The PPC model differs from the concept of paying per impression (i.e. appearance on the page) which was initially favoured by the big publishing houses as they felt forced to move more of their business online. Much the same as Cable TV, the Internet fragmented the audience and took the power away from traditional publishers.

PPC ads can be split into two types:

1. Search
2. Content

Search ads appear on the right hand side of the search results on the main search engines Google, Yahoo! and Bing. Increasingly there is some encroachment on the left hand side of the search results for some adverts. Content adverts appear in modules which a webmaster will place on their site. Webmasters receive revenue for placing these ads on their site so placement can be very eye catching to maximise review or unobtrusive – depending on the whims of the webmaster. They are distinguished as PPC ads by the phrase “Sponsored Listings”.

So how does it work?

As Google Adwords is the most popular form of PPC advertising to date, the following explanation will be based on their services.

PPC on Google works on the following levels:

• Keywords
• Ads
• Landing pages

A PPC campaign is a careful construction of good interaction between these three elements. Keywords must be grouped into relevant groups so as to display targeted adverts relating to those keywords that then flow through to landing pages relating to the keyword.

If we take the example of a sports store, the keyword “tennis shoes” would correspond to an advert saying “Best quality tennis shoes” (or whatever their selling point was). This advert would then link to a page about the tennis shoes they had available. The keyword “tennis rackets” would correspond to an advert saying “Quality tennis rackets” and link through to a page displaying the tennis rackets the company sells.

It’s all about relevance and providing a good user experience so the user looking for “tennis shoes” doesn’t end up on a page all about tennis rackets.

This article was contributed by Geoff Andrews, a search marketing consultant, known online as SEM Freak. Follow SEM Freak on Twitter or find him on Google.