A pay-per-click program on a search engine lets you pay a certain amount for various keywords or combination of keywords (keyphrases). The site that bid the highest and are the most relevant have their ad placed at the top of the search results either at the top of the page or on the top on the right side of the page and for most respectable search engine clearly marked as a Sponsored Link.

Pay-per-Click programs are the quickest way to reach the top of search engine results. But sometimes they can be very expensive so you want to watch your results closely when using these programs. After signing up you can start getting results in a few days. Pay-per-Click accounted for more than 40% of the advertising on the Internet in 2004.

Some advertisers spend more than $1000 a day on these programs. But if you want you can just spend $5 a day. A good thing about this program is as it is cost related you can see if immediate by spend a $100 whether it is worth spending on.

But as Pay-per-Click advertising becomes more popular, this means more people are using it and therefore bidding up higher the prices of keywords and phases.

How the Program Works
For most pay-per-click program whoever pays the most is on top. Usually the more someone bids for a keyword the higher up their website will appear. For some pay-per-click program everyone pay the same amount and the sites that the search engine decide is the most relevance is the top page.

You pay an initial deposit and then decide how much you are willing to pay each month (or daily). When the amount you want to spend each day is reached then ads for your site no longer appear for your chosen keywords.

Keywords and keywords phrases usually start at 5 cents per click and some keywords can cost $1 or more. Each time someone click on your ad then the amount the you bid is taken off the amount that you are willing to spend for a day. Often this amount that you bid can be used up in three or four hours.

Getting Value for Your Costs
One way to get value for the amount of money you spend if for instance you want to spend $10 and no more a day. If you bid say 33 cent for a keywords and other people interested in the keyword bids 11 cents a keywords and they are located three sites below you. If by biding 33 cent per keywords you $10 usually expires in about 4 hours and you got a total of 30 people who click on your ad and came to your site. To get value for your money, you can instead bid 10 cents a keywords and move below your competition who when you bided 33 cent three site below you. In theory because you have moved down 3 sites you may get fewer clicks per hour. But because you are bidding just 10 cent a click instead of 33 cents per click if you still use up your $10 a day, 100 people at 10 cents a click come to your site instead of just 30 at 33 cents a click. So in this way you get 70 more clicks on your ad for the same price.

Value of Keywords
Keywords that people bid often on and result in the highest profits are the ones that get the highest bids.

Main Keyword Programs
Some of the search engines have their own pay-per-click programs and other search engines use pay-per-click program run by a third party such as Overtures.

Overture.
Yahoo! just purchased Overture. Overture provided ads for large portal sites like Yahoo!, MSN or AOL. Altavista, Direct Hit, Excite, HotBot, iWon, Lycos, Netscape, and Yahoo!

Overture was formerly GoTo

http://www.content.overture.com/d/USm/ays/arp/?o=USCJ06&AID=9255180&PID=1305325

Looksmart
http://listings.looksmart.com/ With Looksmart you pay a flat fee of $0.15 per click and the web page that is considered to be the most pertinent will go to the top of the page. Looksmart provides pay-per-click ads for MSN, Altavista, About.com, Netscape and CNN.

Kanoodle
Kanoodle Pay Per Click search engine (http://www.kanoodle.com/) offers ContextTarget™ service. This program puts ads next to editorial content or articles and not search results. In this way you reach potential customer that are reading articles in reference to the product or products you are selling.

Kanoodle was offering new customers a $5 Kanoodle Free Trial .

Google
Google has it own pay per click service, called Google Adwords. At the time of this writing, Google Adwords provided sponsored search results to ???America Online, AskJeeves, Earthlink???.

Google gives the top position on search result page taking into consideration a combination of site that bid the highest for particular keywords and the ads that get the best click-through rate.

Bidders Displayed on Partner Sites
In some cases often only the top two or three bidders for a particular keyword or phrase is displayed on partner sites, which is why the highest bidders pay substantially more. Therefore the lower bidders can lose income become they will be displayed much less than the top two or three bidders.

Getting Value for Ads
As pay-per-click ads can be very expensive, it pays to be as specific as possible with your ad’s wording so as much as possible your best potential customer will hit your ad. If your description is not specific enough you can get plenty of hits, but not many buyers. People may click on your ad out of curiosity, but not to buy. This is a good reason to choose specific keyphrase that fit the product you are selling.

How Much To Bid on a Keyword
To know how much to bid on a keyword you have to make a calculation of what your result will be. You have to see what your conversion rate is and the profit you will receive for the product you are selling.

Take for example if you sell a product and receive a $10 profit on it, if you sell to 10 people you will receive a $100 profit. If for every 100 people who click on your ad 10 people purchase the product, then you could pay up to $1 a click and still make a profit.

Return on Pay-per-Click
Are the pay-per-click ads worth taking? I talked a friend of mine who takes pay-per-click ad on Google and Overture and pays about $100 a month. He receives between $1000 and $5000 a month for his natural health retreats and he told me he gets more than 90% of his customers from these ads.

Help Choosing Keywords or Keyphrases
Pay-per-click programs have a facility where you can type in a keyword or keyphrases and they will tell you how many people are bidding on these keywords

After you type in a keyword often you are give suggestion of similar keywords or keyphrases and how often they are typed into search engines. You may then want to use some of these keyphrases as they may give you the same or better results, but may cost much less.

You can check out the Overture Search Selection Tool here.