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Pay-per-click advertising is where an advertiser places an ad that gets triggered when a user searches for predefined phrases on a search network. On a display network, ads can be triggered by visitors of a predefied profile and specific websites that matches the context of an app. The targeting method we use to specify to whom and when we display the ads evolved significantly and can now be based on a variety of behavioral and profile data.

Only when a user clicks on the ad will an advertiser be charged for the click. The amount an advertiser pays for a click, know as CPC, or cost per click, can vary significantly. It’s usually determined through a bid auction. An insurance company in the US may bid as much as $60 per click. An online gambling business in Europe might bet around 45 euros per click. And a retailer in India may bid one dollar per click.

This all depends on a variety of market factors, such as the lifetime value of the customer, the competitiveness of the industry, and of course, consumer demand. You’ll often hear that in online media buying, we refer to inventory. Now this could be the amount of search requests for a particular keyword. For example, one million searches per month, for the keyword car insurance. Or 20 million impressions per month on contextual websites that have content relating to our keyword, where a display ad can be placed.

The main characteristic that sets PPC advertising apart is that impressions do not incur charge. This means that PPC can make a significant contribution to its brand awareness without any additional cost. For example, if 10,000 users saw your display advert, but only 500 click on it, you’ll only pay for 500 clicks and not for the 10,000 ad views. PPC may seem easy and straightforward.

And yes, it is easy to get started. However, in a competitive and data driven environment, it becomes an art and a science, because you’d like to achieve the lowest possible acquisition cost and the best possible conversion rate. And you want to maintain your desired volume, and your ability to make incremental improvements as a PPC specialist can save thousands of advertising dollars for your organization. And it can connect you with many more new customers.

Zakaria Alakrhas, Fussiness Development Manager
Bravo IMS

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