PPC Methods – Flat-Rate vs Bid-Based

Pay-Per-Click advertising is offered by search engines like Google, Yahoo and Bing. When keywords are searched for within the search engine there most likely be paid results along the right hand side as well as two or three at the top of the results page.

There are two different ways to get your website listed among those search results. Google is now offering and testing a few other methods, but most companies are focusing on the following two:

1) Bid - PPC bidding is the most common way to have your ad appear in search results for a specific keyword. Google, Yahoo and Bing are hosted by individual publishers. They each use a platform where you name your bid price. This will be the cost per click (CPC) you are willing to pay. In any auction style setting the highest bidders win and their ads will be displayed at the top of the search results page. This type of campaign has to be monitored daily to keep up with competitor bids. A CPC can range from 10 cents to $30. The average cost is 50 cents.

People who have conducted a search for your keywords and then clicked on your ad are often times pre-qualified traffic and the likelihood that they will turn into customers is higher (as long as your are targeting the right keywords, when in doubt, think longer tail keywords, be more specific).

2) Flat-Rate - When a PPC ad is done at a flat-rate, this means that the advertiser and the search engine's publisher have come to an agreement on the flat rate that will be paid whenever the advertiser's ad is clicked on. This is most commonly used by a website with a very narrow focus of interest on their website.

The publisher can look at the traffic surrounding keywords and content and determine the value of the visitors that will be obtained through the PPC ad. This is how they decide on price.

In most cases bid-based campaigns are better for businesses. This allows them to measure the competition, find niches, and adjust as necessary. The downside of a PPC campaign is that it needs a lot of maintenance. If you cannot devote enough time to managing the campaign it is important to hire someone who is skilled in PPC advertising to manage it for you.