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As with many emerging technologies,
PPC are known by several different names and acronyms. Some
people call it Pay Per Placement engines (PPP), others call them
Bid for Placement engines, and the list goes on.
The industry is now trying to standardize on "Pay Per Click" as
the official terminology. The reasoning goes that you do not
actually pay for placement. Technically, the positions or
listings are free. You pay only for each click (i.e., visitor)
that you receive from that search engine listing. The person
placing the highest bid per click price for a keyword achieves
the highest placement or ranking.
The advantage of PPC's over paying for banner ads is that you do
not pay for impressions displayed, but instead for actual
click-throughs. With banners, you could purchase 1,000
impressions for $40 and receive only 20 clicks, costing you a
whopping $2 per visitor. In general, there's no guarantees how
much you'll pay per visitor acquired with most forms of
advertising. TV, radio, magazines, and others normally force you
to bear all the risk. You must create ads and pick advertising
locations that will be cost-effective for your business.
Even though PPC cannot guarantee you'll make a profit, it does
offer you significantly less risk than many other forms of
advertising. It's also commonly known that visitors from search
engines (PPC or otherwise) are much more likely to purchase
products or services than visitors derived from traditional ads.
Search engines provide you with highly targeted visitors. Each
click in theory comes from someone who was actively looking for
your products or services.
Paying as little as 1 cent per visitor is dirt-cheap. If you
can't make a profit paying 1 cent per visitor, then you may be
hard pressed to find many advertising options that will work for
you.
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