Pay per click advertising is essentially bidding in an auction for position on the search engine results pages. You set a monthly budget, say $300, set the maximum you are prepared to pay for a click say $5 and the search engine will serve your ads (top and top/right) amongst the organic results UNTIL your budget is exhausted. At that time your ad falls out of rotation.

PPC commentators suggest you bid sufficiently high to get the 2nd or 3rd position amongst your competitors, but not the 1st position. You want your advert to appear “above the fold” (i.e. as the screen loaded, but with no need to scroll vertically) but you do not want to out bid everyone and pay a premium and exhaust your budget quickly.

Additionally, the copy you use in your ad has been shown to make a huge difference to the click through rate. You should expect to have 2 or 3 ads and test them over a couple of months. You only have room for a tiny amount of text for each ad, so having variations shouldn’t take too long to set up.

Similarly, the keywords you choose in the Google AdWords, Bing Ads or Yahoo! Search Marketing campaign managers will impact strongly on the effectiveness of your ad. You will need to research your keywords before making any decisions about what keywords are worth optimising your site around and targeting in auctions. Keyword selection tools are usually built into the campaign software and can be found in lots of places on the web.

Obviously PPC is a big revenue earner for the search engines – according to Forbes Magazine  it will earn the search companies $8 billion per annum by 2008. It means however that the best web site do not necessarily get optimal screen real estate, that this now goes to the web site owner with the highest ability to pay.

Warning 1: even if you get number 1 position it may not equate to sales. If your site does not have a competitive offer, or the call to action is missing or obscure, then you are unlikely to make a sale and therefore waste your budget. Traffic is no indicator of willingness to purchase.

Warning 2: your competitors can click you adverts and exhaust your budget. Amazing but true. Google claims to have “click fraud” mitigation practises in place, but they will not confirm what they are and therefore can not be tested and confirmed as effective.

Conclusion: PPC advertising is growing massively, and is here to stay. PPC can deliver traffic to your site – if you have the ability to pay.