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PPC stands for pay-per-click, a model of internet marketing in which advertisers pay a fee each time one of their ads is clicked. Essentially, it's a way of buying visits to your site, rather than attempting to “earn” those visits organically. Search engine advertising is one of the most popular forms of PPC.

What is PPC?

Pay-Per-Click is a tool of Digital Marketing which is kind of advertising, used to drive more traffic to websites. In this advertising, advertiser pays a publisher for each click through auction system, where lots of different advertiser bid on keywords and compete to show their ads. These ads come in many formats like text, images, videos. Here, Advertiser (who want to drive traffic to his website); Publisher ( who publish ads i.e. Google, Facebook, YouTube, etc.) Advertisers only pay a publisher when their advertisement is clicked. PPC gives you instant result if your ad campaign is very effective and attractive unlike SEO, which takes time to rank your website on Google .

How PPC Works?

When you Google something, you often see some ads related to what you have searched. For example- you searched for facewash, when result page open, it shows some ads of facewash. How these ads come? Advertisers pay to Google so that, Google show their products in search result in the form of advertisement. There is also a process of it:-

  • First of all advertisers find some keywords, related to their product, target audience and budget.
  • Advertisers have to set a bid for each click to their website i.e. Rs5 per click.
  • Then they enter an auction in which many advertisers, who are targeting same keywords, bid against each other for each click.
  • Then publisher show the advertisement based on a bid. Suppose bid goes to Rs200 per click, then publisher(Google) charge Rs200 per click form advertiser. Those advertisers, whose budget is more and profit margin is also more , are ready to pay that much for per click because Rs150-300 per click is High Competition Keyword. Advertiser who bid Rs200 per, Google shows him in top.

While deciding he should go for PPC or not, he should consider all the factors like: profit margin; total budget; cost per piece; etc. Along with all these factors, there is also another factor on which advertiser should give his attention that is Conversion Rate.

Now understand what is conversion rate…

What is Conversion Rate?

Conversion Rate is number of people who convert into your customer from visitor when they visit your website. It is calculated by dividing number of conversions with total number of visitors. Example: MR.A has an e-commerce website on which he sells beauty care products. His site receives 500 visitors per month and 100 visitors convert into customer, the conversion rate would be 100 divided by 500 i.e. 20%.

To do business online is not easy as you have to consider various factors; decide your goal what you want to achieve by going online. On the basis of these factors you should decide what type of Digital Marketing you should choose for your business. Conversion Rate is also another important factor that publisher should consider. If his conversion rate and budget are high then he can go for high bid and can take the risk because if many people click on his website, it will also give good rank to his website on Google. For that SEO takes time. If his conversion rate is low then he should not go for high bid.