The majority of online advertising today is conducted using a Pay-Per-Click advertising (PPC). If you look at the top of a Google search, you will see a series of the adverts before the actual search engine results appear. Here’s an example of a search for ‘cheap+pianos.’
These are paid-for adverts using a product called Google AdWords. There are a number of competitors which are also available including Bing Ads, although Google AdWords is by far the biggest player in the market.
Notice how the top section of the search results displays the term ’Ad’ in a box. On the right-hand side are some images of pianos, with prices and links to the advertiser. These advertisements are all paid for. The benefit to the small businessman is that there is no charge to display the advertising as with traditional media, such as TV and press. You do not get charged until somebody actually clicks on the advert – hence the term Pay-Per-Click (PPC). The more you are willing to pay for your PPC advertising, the higher your adverts will appear in relation to the other companies competing for the same keywords. It is similar to an auction, but for the best position.
It is worth noting that just below the adverts appear links to websites which are generated through organic rankings. These are websites which have content which is very closely linked to the terms typed into the search box in a regular Google Internet search. For popular search terms, these websites have worked very hard to get their high-ranking position. In fact, there will have been a lot of time and resource given to their high ranking in the search engine. This is also down to popular and precise content, supported by SEO. It would be a mistake to think that it is simpler to try to get to the top of the search, especially for popular terms.
A simple AdWords example
There follows a more advanced explanation, but put simply – you bid for a series of keywords such as ‘cheap+piano’ ‘budget+piano’ ‘bargain+piano.’ Prices can vary from a few cents to many dollars.
Let us say your keyword ‘bargain+piano’ cost 10 cents per click. You pay in advance, using your company credit card. You buy $100 worth of advertising which is 1,000 clicks. Again, in basic terms, you sell 5 pianos, and generate 500 new members for your mailing list, as well as a new distributor. You can cost the pianos – you may make a margin of $100 per piano = $500 income. Bingo! You’ve made $400 additional income, 500 new mailing list customers for your ‘funnel,’ and a new business partner – the latter being less measurable. You can see why online advertising provides such an opportunity.