How PPC Advertising Works?

Each of the three major search engines (Google, Yahoo!, MSN) has its own PPC advertising platform, namely AdWords, Yahoo! Search Marketing and adCenter. While the basic process remains the same for each one, there are some differences.

With PPC advertising, the advertiser:
Creates the content for an advertisement.
Selects the keywords for which that advertisement should appear.
Chooses the maximum amount they are willing to pay for a click on the advert, and this amount can be unique to each keyword they have selected for an advert.

The search engine algorithm:
Checks the advert for compliance to editorial guidelines.
Displays the advert for relevant search queries.
Determines the rank, or position, of the advert based on the advertiser’s maximum bid and the relevance of the advert (which includes factors such as CTR, and ad copy, keyword and landing page relevance to the search).

Search and content networks
Advertisers can choose to have their adverts displayed on the search network only (which means on search engines), or they can select to have the adverts displayed on the content network.

The search network will include the search engine which owns the platform (so, Google for AdWords), as well as other search engines for which that platform provides paid results (for example, currently Ask.com uses the Adwords platform for paid results).

Suppliers and search engines as of 2007. Source: Sullivan, 2007
The content network refers to web sites other than search engines which also display PPC adverts. For Google AdWords, these are the web sites and blogs which have joined Google AdSense, Google’s publishers’ platform. Google determines the content of the web site, and then displays appropriate PPC adverts. Typically, the CPC is lower than on the search network, but the CTR and conversion rate can be much lower.

What makes up a PPC advert?
Text PPC adverts follow the same basic structure:

Heading
Two lines of advert copy,
Which can be displayed on one line www.DisplayURL.com

The URL shown is not necessarily the URL that the user will click through to. When writing the copy, these are known as the display URL (what is shown on the advert) and the destination URL (what the actual URL of the page is). The display URL is sometimes also called a vanity URL. The aim should be to send users to a web page as specific to their search, and the PPC advert, as possible. This is known as deeplinking. The display URL must be the same domain as the destination URL. Google will only show one advert per display URL.

So, an advert might look like this:
Roses for Valentine’s
A dozen red roses for your love;
Fast, free delivery in RSA.
www.flowers.co.za/roses

The search engines limit the characters in each line. There are also restrictions on what you are allowed to write in an advert. Here are some of the editorial guidelines from Google AdWords:

•  Heading: maximum 25 characters
  
• Line 1: maximum 35 characters
  
• Line 2: maximum 35 characters
  
• Display URL: maximum 35 characters
  
• No repeated exclamation marks
  
• No word may be written in capitals only
  
• No nonsense words may be used
  
• No claims of “best”, “number one” or uperlatives may be used unless they can be verified by a reliable 3rd party source
  
• Product numbers may be used