Paid Search Advertising (also Pay-Per-Click, PPC) has gained a significant influence in search engine industry over past couple of years. Whilst a traditional search engine optimisation still remains online marketing strategy number one, more and more e-marketers discovering potential of online advertising campaigns. Properly designed and managed, PPC campaign can deliver highly qualified visitors to your online shop.

1. Quick Overview

Pay-Per-Click (PPC) Search Engines are built on similar principle as auctions. The difference is that you bid on keywords -- terms people use when they search for stuff on internet.

The concept of PPC bidding is rather simple: you buy (= bid on) keywords that relate to your product. The highest bidder gets placed at top of search results, second highest bidder gets next listing and so on. Every time someone clicks through to your website, you pay amount you bid on that particular search term.

Advertising with PPC search engines basically gives you three key advantages:

• Cheap and Highly Targeted Traffic

With bidding on keywords that relates to your product or service, you actually pre-qualify type of visitors you wish to attract. You determine how much you are willing to pay (bid) for click and you only pay when someone clicks on your ad. This implies that PPC search engines can cheaply direct qualified visitors to your website.

• Fast Exposure, Immediate Profits

Traditional search engines usually take few weeks (sometimes even months) to list your website. If you are having problems to get your website indexed by search engines or if you would like to get a quick results from search engines then PPC is best alternative. Most of PPC search engines will set your website live within a couple of hours (maximum few days) and impact on your site traffic and sales is practically immediate.

• Guaranteed Top Position

Search engine optimisation is classic method of getting your website on top of search results for free. Simply said, process of optimisation involves choosing keywords that are directly related to your website and placing them meaningfully within your pages. However, as easy as this sounds, for an average webmaster this is usually a quite daunting task without any guarantee on success. This again brings me to PPC as best solution to gain high rankings on search result list. Often, by spending just few cents per click, your website can get to top three positions within 24 hours!

The best-known and most popular PPC Search Engines are Google AdWords (www.google.com/ads) and Overture (www.overture.com). Advertising with those two industry leaders will get your website lots of exposure and traffic. Furthermore, top 3 listings in Google AdWords and Overture appear on an extensive network of sites (including Yahoo!, MSN, AltaVista, Excite, and many others) so you can reach up to 80% of all active Internet users. However, at same time be prepared that their top listings tend to be rather expensive and you need to pay quite a bit.

Generally, more popular keyword you choose for bidding higher is price. You can start your bid from 1 cent per click and finish paying $5.00 (or more) for very competitive keywords.

2. Designing Successful PPC Campaigns

The golden rule of PPC bidding is: “Attract highly qualified buyers and keep your bids as low as possible”. Since you are paying for each single visitor landing on your website obviously you wish to maximize effectiveness of your PPC campaign. Let’s take a look at some basic guidelines to help you optimise your campaign and ensure your ROI:

• Determine your bid cost

The calculation of bid cost (also cost per click) requires a rather complicated formula. For purpose of this article I mention just a baseline that helps determine how much you can afford to bid:

- Firstly, you need to know conversion rate of your web site. That means how many unique visitors you need to close one sale. For example, if you need 50 visitors (= clicks) to close 1 sale then your conversion rate is 2%. If your bid is 10 cents per click than one sale has $5 of bidding cost.

- Secondly, you need to know your profit margin. If your profit margin is high enough to justify cost you can consider increasing bid and getting a higher position for your ad. This way you may increase number of clicks through your website and acquire more sales.

- Finally, calculate if extra sales justify extra cost and adjust bid accordingly.

• Focus on highly targeted keywords

As mentioned earlier, PPC Advertising can deliver cheap and highly targeted traffic to your website. To use this advantage to your benefit it is important to choose wisely keywords you wish to bid on. The key is to be specific. For example, instead of bidding on “skin care” you can consider bid on “anti ageing herbal treatments”. More targeted keywords attract more qualified buyers. It is easier to convert them into paying customers because they found exactly what they were looking for. This strategy is also a big money saver -- more specific keywords tend to be less expensive than general ones everybody is biding on.

• Customize your advertisements

So what are benefits of free traffic programs? Well number 1 benefit is that it will boost your traffic. This is most obvious benefit. But biggest benefit of free traffic programs is that more traffic you send to your site more popular it looks to some search engines.

http://alexa.com actually ranks your site depending on how much traffic it receives. You can actually go to alexa and download traffic and stats buttons or logos to put on your site. This will show you and your users how much traffic you are getting and how many people link to you.

Other search engines such as Ask jeeves , Lycos , MSN , and others use alexa traffic ranking from your site to help determine how high in their search results your site will be placed. It is also assumed that Go ogle also uses alexa traffic ranking in its ranking algorithm.