Pay-Per-Click marketing has become an online phenomenon, with marketers only paying for traffic they receive. As Internet marketing has evolved, pay-per-click is seen by many as the middle ground between paying per impression and paying per sale. Advertisers only pay when they receive traffic that may or may not be targeted.The pay-per-click advertisements are usually displayed with the advertisement from the highest paying bidder in the top position.
Navigating the complex web of Internet marketing, publishers and marketers are often confronted with terms that seem foreign. This simple guide will assist you in understanding the Pay-Per-Click marketing model.
An easy way to explain this is to remember that the top results (skyline) of Google and the sponsored results on Google and Yahoo are all paid listings.
Recently the social network giant Facebook has started offering a pay per click advertising model. What is exciting about this is that one can not only target keywords and regions as in the Google model, but also prospective clients by their interests, age, marital status etc. The model is not as advanced as Google yet in its tracking, however it is generally cheaper and can with the right product give far better conversion rates.
Pay Per Click Definitions
Bid - The amount that an advertiser is willing to pay for a click on a specific keyword.
Budget - The amount of money that an advertiser sets aside for an advertising campaign. Different publishers allow for advertisers to set daily, weekly or monthly budgets.
Clickthrough Rate (CTR) - The percentage of clicks on a link. This is usually a percentage based on the total number of clicks divided by the number of impressions that an advertisement has received.
Conversion Rate - The relationship between visitors to a web site and actions considered to be a "conversion", such as a sale or request to receive more information: the percentage of people whose clicks have resulted in a sale or desired action in relation to the total number of clicks on an advertisement.
Cost Per Click (CPC) - The cost or cost-equivalent paid per click-through to an advertiser's website.
Cost Per Thousand (CPM) - The amount an advertiser pays for one thousand advertisement impressions, regardless of the consumer's subsequent actions.
Delisting - The removal of a listing as a result of inaction or poor performance.
GeoTargetting - An advertisement targeted at a specific geographical region, area or location.
Impressions - The number of times an advertisement is viewed by web surfers.
Keywords - Search terms or phrases that are related to an advertisement or ad copy.
Landing Page - The specific web page that a visitor ultimately reaches after clicking an advertisement. Often, this page is optimized for a specific keyword term or phrase.
Linking Text - The text that is contained within a link.
Pay Per Click (PPC) - Advertising model in which advertisers pay for click-throughs to their website. Ads are served based on keywords or themes.
Rank - How well a particular web page or web site is listed in a search engine or advertising results.
Return On Investment (ROI) - The percentage of profit that results in a marketing or advertising campaign. Naturally, advertisers want the amount of money made to exceed the money spent.