How Does Pay Per Click Advertising Work?

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Today’s lesson is all about understanding how pay per click advertising, otherwise known as PPC – This video is presented by Visit today to get a FREE internet marketing course.

Pay per click advertising works the same across all platforms. Meaning that platforms like Google, Bing, Yahoo all work under the same premise.

At its foundation, all that pay per click really is, is a auction where a number of advertisers bid against each other to show up on the top spot of a search engine in order to get you to see their website.

Let’s look at an example:

Let’s say that the keyword that a number of advertisers wanted to bid on was “Website Keyword Research Tool”. Now, most of us know that keyword research is one of the most important things todo before ever creating a website.

For those who don’t know, keyword research is the act of trying to find the right keywords to focus on in your website in an effort to rank organically for them in search engines. Keyword research is extremely important because if you are able to rank in the natural search results on keywords in search engines, you are able to consistently get traffic delivered to your website without paying for any marketing.

So, here is our keyword, “website keyword research tool”.
And here are the 10 advertisers that want to compete to be shown in paid search results for “website keyword research tool”. In other words, all 10 of these companies have some sort of product or offering that they want individuals who are searching for a keyword research tool to see.

In order to determine the best ad for the user, search engines look at three main factors.

First, and not surprisingly, the search engine will look at how much money each company is willing to bid for that particular keyword. Obviously, the higher the bid for a keyword, the more likely of a chance that the ad will be seen.

Second, the search engine looks at how relevant the keyword is to the ad being shown. The thought here is that if an ad includes the actual search query that the user has typed in, the more likely it is that the product being advertised is what the user wants. This makes sense because there isn’t a company out there that want to create ads that are relevant to what they are trying to sell.
Third, the search engine reviews the website landing page to ensure that the content on that page is relevant to the keyword and to the ad. This ensures that companies don’t bid on keywords and create ads are relevant and then lead the user to a page that is irrelevant to their original search query.
When a user searches for this term, in fractions of a second the search engine will look at all of the advertisers competing , all three of these factors, and serve ads to the user.

The user is then shown 10 different ads with the most relevant and highest price ad on the top followed by ads below that which are paying less money or less relevant.

From there, the user clicks, which costs the advertising website money, and then the user is brought to a landing page showcasing the product or offering that the company advertised.
So we are going to do now is we’re going to do a screen share and I will show you exactly how this process works using Google. I’m using Google because it accounts for roughly 70% of the search market share on the Internet and is the industry leader in serving ads for those who search for information on the Internet.
One thing that is important to note is that the keyword research tool that I use, which is called long tail Pro, doesn’t do pay per click advertising and has relied on word-of-mouth to grow, so it isn’t going to be listed in the search results. If you want to know more about this keyword research tool, which has a free 10 day trial, then check
So here we are in Google and we are going to search for “website keyword research tool”. Now once we do that you can see that there are numerous advertisers who are bidding on that particular keyword.

As I said before, Google has determined what ad should be shown by reviewing three main factors which are the bid, the relevancy of the ad, and the relevancy of the landing page.


Agus Wahyudi says:

can You explain to me. how ADS work on youtube video. they get money from Watching the ad or Click SKIP Ad after 5 sec?

Max _ says:

I clicked on your ad to help your channel. thanks for the info

denny de luna says:

awesome vid

bhatti bava says:

hi i have a Quinton : is it possible we can earn through browsing , like if we have a website and visitors browsing our website and making a account there . ?

Marketing Digest says:

PPC is one of the most effective online marketing strategies, but not when you don't know the proper way to create your ad and where to put it.

Chui Media says:

Very informative and helpful,thanks Sir.

LethalhitmarkZ_AoG “NF” AOG says:

dunno if I'm commenting on the right place but.. how dp you get paid from YouTube? I have made an adsense account and have 265 views or more on most videos? if anyone can help?

Elite Market Links says:

Thank you for taking the time to do this video.

Annbell Mabiru says:

Jambo, I have so many Questions, like do i need to hire one of this advertising agencies to advertise my website or can i do it myself? And how can i get to know the advertising rates for my country? (Kenya) thanks so much

amit gupta says:

I'm interested to ppc so where I'm going to learn the class can you tell me what I'm do

Dave Selvester says:

Do you actually make money from people just clicking these ads that are posted on your website or do they have to buy something on the ad for you to get paid? Like does the company that own the ad actually just pay you for when people click the ad and the more people you get to click that ad though your website means the more money you will be making? Just subscribed by the way.

bizteacher says:

Great vid. I thought that multiple clicks from the same IP address don't count though i.e. to prevent "click fraud".

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