Over the past ten years, the Internet has revolutionized the way that people conduct business. Although big companies have a considerable business presence on the Internet, the structure of the Internet makes it possible for small businesses to compete on equal footing. Amazon may have a famous Website, but there is nothing to stop Bob Smith from building a competing Website called BobSmithsBooks.com. With the Internet, there is space for everyone to do business.

Having a presence on the Internet hardly guarantees business success, however. In order to make sales, you have to have visitors come to your Website. Drawing visitors, or "traffic", is probably the greatest problem that most Web site owners encounter when putting their business online. One can promote a business using common offline methods, such as newspapers or magazines, but most Website owners would prefer to try to attract visitors that are already on the Web. For drawing customers who are already on the Internet, there may not be a better or faster method of acquiring traffic than pay per click ads.

Pay per click, or PPC advertising, is an advertising system where businesses can purchase advertising space with the major search engines. When a Web surfer does a search using Google, for instance, paid advertising appears right alongside the free search results that Google displays. Businesses bid for prominent ad placement on these search results pages by placing bids on the search keywords themselves. The companies pay the search engines each time a visitor clicks on the link in one of the ads. Depending on the search topic, the bids may range from just a few cents to as much as one hundred dollars per click.

There are a number of benefits to using PPC advertising instead other media:

The results are very quick. With Google's Adwords system, companies can compose their ad and have it displayed to Web surfers in no more than five minutes. No other ad medium offers the chance to have advertising shown to potential customers as quickly as pay per click.

Advertisers can set daily, weekly, or monthly budgets. You can limit your advertising expenses to the amount of money that you can afford. If you can only afford to spend $100 each month on ads, you can decide if the ads are to be shown all at once or spread out over the day, week or month.

The advertiser selects the price. Companies bid on the amount of money they are prepared to pay for each keyword. This allows companies with modest budgets to still have their advertisements displayed alongside the ads of businesses with deeper pockets.

The benefits of PPC advertising are clear. You can frequently have visitors at your Website in a few minutes and you can spend as little or as much money as you like.

There are some potential problems with pay per click advertising, though:

Not all search terms produce good results. Pay per click advertisers need to carefully monitor the performance of their advertisements to ensure that the terms they are bidding on generate both traffic and sales. You may find yourself bidding on terms that bring visitors to your site but do not result in sales. The Internet is fiercely competitive. If you are placing bids on terms that are especially competitive, you may find that you will have to pay several dollars per click when your budget may only allow a few cents. Prices vary widely among different search terms. If twenty advertisers all outbid you, your ads may be shown on a page where few people will see them.

While the PPC advertising model is quite successful, it can also provide a good opportunity to spend a great deal of money on advertising without a lot to show for it. Anyone who is considering trying their hand at pay per click advertising should probably start with a modest budget and be willing to engage in a lot of experimentation in order to find the ads and search terms that work best.

Copyright 2008 by Retro Marketing. Charles Essmeier is the owner of http://www.doublingstocks-review.net, a site that reviews the Doubling Stocks newsletter, as well as http://www.workingfromhome-review.com, a site that reviews Ewen Chia's product called Working From Home.
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