Some businesses advertise under a few terms, some advertise under thousands; it all depends on how much you are prepared to spend, how much time you have to run the search campaign, and how effective PPC could be to your profit. (If you are paying for people to go to your site but they can’t buy your products or do anything that makes you money then it won’t actually help your profit!)
Bidding
Basics
The bidding process varies on different search engines; so we will use the most popular one (Google Ad Words) as a starting point.
In basic terms, you choose a price that you wish to bid for each keyword. You then pay anywhere from the minimum amount (determined by your ‘quality score’, including click through rate, the relevance of your ad text, and other factors) to your maximum bid for every click your ad gets; depending on where your competitors are bidding. In general, the higher you bid, the higher up in the ad section you will be; so bidding more means a higher cost but better visibility.
Some terms will cost 10/20 pence per click, while some keywords can cost over £10 per click; it depends on how many people are bidding on that keyword.
Not so Simple
The reality is however, that bidding is much more complicated than just money:
You cannot see your competitors’ bids, so you are choosing numbers out of thin air until you check where they make you appear. The cost usually works in that you pay slightly over the competitor below you; so if you bid £3, and they bid £2; you would expect to pay around £2.01; depending on your quality score. The amount will vary depending on what position in the results you are bidding closest to.
If your click through rate (I.e.: The proportion of people who actually click on your ad instead of passing over it) is good, your ‘quality score’ will go up, and you will appear higher in the results; if it is bad you will appear lower in the results. This means that writing an effective ad that inspires people to click is absolutely essential; and could save you money every time someone clicks on it.
Each search engine has a different bidding system, and one of the most important things you can do is to thoroughly read the instructions for each one before you start spending.
E.g.: Yahoo’s bidding system is simpler, and lets you see what your competitors are bidding; but the search engine has less visitors and often lower click through rates.
PPC Search engine marketing can be highly beneficial, profitable and cost effective if you plan well; it can also drain your bank account if you rush in.
Article Index
1. How Can Your Business Benefit from Search Engine Marketing (PPC)?
2. How Much Does Search Engine Advertising Cost? Why Use PPC?
3. How Does PPC Advertising Compare to Other Types of Advertising?
