How Does Pay Per Click Work? A Guide for the Beginner

So how does pay per click work? Actually we already know the answer, and it’s much simpler than you think.

Pay-per-click, or PPC, is when advertisers pay upfront for an advertisement and they are only charged for it when a user searches for the keyword and then clicks on the advertisement. The advertisement is usually displayed on the right side of search engine results and are designed by the companies paying for said advertisement.

Google AdWords is one of the more popular PPC search engines today. The process of paying for an advertisement is very similar to a bidding system. Companies are allowed to determine how much they want to pay for a search term, thus figuring out how much they want to pay for every click. Additionally, companies can target different areas for their advertisements. By doing this, they don’t have to waste tons of money by advertising on thousands of national networks when only a few local ones will do.

A risk that every company must factor is that just because a customer clicks on their ad, they don’t automatically become a paying customer. Since the company agrees to pay a fixed amount before the advertisement is placed, they could potentially lose a huge amount of money if their views don’t convert. It is always a good idea to weigh the return on investment.

PPC is a very valuable internet marketing tool. It’s a great way to target potential customers. Just keep the location of your customers and the potential return on investment in mind, and your problems will be minimal with this potential marketing tactic.

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