How Does Pay Per Click Bidding Work?
One of the major components of marketing today is done through advertising online. The most prominent is found with PPC or pay per click. There are several companies that deliver these types of ads online through their networks and search engines. To work with these, you’ll need to master what is known as the “bidding” system. Every ad is served based on an auction system, not a flat rate. In the past, you would have to pay a flat rate per 1,000 views, but this switches things up so that you pay as you go, based on a budget. How does pay per click bidding work? Consider the following simplified solution to help you get started.
The Keyword Search
The first thing that you need to consider is the keywords that you’re starting to target. Regardless of the company you choose to purchase advertising from, you will need to consider what keywords you would like to utilize. Once you start searching keywords, you can set up campaigns and put in bid increments based on budgets that you’d like.
You could set up a budget for a month or a daily budget. You could either deposit a lump sum, then bid on keywords to display your ads, or you could get an invoice after the ads are served, depending on the company you are working with. After you find the keywords that you want to use, you’ll be given a list of bid options.
Pay Per Click Defined
The reason why this form of marketing is called pay per click is because you are going to only pay for ads that people click on. The bid element mentioned above, is based on a range of prices for each keyword. Let’s assume that you were advertising skateboards. Skateboard related keywords could range from $0.05 to $2.75 per keyword search. That means that you will pay only when someone clicks on your ad based on that search.
If the consumer online goes to a search engine or a website serving PPC ads, you will not pay anything unless they click through on the ad that is served. Now, if you have a budget of $10 a day, you will only be able to get ads clicked through up to that amount per day. If you have it set at 1 month, you will only get certain number of clicks per month. Once that budget is exhausted, you must add more money, because your ads will no longer show up.
Billing Options Vary
Depending on the company you choose to utilize, you will have one of two billing solutions. The first is to pay up front, depositing money into your account, then setting up your ads. When someone clicks through, the company will charge your account based on the budget you have deposited. The other billing method is to get invoiced per month, where your ads will continue to run for 30 days, then the company will invoice you. Once you pay your invoice, you can restart your ads. Here’s a list of the most popular Pay Per Click search engines.
At the end of the day, your experience with pay per click bidding depends on your budget, the website you use, and the ads you want to display. Think of it like an auction, where the higher the demand on keywords, the higher the bid rate you must put in.