The concept is simple & based on bidding against competitors to position the advert in the search engine’s results pages. The higher the bid the higher the position of your advert. A PPC campaign begins with research/investigation into effective keywords & phrases relevant to the company’s products/services. When users type these words or phrases into Google it triggers an advert.The adverts are created so as to encourage the right type of user to click on them.The potential buyers are directed to your website. Google pre-determines the average cost of each keyword click called Cost Per Click (CPC) & this money is paid by the advertiser directly to Google. CPCs vary from pennies to tens of pounds.
To ensure campaign effectiveness we monitor/measure success levels in many ways depending on the campaign requirements. The campaign may be geared towards having a specific cost per sale, per conversion, for low CPCs or may be used for brand building. A rule of thumb is to compare the click costs against the profit made by the leads/ sales generated by the users visiting your website. This provides you with a formula for ROI analysis.