Pay Per Click Search Engine
Basics
Pay
per click search engines let you set up an account
with an initial deposit, and then bid for the top
positions in the search results pages for keywords
or keyphrases that you are interested in. Your bid
will typically be set in cents or dollars per
click. When a prospect clicks on your link, you
are charged the amount of that bid.
Naturally, the keyphrases that people search for
the most will command the highest bids.
Some pay per click search engines operate their
own brand of search engine. However, the bulk of
the traffic to bidding web sites doesn't come
directly from them but from partner sites. Links
to bidding web sites will appear at the top of the
search results page in partner sites, clearly
marked as "sponsor results" or "sponsor links".
For
example, Overture (formerly GoTo), by far the most
popular pay per click search engine, provides
sponsored listings to numerous partner sites,
among them: America Online, Altavista, Direct Hit,
Excite, HotBot, iWon, Lycos, Netscape, and Yahoo!
The highest bidders will achieve the top position
for their selected keywords. LookSmart, another
important pay per click search engine, provides
sponsored search results to MSN, Altavista and
About.com.
With LookSmart, you pay a flat fee per click
($0.15 at the time of this writing) and the pages
with higher relevance rise to the top.
Google, the king of search engines, has recently
launched its own pay per click service, called
Google Adwords. At the time of this writing,
Google Adwords provided sponsored search results
to America Online, AskJeeves, Earthlink, and to
Google itself. Google operates a little
differently than Overture and Looksmart, in the
sense that the top positions are determined by a
combination of high bids and high click through
rates, so nobody can lock the top positions solely
by bidding high.
One
thing to keep in mind, though, is that usually
only the top two or three bidders for a selected
keyphrase will be displayed in the search results
page of the partner sites. This means that if your
page is in fourth position or lower, your link
will most likely not be displayed on the partner
sites, and your traffic will be significantly
less. That explains the large difference in price
between a top position and a lesser one.
Since bidding for the top positions is so
expensive, you want to make your link text as
specific as possible, to attract only the most
qualified, targeted traffic. If you make your link
text too generic and bid for a top position, you
may end up receiving lots of clicks from people
who are not really interested in your product, and
who click on your link only out of curiosity. That
is also the reason why you have to select very
specific keywords.
To
know how much to bid for a top position, you have
to have an idea of your expected conversion rate
and the gross profit margin of your product. Let
say that you sell computer books at a gross profit
of $4 per book, and your conversion rate is 3%
(meaning that 3 out of 100 people who click on
your link actually buy a book). Under this
assumption, if 100 people clicked on your link,
you would sell three books, making a total gross
profit of $12. This means that, to break even,
each click must be worth $0.12. If you bid less
than $0.12 per click, you make money. If you bid
more, you lose money.
Pay
per click search engines provide you with real
time reports that tell you how much are people
bidding for specific keywords. They also provide
you with Keyword Suggestion Tools to assist you in
selecting the right keywords or keyphrases (to see
an example, check Overture's Keyword Suggestion
Tool). One of the most important functions of this
tool is to show you alternative keyphrases, which
may be cheaper to bid for than the ones you had
originally selected.
In
summary, using pay per click search engines is the
quickest and easiest way to gain the top search
positions in the major search engines. It can also
be very costly, so it is important that it be
handled properly.
Mario Sanchez publishes
The Internet Digest (http://www.theinternetdigest.net
), an online collection of
web design and Internet marketing articles and
resources. You can freely reprint his weekly
articles in your website, ezine, newsletter or
ebook.