How Does Pay Per Click Advertising Work?

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Today's lesson is all about understanding how pay per click advertising, otherwise known as PPC - This video is presented by http://www.OneHourProfessor.com. Visit today to get a FREE internet marketing course.

Pay per click advertising works the same across all platforms. Meaning that platforms like Google, Bing, Yahoo all work under the same premise.

At its foundation, all that pay per click really is, is a auction where a number of advertisers bid against each other to show up on the top spot of a search engine in order to get you to see their website.

Let's look at an example:

Let's say that the keyword that a number of advertisers wanted to bid on was "Website Keyword Research Tool". Now, most of us know that keyword research is one of the most important things todo before ever creating a website.

For those who don't know, keyword research is the act of trying to find the right keywords to focus on in your website in an effort to rank organically for them in search engines. Keyword research is extremely important because if you are able to rank in the natural search results on keywords in search engines, you are able to consistently get traffic delivered to your website without paying for any marketing.

So, here is our keyword, "website keyword research tool".
And here are the 10 advertisers that want to compete to be shown in paid search results for "website keyword research tool". In other words, all 10 of these companies have some sort of product or offering that they want individuals who are searching for a keyword research tool to see.

In order to determine the best ad for the user, search engines look at three main factors.

First, and not surprisingly, the search engine will look at how much money each company is willing to bid for that particular keyword. Obviously, the higher the bid for a keyword, the more likely of a chance that the ad will be seen.

Second, the search engine looks at how relevant the keyword is to the ad being shown. The thought here is that if an ad includes the actual search query that the user has typed in, the more likely it is that the product being advertised is what the user wants. This makes sense because there isn't a company out there that want to create ads that are relevant to what they are trying to sell.
Third, the search engine reviews the website landing page to ensure that the content on that page is relevant to the keyword and to the ad. This ensures that companies don't bid on keywords and create ads are relevant and then lead the user to a page that is irrelevant to their original search query.
When a user searches for this term, in fractions of a second the search engine will look at all of the advertisers competing , all three of these factors, and serve ads to the user.

The user is then shown 10 different ads with the most relevant and highest price ad on the top followed by ads below that which are paying less money or less relevant.

From there, the user clicks, which costs the advertising website money, and then the user is brought to a landing page showcasing the product or offering that the company advertised.
So we are going to do now is we're going to do a screen share and I will show you exactly how this process works using Google. I'm using Google because it accounts for roughly 70% of the search market share on the Internet and is the industry leader in serving ads for those who search for information on the Internet.
One thing that is important to note is that the keyword research tool that I use, which is called long tail Pro, doesn't do pay per click advertising and has relied on word-of-mouth to grow, so it isn't going to be listed in the search results. If you want to know more about this keyword research tool, which has a free 10 day trial, then check outwww.OneHourProfessor.com/keywordtool.
So here we are in Google and we are going to search for "website keyword research tool". Now once we do that you can see that there are numerous advertisers who are bidding on that particular keyword.

As I said before, Google has determined what ad should be shown by reviewing three main factors which are the bid, the relevancy of the ad, and the relevancy of the landing page.