In 1998, a small start-up company introduced the tech world to a new search engine marketing model that became the exceedingly popular Pay-per-Click (PPC) Internet advertising system. Hundreds of search engines offer PPC marketing services today, but because Google is such a dominate player in the search engine world, its AdWords PPC tool is the one that gets our dollars. Campaigning the AdWords way may seem intimidating to the novice marketer, so we’ve paired a few common questions with cut-and-dry answers to show you just how straightforward and important PPC is.

Where will my ad appear?
Sponsored ads appear both above and to the right of organic results on search engine results pages:
The top spots receive the most customer attention and are, therefore, the most coveted. Reaching the top spot used to mean spending top dollar, but Google’s now rewarding advertisers for writing relevant content, by factoring in the ad’s Click-Through Rate (CTR). If you bid $1.00 for a keyword and boast a CTR of 12%, you’ll be positioned higher than the guy who bids $3.00 and has the CTR of 0.1%.
 
How will it look?
Ads have three components—a 25-character headline, two rows of text (each row may contain about 35 characters), and one row for a destination URL:

You’ll need to fill that limited space with relevant keywords and clear, common, and specific language. You want to make sure that your ad copy targets the correct audience rather than a ragtag bunch of crazy characters who won’t buy your product. You’re paying for clicks, after all.

How much does it cost?
The beauty of the PPC campaign is that it costs however much you want it to. You tell Google how much you are willing to spend per day and on each keyword (called a “bid”). When someone searches for one of your keywords, Google takes into account the day, the time, and the searcher’s location and then compares the bids to determine which ad will be displayed. Google will show your ad as often as possible until you meet your daily budget. Hundreds of users may see your ad in a day, but you only pay the price you set if someone clicks. 

How do I decide who will see it?
With keywords and geo-tagging. Once you’ve identified your target audience, you can use a keyword research tool (like the AdWords keyword tool or Wordtracker) to generate keyword ideas and to get an idea of how popular certain keywords are. Remember that more popular keywords are usually more expensive and less effective; choosing more specific keywords will not only save you money, but may also increase the number of clicks your ad receives. Google also allows you to target your ad to specific regions, cities, and countries, lessening the chance that your ad will fall on deaf ears.

How do I know if it’s working?
An ad’s success is measured in its Click-Through Rate (CTR) and Conversion Rate. CTR is the number of times an ad is clicked on divided by the number of times an ad is viewed. For example, an ad that appears 1000 times and receives only 1 click would have a (pretty dismal) CTR of 0.1%. An ad’s Conversion Rate is based on how many people are taking action on your website (buying a product or requesting more information) once they get there via the ad. If you’re spending $.10 per click and one out of every five clicks turns into a $50 sale, that’s a pretty easy way to earn $49.50.      

How much work is involved?
The set up is fairly simple, but your efforts should not end there. In order for your campaign to be successful, you’ll need to monitor it closely. The game can change quickly, and you’ll want to keep track of the keywords that are converted into profits so you don’t continue to spend money on those that are ineffective. Google offers a couple of free tracking tools—Conversion Tracking and Campaign Summary—that can help you keep up with your campaign.

When PPC campaigns are managed successfully, they can result in heaps of revenue and brand exposure. If you’re not already investing time and funds in a PPC campaign, now is a fine time to start.