Alex

PPC stands for pay per click advertising. It is a process of obtaining visitors by purchasing ads on search engines.

Since the late 90s, people had been using this new revolutionary advertising system to drive relevant visitors to their websites and capitalize on that same traffic by selling tangible as well as virtual products, services, paid memberships, generate leads, subscribers, and simply achieve anything they would aim for.

The beauty of PPC advertising lies in the fact that the advertiser is not required to pay for anything else other than actual clicks resulting in new visits to their websites.

Pay Per Click advertising has come a long way since then and it is now used more than ever. In fact, Google, the biggest search engine in the world today, generates more than 90% of its revenue from ad sales through their in house PPC platform better known as Google Adwords.

Google Adwords

In 2010, Google's main advertising revenue source had brought in a whooping $28 billions of dollars. More than half of that money was made by selling advertising in their own search result pages. The rest was from the third party content network which consists of webmasters who have partnered with Google in order to claim a portion of the online advertising cake by serving topically related ads on their own web pages. Google now has the biggest market share of both online advertising and search.

Usually referred to as simply AdWords, Google's advertising network has proportionally grown in popularity as did Google itself.

In the early 2000s, it was just another platform with no special benefits for anyone who was looking to advertise directly in search engines. Ever since Google became the leader in the global search market, more and more advertisers started joining the program and a lot of them specialized in PPC advertising through AdWords exclusively. There are a lot of people online who make their paychecks by teaching others about how to use AdWords effectively.

Common Terminology

If you own a commercial website and decide to test yourself with AdWords, it is of extreme importance that you first understand the common terminology, basic principles as well as rules and regulations. Not everyone can use AdWords, and surely not everyone will profit from it.

In order to be able to use AdWords, greatly profit from it and grow your business, you will have to either absorb a decent amount of information by yourself, or cut corners and pay an experienced professional to do it for you.

In every other scenario, 9 out of 10, you will only burn a lot of money with little to no profit, become unmotivated and drop the whole thing which will prove disastrous in the long run because almost anyone can profit from AdWords.

Keywords, CPC and Competition

When people type something in Google, the highlighted results that appear occasionally at the top, right and bottom of the page are paid ads.

These paid ads were set by various advertisers who are bidding on keywords, or also known as keyphrases, that they think will drive relevant visitors and make them do whatever it is that they want them to do. Usually buy products and services.

Keywords are therefore the actual input that the user types in the search box. Advertisers try to come up with the keywords by using various keyword tools, predict the user intention accurately and determine how much each visit is worth paying for. Hence the pay per click phrase.

CPC or cost per click is the maximum amount of money that the advertiser is willing to pay for each click. This is one of the major factors that determine at which position will a specific ad appear in the search results.

Google also has a thing known as the quality score where they algorithmically analyze the quality and relevancy of the landing page (the page that the ad leads to), and the ad itself. This greatly depends on the keywords that the advertiser is bidding on and the actual quality of the advertiser's website.

Competition is the approximate representation of the number of advertisers for each given keyword/keyphrase. The more advertisers that there are for a keyword, the more money you can expect to pay for each visitor delivered by that same keyword. If you are on a budget, it is highly recommended to continue keyword research until you feel you've found enough keywords to get you started while not being required to pay top dollar for each visitor.