Paying For Traffic – How Does It Work?
Pay Per Click, commonly abbreviated in the world of advertising as PPC, is an advertising model used to direct traffic to websites, where publishers receive payment from the advertisers for every click made on the advertisement. Publishers are simply the website owners who use these advertisements. Private label PPC is typically an advertising discipline but there is a much more technical dimension to be understood as well as a snowstorm of data to be analyzed. Regardless of the detailed technology applied, it is much better for advertisers to understand the technicality behind the scene for a better decision making.
Private label PPC implements an affiliate model which allows present purchase opportunities wherever users are browsing. This is achieved through offering financial incentives to the affiliate sites. If an affiliate does not make any sales, then there are no costs presented to the merchant.
When a keyword query makes a match with the list of keywords of the advertisers, the website utilizing the private label PPC advertisements will display the adverts. This also happens when relevant content is displayed by the site. These types of advertisements are generally referred to as sponsored links and usually appear above, below or adjacent the generic results on the results page of the search engine.
It is undoubted that Google is the largest provider of PPC services, through their model AdWords. It operates on a bid platform where the advertiser bids for the most typed keywords by users. Since it is an auction kind of operation, advertisers will pay more for most popular keywords. However, they are not the only ones offering the services as many other websites offer the same. In a bid-based private label PPC, advertisers enter into a contract with the publisher which enables them to compete against other advertisers in a private auction managed by the publisher. The publisher is informed about the maximum amount that the advertiser is willing to pay for a particular advert spot, based on the keyword. This is achieved through an automated fashion using online tools, where the advert spot is triggered every time a user clicks on it.
Whenever the advert spot with keywords which are bid on becomes part of the search engine results, the automated auction takes place. The keyword bids that target the geographical location, date and time of the user’s search are compared and the leading bid becomes the winner. In a situation where there are several advert spots, there might be multiple winners. The position of the multiple winners will be influenced by the amount of their bid. Quality score and bid are used to determine the ad rank of each advertiser’s advert.
In order to maximize success of private label PPC and obtain higher scale, publishing websites deploy the use of bid management systems which are automated. The software allows management of bids on scale as millions of bids are managed by a highly automated software system. Every bid is set by the system based on the goals that are set for it. Some of these goals may include maximizing traffic or maximizing profit. The system is attached to the website of the advertiser, which is fed each click’s results.
It is worth noting that in private label PPC, advertisers are not creating ads or pay up front to the publishing website hoping users will see their adverts. Instead, payments are paid for results. If no one sees advertiser’s results, then they don’t pay. If users see the advert, but do not click it, still no payments will be made. Payments are liable only when the results are clicked and users directed to advertiser’s site.