PPC Advertising Model

Pay Per Click or PPC originates from the Internet advertising model: every time a search engine user clicks on a text-based PPC ad, the advertiser is billed for the cost of that click for that keyword (or search term).

PPC text ads usually appear on the right side of search engine results as ‘Sponsored Links’.

    google adwords ppc text ads

PPC advertising is a guaranteed method of driving traffic to your website via search engines. Professional PPC experts are hired to spend their days bidding on highly targeted keywords and finding the most profitable balance between the cost-per-click (CPC) and revenue generated on each keyword based on a projected conversion rate.

The more popular keywords obviously have more PPC experts or marketers bidding for them, leading to higher CPC per keyword and eventually higher overall cost of a PPC campaign. Only a well-balanced PPC ad will feature a high click through rate (CTR) with a high conversion rate and an affordable CPC.

With each successful PPC campaign, it takes thorough research and continuous testing and monitoring.

Goto.com was the first search engine that launched the PPC advertising model and was later renamed Overture.com which determined ad rank solely on a price-based bidding algorithm. Yahoo! acquired Overture in 2003 and later re-branded it Yahoo! Search Marketing (YSM).

Not long after Overture’s success, Google launched its own PPC platform Adwords added click through rate (CTR) into the ad ranking algorithm. Later, Microsoft also launched a similar pay-per-click platform Adcenter.

Adwords, YSM and Adcenter went onto become the number 1, 2 and 3 pay-per-click search engines respectively in the US market. Google Adwords Quality Score has been applied to rank sponsored ads which is Google’s key success factor comparing to Yahoo and Microsoft across the world. Currently, Baidu PPC is the number 1 PPC search engine in China.

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