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This is the feature article in this week’s RealtyBiz Agent Success Newsletter.

Online advertising is becoming more popular among small businesses that want their site to display on the first page of search results for specific keywords. Pay-per-click advertising is a great way for businesses to do just that. PPC advertising allows websites to list their sites in search engines almost immediately by setting up an advertising campaign that displays your ads on the major search engines.

A PPC campaign works as follows:

  1. You choose specific keywords that are relevant to your topic and bid against your competitors for display spots in search results.
  2. You write ad copy that encourages people to click on your ad rather than all your competitors’ ads.
  3. When people click on the ad, they are taken to a “landing page” which should be a page you’ve created specifically for people who click on your ad. Your page should explain what you do, the benefits of buying your product or service, and some type of “call to action,” which may be to buy your product or fill out a form to contact you.
  4. You measure the results of you ads by analyzing specific metrics, revise your campaign, and repeat the cycle.

Search engines run your ad either above or beside the regular (organic) listings whenever someone searches for your specified keyword. If the searcher clicks on your ad, the search engine charges you an amount up to your maximum bid – the exact amount is determined by a number of factors including the maximum amount you are willing to bid, the maximum amount your competitors have bid, and how effective your ad is in getting people to click on it.

How the ads show up on the search results page depends on two factors:

  1. How much the advertiser is willing to pay – Advertisers bid on keywords much like an auction. They set a maximum amount they are willing to spend every time someone clicks on their ad. This is known as the maximum cost-per-click. Google analyzes all advertisers bidding on your keywords and sets a pricing structure. The higher you bid, the more likely you will show up in the No. 1 or No. 2 position, but the price you actually pay for each click is determined by what other advertisers bid. For instance, if you bid $1 per click but your nearest competitor is only bidding 50 cents, most of your clicks will probably cost in the 50-60 cent range.
  2. How effective the ad is at getting people to click on it – To encourage advertisers to write better ads, Google incentivizes its program by giving priority display space to ads with the highest click-through rates. A click-through rate (CTR) is the number of times someone clicks on an ad divided by how many times the ad is displayed. So if the ad was displayed 100 times and 5 people clicked on it, the CTR is 5 percent.

The Advantages of Pay-Per-Click Advertising

Pay-per-click advertising offers a number of benefits to businesses who want to get listed in search engines quickly, such as:

  1. It’s inexpensive to get started. You can get started with Google Adwords or Microsoft adCenter for a nominal $5. Yahoo Search Marketing has no setup fee.
  2. You get immediate results. It can take months of work to get a first-page ranking on Google. With pay-per-click advertising, you can set up an account in a few minutes on Google and start generating traffic to your site that day.
  3. You can target your audience. Google and Yahoo make it simple to target your audience by location. You can choose regional and city locations, or even use their local search capabilities to target prospects within 25 miles of your business.
  4. You pay for only those who click on your ad. Many online advertising opportunities ask you to pay each time they display your ad (called an impression). They usually sell advertising blocks per 1000 impressions (called CPM or cost per thousand). With PPC, search engines keep track of impressions, but they bill you only when someone clicks on your ad.
  5. You have control over how your site is displayed. Those sites that show up in the organic results have very little ability to affect how their site is displayed. Google chooses the page from your site that it calculates as most relevant to the query and pulls some content from the page to display. By contrast, with PPC advertising, you have complete control over the ad’s title, description, and even which page it links to within your website.

Pay-Per-Click advertising is a great place to start for any online marketing campaign because it gives you control over how searchers find your site and which page they land on when they enter your website.