So you keep hearing about this PPC thing and you’re wondering what the heck it is.  Every time you try to get some kind of information about online/internet marketing you get to this word, and the guru’s write it like you’re supposed to know what the heck PPC means.

First of all it’s not plastic pipe.  That’s PVC.

PPC stands for Pay-Per-lick.  This is a type of advertising where your small ad goes onto a website and you pay only when someone clicks on your ad (hence, the phrase pay-per-click.)

It’s actually a genius thing and has made many people fortunes over and over again, but it’s also cost people fortunes that they really didn’t have in the first place.  How does this happen?

Well, with Pay-Per-Click you can really get handed your head very fast if you don’t know what you’re doing.  There are certain techniques, strategies, rules, and just a way of doing things that you should educate yourself on before taking part.

But don’t let that scare you away from it, because it’s one of the most effective ways of advertising that there are in the world.  Never before has there been a form of advertising where you can so quickly see results (sometimes within 5 minutes) and be able to tweak so easily your ads in order to make them increasingly convert at higher rates.

So now you’ve got an idea of what PPC is, now you may be wondering what it looks like exactly.  The fact is you’ve probably seen a zillion times on your online quest for information.  If you’ve ever been to Google, and typed in a search term, then you’ve likely seen the ads that run on the right hand side.  On Google these ads are called Adwords.

[Google is probably the most popular, widely used, and effective places for utilizing PPC but there are literally thousands of places online that use this form of advertising that should not be overlooked, such as Yahoo, MSN, Kanoodle, and various others.]

So once you’ve typed in your term, and your results show up, on the right hand side of the search results there are usually between 8 and 10 ads in a vertical row.  These are the Adwords.

The way it works is that when someone wants an ad on Google they literally bid on different keywords.  So let’s say that you were a freelance writer, and you wanted to market your services online.  You would then go to Google’s Adwords back-office and bid on the term “freelance writer” (plus all the other words that have to do with that service, but for simplicity we’ll use just one term for now).

So then you would decide how much you want to pay each time someone clicks on your ad, leading them to your site about your writing services.  Now, depending on your bid amount, this determines which place you’re in on that row of ads, as well as what page.  So basically the higher the bid, the higher you’ll be.  So the highest bidder would likely be in the first position.

Now here’s where people lose their shirt however, because there is much more to it than this.

You see there are various factors that determine your placement besides price, and the biggie is quality score.  This is Google’s way of keeping things relevant – so basically more relevant your ad is with your webpage, then the higher your quality score – which allows you to be placed higher.

Another factor is what’s called your “click thru rate” or CTR.

This is determined by the percentage of people who go to the page with your ad and click on it.  Usually a fair quality score is any above 2% which means 2 out of every 100 people that land on the page with your ad clicks it.  Now depending on the content of your ad, your conversion can go up astronomically, as well as the relevancy of your ad.

You see there are a few very important factors when it comes to PPC advertising, but once you figured them out then the world is your oyster and your business can quickly grow faster than you’ve ever imagined.

But it is important that you take the time to learn about PPC and all the little intricacies that go along with.