent auction. Advertisers place bids on keywords or phrases that they think their target audience would type in a search field when they are looking for specific goods or services. When a web user types a search query into the field of a search engine that matches the advertiser’s keyword list or visits a web page with content that correlates to the keywords or phrases chosen by the advertiser, the PPC ad may be displayed on the page. In search engines, a PPC ad is generally just above or to the right of the search results where they can be easily seen. On other kinds of websites, the ad will be placed in the location that the site designer has determined will be the most advantageous to his site and the advertiser.
To differentiate PPC ads from the natural search results displayed on a page, search engines will often place PPC ads under “Sponsored Ads” or “Sponsored Links” which also makes them easier to notice on a page that is crowded with text and other items competing for a web user’s attention.
Overall, PPC ads are beneficial to advertisers and web users alike. Advertisers get noticed by their target audience and are charged only for the times that their ads are clicked on and web users get to select from sites that may be relevant to the page they are viewing without having to deal with obnoxious banner or pop-up ads that flash and distract.
There are countless pay per click management services out there competing with each other but, without question, the heavyweights in PPC advertising are, in order:
1. Google Adwords
2. Microsoft adCenter
3. Google Adsense
4. Clicksense
The rates that these outfits charge for a PPC ad vary significantly depending on the popularity of the keyword or phrase. For example, if an advertiser wants a PPC ad targeted for the phrase ‘cottage cheese’, they can get prominent placement for their PPC ad with a very low bid and a low per-click charge. However, for a phrase such as ‘computer’, an advertiser can expect heavy competition for prominent placement and expect to pay premium per-click rates. It all comes down to supply and demand for the keywords and phrases that the advertiser wishes to target.
Pay per click ads also level the playing field like no other form of advertising. A small, web-savvy company can, with a limited budget, outbid much larger companies with enormous advertising budgets and gain the edge they need to get noticed in their market.
You Can join In Pay Per Click bellow is list PPC:

1) http://www.google.com/adwords
2) http://bidvertiser.com
3) https://www.widgetbucks.com/registra...ge?action=call
4) http://www.adsvert.com/
5) http://dclickads.com/webmasters_get_started.php
6) http://www.text-link-ads.com/

Purpose

Cost per click, along with cost per impression and cost per order, are used to assess the cost effectiveness and profitability of internet marketing. Cost per click has a big advantage over cost per impression in that it tells us something about how effective the advertising was. Clicks are a way to measure attention and interest. Inexpensive ads that few people click on will have a low cost per impression and a high cost per click. If the main purpose of an ad is to generate a click, then cost per click is the preferred metric. Once a certain number of web impressions are achieved, the quality and placement of the advertisement will affect clickthrough rates and the resulting cost per click.


Construction


Cost per click is calculated by dividing the advertising cost by the number of clicks generated by an advertisement. The basic formula is:
Cost per click ($) = Advertising cost ($) ÷ Ads clicked (#)[1]
There are two primary models for determining cost per click: flat-rate and bid-based. In both cases the advertiser must consider the potential value of a click from a given source. This value is based on the type of individual the advertiser is expecting to receive as a visitor to his or her website, and what the advertiser can gain from that visit, usually revenue, both in the short term as well as in the long term. As with other forms of advertising targeting is key, and factors that often play into PPC campaigns include the target's interest (often defined by a search term they have entered into a search engine, or the content of a page that they are browsing), intent (e.g., to purchase or not), location (for geo targeting), and the day and time that they are browsing.

Flat-rate PPC

In the flat-rate model, the advertiser and publisher agree upon a fixed amount that will be paid for each click. In many cases the publisher has a rate card that lists the cost per click (CPC) within different areas of their website or network. These various amounts are often related to the content on pages, with content that generally attracts more valuable visitors having a higher CPC than content that attracts less valuable visitors. However, in many cases advertisers can negotiate lower rates, especially when committing to a long-term or high-value contract.
The flat-rate model is particularly common to comparison shopping engines, which typically publish rate cards.[5] However, these rates are sometimes minimal, and advertisers can pay more for greater visibility. These sites are usually neatly compartmentalized into product or service categories, allowing a high degree of targeting by advertisers. In many cases, the entire core content of these sites is paid ads.

Bid-based PPC

The advertiser signs a contract that allows them to compete against other advertisers in a private auction hosted by a publisher or, more commonly, an advertising network. Each advertiser informs the host of the maximum amount that he or she is willing to pay for a given ad spot (often based on a keyword), usually using online tools to do so. The auction plays out in an automated fashion every time a visitor triggers the ad spot.
When the ad spot is part of a search engine results page (SERP), the automated auction takes place whenever a search for the keyword that is being bid upon occurs. All bids for the keyword that target the searcher's geo-location, the day and time of the search, etc. are then compared and the winner determined. In situations where there are multiple ad spots, a common occurrence on SERPs, there can be multiple winners whose positions on the page are influenced by the amount each has bid. The ad with the highest bid generally shows up first, though additional factors such as ad quality and relevance can sometimes come into play (see Quality Score).The predominant three match types for both Google and Bing are broad, exact and phrase. Google also offers the broad modifier match type.
In addition to ad spots on SERPs, the major advertising networks allow for contextual ads to be placed on the properties of 3rd-parties with whom they have partnered. These publishers sign up to host ads on behalf of the network. In return, they receive a portion of the ad revenue that the network generates, which can be anywhere from 50% to over 80% of the gross revenue paid by advertisers. These properties are often referred to as a content network and the ads on them as contextual ads because the ad spots are associated with keywords based on the context of the page on which they are found. In general, ads on content networks have a much lower click-through rate (CTR) and conversion rate (CR) than ads found on SERPs and consequently are less highly valued. Content network properties can include websites, newsletters, and e-mails.
Advertisers pay for each click they receive, with the actual amount paid based on the amount bid. It is common practice amongst auction hosts to charge a winning bidder just slightly more (e.g. one penny) than the next highest bidder or the actual amount bid, whichever is lower. This avoids situations where bidders are constantly adjusting their bids by very small amounts to see if they can still win the auction while paying just a little bit less per click.
To maximize success and achieve scale, automated bid management systems can be deployed. These systems can be used directly by the advertiser, though they are more commonly used by advertising agencies that offer PPC bid management as a service. These tools generally allow for bid management at scale, with thousands or even millions of PPC bids controlled by a highly automated system. The system generally sets each bid based on the goal that has been set for it, such as maximize profit, maximize traffic at breakeven, and so forth. The system is usually tied into the advertiser's website and fed the results of each click, which then allows it to set bids. The effectiveness of these systems is directly related to the quality and quantity of the performance data that they have to work with — low-traffic ads can lead to a scarcity of data problem that renders many bid management tools useless at worst, or inefficient at best.




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