Adwords are a vital marketing tool used to increase your brand awareness and website traffic. A well designed Adwords campaign is crucial for the growth of your business, as digital advertising can increase website traffic up to 300%. To understand the impact PPC can have on your business, you must first learn how it works. To begin, you pay a publisher (such as Google, Bing, or Yahoo) to display your advertisement on their search engine page. This ad will include keywords and phrases that give people information about your business from the search engine results page (SERP). When people search keywords or phrases in the search engine bar looking for a certain item, your ad will appear based off of keyword relevancy. For example, if you type “marketing tucson” into Google, Amped Marketing will appear because the ad includes “marketing” and “tucson” in the title and description. Each time your ad is clicked you will pay the publisher a certain amount, and in return, you receive potential customers and information about the demographics of your audience. PPC gives you the advantage of seeing how effective your advertisement was, and help you determine what changes you need to make to reach your target audience.
There are two primary models for determining a pay-per-click: flat-rate and bid-based. To determine what model is the best fit for your advertisement, it is important to consider the potential value of a click from a given source. This value is based on the type of audience your business is expecting to have visiting the website and what you can gain from each visit. In the flat-rate model, the advertiser and the publisher agree upon a fixed amount that will be paid for each click. These amounts will be based on what content is on the pages and how popular the content is. The more popular the content is, the higher the cost per click because it will attract more valuable visitors. In the bid-based model, the advertiser will sign a contract that allows them to compete against other advertisers in a private auction hosted by a publisher or an advertising network. Each advertiser will inform the host about how much they are willing to pay for a given ad spot, and the more crucial the ad spot is for the business the more they must be willing to pay. An ad with the highest ad rank will show up first in the search engine results page. This ad rank is determined by taking the bid and the Quality Score (the quality and relevance of the keywords and ad) to see how relevant the ad is to the keywords or phrases that were searched for.