Pay Per Click (PPC) or Cost per Click (CPC) advertising is a search driven type method of marketing. The prospect clicks on a “sponsored link”, a paid link by the owner of a company website on a search result page after having conducted a query search in a search engine.
PPC advertising is a inorganic way of generating traffic to your website. In other words rather than potential prospects landing on your website via a particular search due to your website’s organic content, traffic is driven by paid adverts on the search pages.
Since it is a search based marketing method, the main players are Google, Yahoo and MSN. By far, Google dominates the search market controlling 78% of the market share and expected to move up to close to 85% in 2008.
February 2008 Search Engine Market Share

*source marketshare.com
Because of Google’s dominance we are recommending Google’s Adwords Starter Edition.
How Adwords Work
i) An account is created with Google for the Adwords service
ii) Choosing Adwords Format
You have the option of choosing from the following advertisement formats:
· Text Ads
· Image ads
· Animated Ads
· Video Ads
· Mobile Ads
· Local Business Ads—appears on Google maps
Text Ads
The text ad has the following components:
a) A headline advertisement, limited to 25 characters in a regular ad
b) A description of the headline, limited to 35 characters
c) The last line is a display URL, like www.cybernetfinder.com
Google Policy:
Google has a strict policy among them are:
· You are only allowed one exclamation point
· superlatives like “best” allowed only if supported by a third party
· only family safe images are allowed
iii) Targeting the Ad
To target the ad properly, and take advantage of Google’s contextual system, we need to develop a keyword campaign. The objective is to choose as precisely as possible words that are relevant to what you are selling.
Google operates a “Search Network” that includes: Google.com, Ask.com, AOL ,AT&T Worldnet, Shopping.com, Compuserve, Earthlink, Netscape Netcenter
Google also operates a “Content Network” where you can also place images and animated images along with text ads. Ads are shown where it is relevant to the content of that page. Google’s Content Network includes: About.com, Lycos, nytimes.com, infospace, Reedbusiness, howstuffworks, business.com, foodnetwork.com, Home and Garden Telivision, and Gmail.com
In the Content Network it is possible to place ads on specific webpages, this is known as Placement Targeting. The pricing for placement targeting works on an impression basis. You bid on a Cost per Thousand (CPM) impressions. Meaning you pay when your ad is displayed a thousand times. Your advertisement in Placement Targeting expands to fill up the whole banner, box or skyscraper space. This is different from regular text ads since it your ad may share the space unit with up to three other ads.
iv) Payment, Pricing and Ranking
You pay only when someone clicks on your ad. Even though your ad may appear thousands of times but if no one clicks on it, you do not pay. You can set daily budget limit. If you set budget that is less than what is recommended by Google, the ad may only appear intermittently.
Pricing or the actual Cost per Click for an ad is dependent on two factors the Ranking of the next lowest advertisement score for the keyword and the Google assigned Quality Score. Quality score is determined by Click Through Rate (CTR—The number of times your ad is clicked divided by the number of impressions), Keyword and Ad Text Relevance and the quality of the Landing Page.
Your Rank, where your advertisement appears on a result search page depends on maximum cost per click and quality score. Ranking is determined by multiplying the Max CPC by the Quality score. You only pay CPC necessary to have a rank number higher than the next lowest ad.
For example, even though advertiser B has bid is $0.65, the highest bid out of the three it is actually sitting in position two and paying two cents more $0.39 than the number one position advertiser who has a lower bid of $0.40. The reason is because of the quality score of the advertisement of A which is 1.8.
The actual CPC of A is determined by taking the rank number of B and dividing by the Quality score of A. In this case the result is $0.36. Therefore the actual CPC is one more cent above this which is $0.37.
Advertiser C only pays the minimum bid $0.04 because there are no other advertisers below it.
