How Effective Is Pay-Per-Click Advertising?

by Sathishkumar on November 3, 2011

This is a guest post written by Miles Walker. If you would like to write for us, do check our guest posting guidelines.

There are many ways to advertise a website. One of the most common is pay-per-click advertising. Despite how many times you may have heard of pay-per-click advertising, you may still be unclear on what it is and how effective it can actually be. To help, below is some information everyone should know about pay-per-click adverting.

Pay Per Click Advertising Effectiveness

What Is Pay-Per-Click Advertising?

Pay-per-click advertising or PPC advertising is an advertising model specifically used to promote websites. As the name suggests, certain website owners are paid for the number of click through they produce for another website via an advertisement.

However, a growing trend has been the use of pay-per-click advertising by the major search engines. Search engines such as Yahoo and Google now offer website ads on the pages where naturally produced search engine results also appear. These ads are usually obtained through auction. Whoever bids to pay the most to the search engine for each click through wins the ad space.

What Are The Benefits Of Pay-Per-Click?

The most obvious benefit to this advertising strategy is the efficiency of its cost model. For other advertising methods, one flat rate will be changed no matter how many actual visitors are produced. With pay-per-click, on the other hand, a website owner only pays for the actual number of visitors that an ad produces. Because of this, it can produce more bang for the advertising dollar.

The second obvious benefit is this advertising method is it can be very targeted. You can choose exactly the customers you want to go after by selecting certain websites to carry your ads. You can also choose the exact keywords you want your ads to be associated with on the major search engines.

What Are The Down Sides To Pay-Per-Click?

Of course, there are downsides as well. Due to how well this advertising strategy works, it can eat through an advertising budget very rapidly. This can be a problem if far more non-paying visitors go to your site through such an ad than the number of people that actually spend money at the site.

It can also be quite expensive due to the bidding process that search engines employ. If there are many competitors in the same market, the bidding can result in very high prices. In other cases where there are no bidders, prices may still be stuck at relatively high levels regardless.

Exactly How Effective Is Pay-Per-Click?

The answer to this question is that pay-per-click can be very effective. It is on the most efficient advertising methods that has yet to be invented. It can also be extremely targeted to go after very specific customers.

The one downside, however, is cost. A cost benefit analysis must be preformed before devoting too much money to this strategy. If a site already has enough exposure with customers without pay-per-click, cheaper strategies may prove more cost-effective.

Author Byline: Miles Walker looks at car insurance quotes over at CarinsuranceComparison.Org.

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Article by Sathishkumar Varatharajan

Sathishkumar is an Online Marketer and a full-time Blogger.

Sathishkumar Has Written 634 Articles For

  • Aaron

    I haven’t used PPC personally but read about it and I have questions here. Hope you can answer it for me.

    There would be some limit, like Google will show only certain number of ads for any search term. right? what’s that limit?

    Let’s say my bid is lower than other bidders whose ads are allowed to show for specific search term what would happen with my bid, I mean my ad is not showing but I still bid so do I have to pay anything to Google? without gettng any benefits?

    Please bear with me answer and answer these questions.

    • Alok

      @Aaron : Pay per click is a highly effective way to drive instant traffic to your website, & the good thing is that you can target specific audience through this advertising medium.

      As far as, the ad position is concerned, it not only depends on your bidding amount, but also on your quality score. Google determines quality score mainly on the basis of your CTR.

      By proper and sharp planning, you can harness the tremendous potential of PPC advertising.
      But if you play it carelessly, u can very easily lose your money. This is also known as Performance marketing.

    • Sathishkumar

      Hi Aaron, first of all Google Adwords works completely in a bidding system. If you bid low for a keyword and if your ad won’t show in the search results then you don’t need to pay a penny. Even if your ad shows up and no one clicks on it, you won’t charged. Its Pay Per click i.e., you will be charged only if someone clicks it. Concerning your first query, there is a limit for the number of times your advertisements shows up and it will be mentioned by you. In other words, if you go for a keyword which costs $5 per click and if you set $100 as daily budget, then once you’ve got 20 clicks on your ad it won’t show up again until the next day. I hope you are clear now.

  • Aaron

    @Alok, thanks buddy your suggestions.

    @Sathishkumar Thanks for answering my questions. But I want to ask on “Google search result page” how many ads would be displayed by Google? Is there any limit for it?

  • Tim Ryan

    Pay per click has been around long enough for people to know that it is very effective. As you have put it, it can be used to get only targeted traffic which of course is very good for a site. It can be very expensive but the results one gets are at most times worth the price paid.

  • Divya

    my friend is doing PPC Marketing he is very well in that so i too started learning that and it will help me to learn more about PPC

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