FAQ: What Is AdWords and PPC?

Use PPC to Get More Traffic to Your Website

By Andreas Ramos and Stephanie Cota

Summary

Pay-Per-Click (PPC) services allow you to pay to have your advertisement added to the top of a search engine. (Pay Per Click is also called Paid-Placement.) There are two major PPC services: Google AdWords and Overture.

PPC has advantages over SEO (search engine optimization).

In SEO, you tweak the HTML and hope that the search engine will index your webpages. You also hope the search engine will use your sales pitch. But you have no control over the results.
In PPC, you pay to play. You have complete control over the text that will be displayed. Placement is based on how much you pay: the more you pay, the higher your ad will be placed.

Authors

Andreas Ramos and Stephanie Cota build and manage ecommerce websites in Silicon Valley. This includes PPC, CRM, and other tools and technologies, many of which they've developed.

For more, visit CreativeConsultantsGroup.com.

What Is PPC?
How PPC Works
Content Targeting at Google AdSense
Content Targeting at Google Gmail
What Is the Future of PPC?
The Adwords User Group
Certification in Google Adwords
For More on PPC and Adwords

Copyright Notice

Andreas Ramos at andreas@CreativeConsultantsGroup.com

Trademarks

Trade names of companies and products in this document are trademarks, registered trademarks, or trade names of their respective holders, and have been used in an editorial fashion only, with no intention of infringement, nor are intended to convey endorsement or affiliations.

What Is PPC?

Pay-Per-Click (PPC) services allow you to pay to have your advertisement added to the top of a search engine. (Pay-Per-Click is also called Paid-Placement, Pay for Performance, and P4P.)

There are two major PPC services: Google AdWords and Overture.

In PPC, you have control over the text that is displayed.
Placement is based on how much you bid. The more you bid against your competitors, the higher your ad will be placed.

Let's look at an example of an AdWord. At the right side of the Google results page, there are three ads. These have a heading, two lines of text, and a URL.

These are paid ads from three companies. If you click one of these, you will go to that company's website. When you click, Google charges that company a fee for the click.

Google displays eight ads per page. If you go to the second page in Google, you'll see eight more ads.

Figure 1: In a Google search, the AdWords ads are displayed at the right.

Figure 2: Closeup of an Adwords ads.

Google Adwords vs. Overture

The first PPC service was Overture (now owned by Yahoo). Google's Adwords and Yahoo's Overture share the market.

There are differences between Adwords and Overture:

Google and Yahoo have different audiences. Google users tend to be young, university-educated, corporate, and in large cities. Yahoo users tend to be general consumers. If you are selling B2B products or consumer electronics, Google may produce better results. If you are selling travel tickets or general consumer products, Yahoo may give better results.
Google Adwords are displayed in Google (48% market share), AOL (16%), AskJeeves (8.5%), About.com, Lycos, InfoSpace, Netscape, the New York Times, CompuServe, Earthlink, AT&T, Shopping.com, USNews.com, Forbes, ABC, Economist.com, Fox, TheStreet.com, Thomson, National Geographic, LinuxWorld, AllRecipes, LowestFares.com, MacWorld, and others.
Overture ads appear in Yahoo (30% market share), MSN (30%), InfoSpace (2%), AltaVista (1%), Excite, Metacrawler, Dogpile, Web Crawler, AllTheWeb, CNN, and others.
By advertising in both Adwords and Overture, you can get 97% market coverage.

Which one should you use? Try both. See which service gives you the best results.

How PPC Works

Here's what happens when you sign up for an AdWords account at Google.

You create a small AdWords button. The AdWord has a title, two lines of text, and the URL.
You add a list of keywords. When visitors at Google search for these, your ad is displayed.
You set the maximum for your daily budget. If you set this at $2 per day, then Google will display your ads until you reach $2 in clicks and then it stops for the day. Google spreads the ads across the day, so you won't use up your entire budget in the morning.
You can set the bids for each keyword. Google charges your account for each click. If you bid 12¢, Google charges you 12¢ for the click. (The actual amount is slightly lower, due to various factors.)
The account is linked to your credit card. Google bills your credit card.
Your ad's position on the list is based on the bid. The more you bid, the higher your ads appear.
Reporting tools show you the number of clicks, the percentage of views vs. clicks, the cost per click, your ad's average position, whether the visitor was converted to buying, and so on.

There are more details. You'll learn these when you start using AdWords.

PPC Delivers Pre-qualified Traffic

PPC brings you pre-qualified traffic. This is the single most important benefit of PPC.

85% of users use search engines to find information. They will visit your website, but they are only looking for information. They are not looking to buy your products or services. You don't really want browsers who aren't going to buy.
15% of users use search engines to find products or services. PPC delivers those buyers to you. By using the keywords that they are typing into search engines, you can get them to come to your website. They are looking to buy. By using a landing page with customer-centric, targeted messaging and a one-click payment, you can sell to those customers.

The Benefits of PPC

You pay, you play. You can get the top positions at search engines.
Most of your competitors don't use PPC. They don't know about it or they don't understand it. Of some 13 million companies in the USA, only about 200,000 are using AdWords at Google (Business Week, April 2004).
PPC has tracking and report tools. You can improve what works and delete what doesn't work.
PPC really works. It brings traffic.

When you start working with PPC and look at your competitors in your market space, you'll notice most of those campaigns are not effective. Both Google and Overture are secretive and their help pages are not very helpful. If you design a good strategy, you should be able to improve traffic and revenues.

Tracking Conversions

PPC services offer conversion tracking to show the number of conversions and cost per conversion.

You fetch a bit of HTML code at AdWords or Overture and place it in your website's thank-you page. This is the page that a customer sees when they finished a purchase. This lets you see that the visitor clicked on the advertisement, came to your site, and bought the product.

Reports

PPC has reporting tools. This lets you keep track of your campaigns. You can create reports to show the results and conversion rates.

Figure 3: An example of an Adwords graph for impressions.

The graph shows the number of impressions for an ad. This shows a month so you can see the weekly cycle. Impressions peak at the middle of the week on Wednesdays and drop on weekends.

Targeting the Ads: Local or Global

Adwords allows you to target the ads to cities, regions, states, or countries. Adwords lets you select among 250 countries. Or you can broadcast your ads to Northern European countries.

For example, a dentist in Denver can specify that the ads will be seen only by users within 54 miles of her office. By doing this, the dentist avoids that ads will be shown in New York City or Moscow, so she won't have to pay for irrelevant clicks.

We use this to manage accounts for clients who have local offices. We ask them how far their customers are willing to drive, and then we broadcast the ads to a circle around their office.

PPC Ads in Various Languages

You can also target the ads to languages. You can select any of the major world languages, including smaller languages such as Icelandic, Urdu, and Slovenian.

This is a useful feature. We manage PPC accounts for clients in six languages, including Chinese, Korean, German, and Spanish. We have a number of campaigns for South America, Europe, and Asia.

Content Targeting at Google AdSense

For those who have websites, Google has an affiliate program called AdSense. People sign up and Google displays Adwords on their webpages. The ads are related to the page's text. When visitors click on an ad, Google gives part of the click fee to the website.

For example, someone is looking at a koi website. On the side of the page, Google AdWords are displayed. The visitor clicks on the AdWord. The advertiser pays a click fee to Google and Google gives part of that to the website owner.

If you have a popular webpage, add Adsense. When people click on ads, you get part of the click. You can write webpages that will get high ranking and add Adsense ads to earn money.
To see an example, go to andreas.com/faq-cell911.html and note the AdWords at the right.
To sign up for Adsense, visit google.com/adsense.

Content Targeting at Google Gmail

Google Gmail is free email, similar to Hotmail and Yahoo! free email accounts. This is another way for Google to increase the display of Adwords.

Gmail looks for keywords in emails and then inserts related advertising into the email. For example, you write to your friends about plans to go bass fishing. Gmail inserts Google Adwords advertising that are related to bass fishing.

Gmail includes Google search, so when people search their emails, more Adwords will be displayed.

What Is the Future of PPC?

In 2003, Google had only 200,000 Adwords accounts, yet they earned nearly a billion dollars.
Overture also earns around a billion dollars per year with their PPC.

There are over 13 million registered companies and 650,000 non-profits in the USA alone. Google Adwords works nearly all countries and all languages. The potential number of Adwords advertisers and amount of future revenues will be remarkable.

PPC is a billion-dollar industry with strong growth potential. Hundreds of companies will spring up to manage PPC accounts and develop PPC tools. This will create thousands of jobs.

The Adwords User Group

In September 2004, Andreas Ramos, Stephanie Cota, and Rodney Rumford founded the Adwords User Group, with news, jobs, and information about Adwords and Overture.

To join the Adwords User Group, visit Adwords-User-Group.com.

Certification in Google Adwords

In November 2004, Google introduced Certification for Adwords Professionals (CAP). If you meet various requirements and pass an exam, you will be certified to provide Adwords services.

For more, see adwords.google.com/select/ProfessionalWelcome

For More on PPC and Adwords

This white paper is an excerpt from our book, which has more on SEO and PPC., including tips and tricks. Available at Amazon and most bookstores.

See CreativeConsultantsGroup.com/seo-index.html for more.

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