Pay Per Click advertising is a method for either generating traffic or making money, depending on which side of the advertising you're on. PPC works for website owners and businesses looking to advertise, and the right partnership can be lucrative for both.
A business wants more traffic. They want to advertise, but they want to target a specific niche with their advertisements. The business contacts a PPC provider, usually a large site like Google. Google PPC lists the keyword they want to target and a price per click. The business then buys a certain number of clicks from Google.
Google, with the transaction on hand, begins to advertise the business in the sidebar as sponsored ads for the keyword query the business picked. Each time the ad is displayed costs the business little or nothing. Each time a user clicks the sponsored link; the business pays Google for the click. This is the origin of the name, Pay Per Click.
Eventually, the number of times people have clicked the sponsored ad reaches the point where the business stopped bidding. The business is then removed from the sponsored ads and someone else can take its place.
The Downside to PPC
Pay Per Click advertising can be tricky to master. First off, it can be very expensive. Popular, contested keywords can cost a large amount for every click. It can be very easy to slip into a bidding war in an attempt to be first on the sponsored rankings, which costs a fortune. Even with the top spot, there is no guarantee that the user who clicks the site will also convert into a customer. Many clicks result in the business paying for the traffic and making no profit from the visitor.
PPC advertising does not scale, either. If the business wants more traffic, it has to pay for more clicks. There are no volume discounts or frequent customer benefits. Finally, when the business stops paying, that traffic stops. While some visitors may have been converted into customers, the guaranteed click traffic ceases.
The Benefits of PPC
Pay Per Click traffic is guaranteed traffic. The business paying for clicks will not have to pay a cent until those clicks actually happen. If a business pays for 10,000 impressions, they are guaranteed to get those impressions, however long it takes. This means PPC schemes are very good for generating traffic instantly. This is a great benefit to new businesses that have not had the time to build a web presence and implement long-term SEO plans.
PPC is also a very fast acting source of traffic. For some keywords, the first traffic may come through within minutes of winning a bid. It is also very customizable. A business can target specific keywords for specific numbers of clicks, with a varied and responsive program that adapts to changes in marketing plan and SEO tactics quickly. This is in contrast to standard SEO, which can take days or weeks to propagate through the system and have an effect on traffic.
In the end, PPC is a double-edged sword for advertising. When used responsibly, it forms a fast and responsive supplement to a rounded SEO plan. When used improperly, it can be a terrible money-sink with no building revenue.