Google AdWords Select (http://www.google.com/ads) and Overture (http://www.overture.com) are two leading Pay-per-click players, but there are over 400 search engines using this model. They all work in more or less same way. You bid on keywords and phrases that your target audience may use to find your site in search engines. When they do a search for those keywords your ad or "sponsored listing" appears in a special section near top or side of search results.

The position of your ad depends on amount you bid and competition for your keywords, so selecting best keywords is essential. You pay only when someone clicks through to your site.

What Does it Cost?

You can set up your PPC campaign with Google AdWords Select for just $5.00, with no monthly minimum. Overture requires a $50 setup fee and a $20.00 monthly minimum. Both allow you to set a maximum monthly budget. The cost is a function of your keywords, your bid amount, and your click-thru-rate.

Make sure that cost of acquiring a customer through your PPC campaign is less than your average profit from each sale. Overture has a return on investment (ROI) tool to help with this calculation.

Here's an Example

The term hit refers to a request for a file on your web site. When someone visits your web page, they request your URL, but in order to see page, they also have to get all graphic files that are located on your page. So, one visitor to your page may be requesting 25 different files, and thus you have 25 hits.

The counters of Internets early days only measured whether someone requested a particular page where counter was located. They did not give any indication of what visitor activity was like on other pages of site. Those counters often did not differentiate between a "unique visitor" and total visitors. The number of unique visitors is number of different people (as measured by their computer's distinct IP number) as opposed to total visitors, which could even be only one person visiting page many times. (I used to visit my first site a few times a day to see how I was doing!)

So what then is professional and up-to-date way of gathering statistics and what are statistics that really count?

Web servers keep logs of all visitor activity. When someone visits your site, he or she requests various files on site. The log records all of these requests and records other vital information as well including: referrer page (or last page where surfer was prior to entering your site), what operating system surfer is using, what screen resolution he or she is using, what search terms he or she made to request your site and a lot of other vital data that could be crucial to your ability to have Internet success or failure.

If you would look a raw logs of your site you will see a long text file with date of each entry and would see a few interesting items but you would not be able to put them together very well due to volume of information. (a line of text for each file requested). There are log analysis programs that do this work for you. One way of using them is to download log file from your server. Your host should be able to tell you where file is located, and you can retrieve it using an FTP program. The log file is then fed into analysis program and results are generated. There are many programs that do this work. I got started with a simple program (open web scope-and there is free version available). Alternatively, your host may have an analysis program preinstalled on server, and results may be able to be seen online (some hosts have Webalizer program installed for their client's use)

So what are things to look for when analyzing logs?

You should look for number of unique visitors per day. This will give you an idea of how many people are viewing your site and will give you a broad overview of how you are doing.

Another indication of overall activity on site is number of "page views" per day.. Unlike hits, page-views refers to distinct html files or pages that were requested. Suppose you get 200 unique visitors per day, and there are about 2000 page views per day, then you can infer that your average visitor is viewing 10 pages of your site.