EcommerceBytes-Update, Number 171 - July 23, 2006 - ISSN 1528-6703     3 of 8

Google AdWords and Other Pay Per Click Programs, Part 1

By Peter Kent and Jill Finlayson

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Pay Per Click (PPC) is big business. In fact, it's the primary manner in which Google makes money - almost all its income, 98 percent, comes from PPC - and is very important to Yahoo! as well. Pay Per Click has brought mass-media advertising to small businesses. Businesses that would never have spent money on radio, TV, or newspapers, are now spending it on PPC . . . and sometimes even making a profit!

Sometimes? Well, the fact is that PPC doesn't work for everyone, as you'll learn in this chapter. You need the right combination of gross profit per sale, Pay Per Click price, and web-site conversion ratio. If you don't have the right combination-and many businesses simply don't-PPC will lose you money. Get everything lined up just right, though, and PPC can provide a regular, predictable flow of profitable business to your web site.

What Is PPC?
Pay Per Click refers to an advertising mechanism in which advertisers pay each time someone clicks their ad. More specifically, though, these days it refers to ads displayed on search-engine results pages.

You can see an example in Figure 22-1. At the top of the search results are two small ads - shown on a light blue background in this instance. In the top-right corner, notice the words Sponsored Links. More ads appear down the side of the page - again with the words Sponsored Links, but this time above the ads.

Each time someone clicks one of these links, the company that placed the ad is charged. How much? Somewhere from 5 cents (on Google) or 10 cents (on Yahoo!) to many dollars! Some PPC ads cost as much as $50 per click, occasionally even more!

Because large PPC systems generally "feed" a variety of sites, when you buy ads through a system such as Google or Yahoo! Search Marketing Solutions, your ads may end up on many different search sites. But you may also have your ads distributed elsewhere, like on the pages of thousands of different web sites, thanks to the Google AdSense distribution program.

PPC advertising has a number of advantages:

  • It's very quick. You can start getting results from the search engines in a day or two (in theory, a few hours, but in most cases it takes a little longer to get everything sorted out).
  • It's reliable. Using PPC to get traffic to your site is very reliable. You can generate a lot of traffic, and always appear for appropriate searches in the major search engines . . . if you're willing to pay enough.
  • It's easy to measure. You can see just how much traffic you're getting, and even figure out how much of the traffic turns into business (see Chapter 24).

The PPC Systems
There are many PPC systems, but only three big ones, and a few "second-tier" systems:

  • Google AdWords Perhaps the best-known PPC system is Google AdWords ( Since Google is the single most important search engine, this system displays many millions of PPC ads every day.
  • Yahoo! Search Marketing Solutions (formerly Overture) This system is also huge, and displays many millions of ads each day ( Overture was the original PPC search-engine company.
  • MSN adCenter MSN, Microsoft's online service, actually gets its PPC ads from Yahoo! at present. However, it's in the process of building its own PPC system and by the summer of 2006 will probably have stopped using Yahoo! ads entirely.

The "second-tier" systems include services such as FindWhat (, LookSmart (, Enhance (, ePilot (, Espotting (, and Kanoodle (

Others also exist. In fact, there are literally hundreds of PPC systems . . . most of which are not worth dealing with. For example, when you figure the time it takes to configure the systems, it's not worth the small amount of admittedly cheap clicks you'll get-and some that border on the fraudulent (you'll get little or no traffic from them, but will pay a setup fee that you'll never see again). In general, you'll want to avoid very small PPC systems, and stick to the first- and second-tier systems.

Understanding the PPC Process
The basic process of using Pay Per Click is pretty simple.

  1. Decide to which pages you want to direct traffic from your ads. You can bring traffic to any page you wish, not just the home page.
  2. Register with a PPC system - you'll provide a credit card to be used to pay for the ads - and "load" the account with some money to begin with.
  3. Write one or more PPC ads (carefully follow the system's ad guidelines, or the ad won't be placed).
  4. Associate keywords with your ad - that is, decide which keywords will "trigger" your ads to appear.
  5. Place a bid on each keyword for each ad - in other words, tell the PPC system how much you are willing to pay every time someone clicks your ad.
  6. Turn on the ad campaign and wait for the traffic to appear.

About the author:

Peter Kent and Jill Finlayson are co-authors of "How to Make Money Online with eBay, Yahoo! & Google." This article is reprinted from Chapter 22, "Google AdWords and Other Pay Per Click Programs," with permission from the publisher. (c) Copyright 2006 by The McGraw-Hill Companies. You can find the book on Amazon (

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