Google AdWords™ For Dummies®, 3rd Edition

Pay Per Click: Your Online Gumball Machine

AdWords is a PPC (pay per click) advertising medium. Unlike other forms of advertising, with PPC, you pay only for results: live visitors to your website.

AdWords allows you as the advertiser to decide how much you're willing to pay for a visitor searching on a given keyword. For example, if you sell vintage sports trading cards, you can bid more for Babe Ruth rookie card than John Gochnaur card if you can make more money selling the Babe Ruth card.

For many businesses, advertising is like a slot machine: You put in your money, pull the handle, and see what happens. Sometimes you do well; sometimes you don't. Either way, you don't learn much that will help you predict the results of your next pull. PPC has changed all that for businesses with the patience and discipline to track online metrics. Just as a gumball machine reliably gives you a gumball every time you drop a quarter, PPC can reliably deliver a customer to your website for a predictable amount of money. After you run your numbers (explained in Chapter 13), you know exactly how much, on average, a visitor is worth from a particular keyword. You may find that you make $70 in profit for every 100 visitors from AdWords who searched for biodegradable wedding dress. Therefore, you can spend up to $0.70 for each click from this keyword and still break even or better on the first sale.