Introduction to Pay-Per-Click Advertising

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Introduction to Pay-Per-Click (PPC) Advertising

Let’s face it, you probably had to click on something to get here and I would be perfectly willing to pay for your visit.  That is what pay-per-click is all about.  As you are well aware the internet and websites are full of advertisements.  And someone, sooner or later, was going to figure out that companies would be willing to pay for a visit from a potential customer, and so pay-per-click advertising was born.

Now, I would be remise if I didn’t mention that PPC is not my favoirte method of attracting visitors.  If you have read any of my articles, you should have a sense that “Organic” traffic is my preferred method of getting traffic.  However, there is a time and place where PPC can be a fantasitc way to get things done quickly, with respect to Search Engine Visibility. And that is why we will spend some time disucssing it here:

So, Let’s learn how pay per click really works?

There are four sides to any pay-per-click program, the management company, the advertiser, the website owner and the potential customer.  Let’s take a look at each of these in a bit more detail:

The Managing Company – One of the largest managers of a pay-per-click program is Google.  And although there are many others, most of us will think of Google when we discuss PPC.

A large portion of Google original business model was based on PPC and for all I know it still might be their largest income stream.

Of course any company that is going to manage a PPC program will want it’s cut of the revenue, so when an advertisement is clicked on by a potential customer, the advertiser will pay a fee for each of those clicks to the PPC Program manager , hence the term “pay-per-click”.

The Advertiser – Which brings us to the second player in the PPC world, the “Advertiser”, generally someone who has something to sell and is willing to pay for any visit from a potential customer.  So essentially a company that is willing to pay a finders fee for a visit from someone who might be interested in their wears.

As mentioned above, the advertiser will typically create an “eye-catching” advertisement that can be displayed on just about any website.  The advertiser will then submit the ad to the program manager for distribution.  And the managing company will schedule the ad to appear on various advertising website in their network.

The Advertising Website – As we learned earlier, the managing company needs a place to display the Ads, so this is where the average website owner comes into the picture.  If you own a website, you will be able to sign up as an advertiser, display ads on your site and get your share of the advertising money.

We will discuss the exact process a bit later, but generally the website owner will place a “bit of code” on their site and the managing company will take care of the rest.  Strategically place on a sidebar or within the content of the website, the code will display random ads that available to be clicked and are linked to the advertisers website.

The Customer – Rounding out the four players in the PPC game is the potential customer.

When someone who is “surfing the web”, comes across an advertisement that interests them and clicks on that ad to learn more, the whole Pay per Click cycle has come full circle.  The customer gets to learn more about a product or service they are interested in, the Advertising website gets a commission, the PPC Program gets paid and the advertiser gets a potential sale.

Let’s take a look at it graphically, to make sure we all get it. 


When does everyone get paid with Pay per Click?

The beautiful part of PPC for the advertising website is that the customer does not necessarily need to purchase anything.  The transaction in a Pay per Click agreement is done once the click is performed and the customer visits the advertiser’s website.  So it now becomes a matter of “How much money did everyone make?”

And the fantastic part of PPC for the PPC Program and the Advertising website is that the advertisers will bid against each other for “Top Billing“. That’s to say that an advertiser that is willing to pay $1 per click will get more exposure than an advertiser that is only willing to pay $0.50 per click.

Let’s assume the advertiser is willing to pay $1 for each visitor to their website through a PPC Program.  Once a potential customer “clicks” on that advertisement the deal is done.  The customer is directed to a product or servcie he/she is interested in and the advertiser pays the PPC Program the agreed upon fee of $1.

The advertising website owner may get over 65% of the PPC fee, so in the case of the $1 fee the website owner may receive $0.68.  And all  of this happens instantly, the company get a lead and the advertiser and PPC Program get paid, all the in a matter of one click.

What are the benefits of Pay Per Click Advertising?

Positioning within a Search Page – If you are using a search engine, such as Google, as your PPC Managing Program, you may likely be looking to gain instant “ranking” for a given keyword.  Search Engines use the PPC business model to provide clients with the ability to rank Number One (or close to it) for a fee.

Paid advertisements will appear at the top of the search engine page as shown to the right.  The paid search results may be followed by local advertisements or “Featured Snippets” which are SEO friendly results from websites.

More than likely, the organic results will follow and are on the first page because of a successful SEO strategy by the website owner.

The sponsored results, however, have made it to the first page by bidding the highest amount on the given search terms.

When a searcher clicks on one of the sponsored posts, the advertiser is charged for that click, hence pay per click advertising. The price of a “click” will vary depending on the keyword. These include the popularity of the keyword, specificity of the keyword (long-tail vs. short-tail), and just how many other advertisers may be bidding on the same keyword as you are.

How can you get started with Pay Per Click Advertising?

Google doesn’t waste any time when you sign up for Google ADs (previously known as Google Adwords). You will be asked a few basic questions about your website and your target audience, then within a few pages you will be designing your AD, so make sure you are prepared with that information when you are ready to start. For much more detailed instructions for getting started with Google Ads, visit their instructional page: Your Guide to Google ADs.

Know what success means to you.



What are the benefits of PPC?

There are many benefits to using PPC ads. I have included a list of what I believe to be some of the top reasons for starting and implementing a PPC campaign below.

Position on a Search Page

Reach the Right Audience

Budget Control

Instant results




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