Friday, October 28, 2011

Cost Per Click & Pay Per Click

Each time a searcher clicks on the advert a charge is made to the advertiser, hence the term Pay Per Click or (PPC).

Cost Per Click

This is where it starts getting complicated so you will need to pay attention! Each advertiser can set a maximum Cost Per Click for each keyword that they are using. So in the example above each of the four advertisers may have set a different maximum Cost Per Click (CPC) for the keyword "Widgets". Let's assume that advertiser at the top of the sponsored listings is prepared to pay 40 pence per click but each of the other advertisers are only willing to pay a maximum of 20p per click. The cost of a click to the top advertiser will actually be 21p and not 40p. e.g. 1p more than the next highest bidder. The cost of a click to each of the other three advertisers will be 20p. Just to make it even more complicated advertisers can change their maximum CPC for each keyword as often as they like. So in effect you have a dynamic auction taking place for keywords 24/7, 365 days!. That's one good reason for choosing the PPC Management Company to do it for you!

The Position of Your PPC Advert

This is where it gets even more complicated, as the way that Google, Yahoo and MSN determine the position of your advert varies. Broadly speaking naturally the amount of money you are prepared to spend on a click has a significant influence on the poistion of your advert. However, Google for example, also calculates what is known as a Quality Score. This is essentially a reward for relevance. e.g. The relevance of the Seach Term "Widgets" to the PPC advert to the Landing Page. Google wishes to ensure a good search experience. So an advertiser with a good Quality Score can actually pay less and get a better position than someone willing to pay more but with a poor Quality score. Managing this is another good choosing the PPC Management Company to do it for you!

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