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What Should You Know About Search Engines and Pay-Per-Click?

by: Chet Childers

Here’s a fact for you, 85 to 95% of websites are found through a search engine. You may have the most incredible website on the Internet, but it will receive little or no traffic without search engine visibility and ranking. Can you imagine a billboard in the Sahara desert? Who sees it?

So, how will searchers find your website? What types of search engines could they use?

Search engines fall into two categories. The first is referred to as natural, organic or standard. The second is called pay-per-click, paid inclusion or paid placement.

Natural, organic and standard are interchangeable terms describing a search engine that bases its search rankings on a ranking algorithm. The algorithms involve a number of criteria and parameters, all relating to the content of the website, the website’s size, the number of incoming links to the website, and the content’s relevancy. You will hear terms such as keyword relevancy and keyword density to describe various components of the algorithms.

For the standard search engines, you, your webmaster or hired search engine optimization specialist could spend considerable time optimizing your website to achieve top rankings. The goal is for your website to appear on the first or second page of the search engines’ results when your target user searches keywords or keyword phrases.

The good news is rankings on standard search engines are free. The downside is the tremendous amount of time and effort required to achieve exceptional search engine rankings.   Let’s confess to each other that top rankings on standard search engines can be tough and timely to achieve!

The interchangeable terms pay-per-click, paid inclusion or paid placement describe a search engine that bases its search rankings on a "bid for position" basis. Simply stated, you "bid" a price to be in a specific position of the search rankings for a particular search keyword or keyword phrase. For example, the #1 position on the search phrase "pay per click" recently required a bid of $3.55 per click, whereas the 15th position required only a bid of 55 cents. As a result, your differential website advertising costs between position #1 and #15 can be considerable.

With pay-per-click search engines, your ability to bid high can dramatically impact your website's search engine ranking when the search results display website domain names or URL's for the search keyword or keyword phrase. The benefit is your website gains visibility with the searcher, but you are not charged the pay-per-click "bid" until a searcher actually clicks on your website domain name or URL displayed in the search engine results. The selection of your website in the search engine results is called a click-through.

In general, click-through rates range from 1% to 5% of the number of impressions. What is all of this? A click is when a searcher selects or "clicks" your pay-per-click ad. An impression is one display of your pay-per-click ad on the search engine results. So, the click-through rate is a measure of the total number of ad clicks versus the total number of impressions in a period of time:

    Click-Through Rate % = Total Number of Ad Clicks / Total Number of Ad Impressions * 100

Let's do the math for our #1 position bid of $3.55 per click. In September, 2004 there were 21,535 searches for "pay per click." First, let’s assume a 1% click-through rate. The top bidder spent $764.49 (21,535 * 1% * $3.55). Now, at a 5% click-through rate the top bidder spent $3,822.45 (21,535 * 5% * $3.55). Budgeting and controlling marketing expenses with such a broad range of potential costs could be tough. Plus, such costs could be the tip of the iceberg. We still must consider derivatives of the keyword or keyword phrase. So, was being #1 worthwhile? That depends on your website’s cost per visitor, conversion rate and profit margin of your product or service.

From what we’ve covered so far, you should realize you can achieve a top or high ranking through the pay-per-click search engine. But, a high ranking will cost money and these costs can be volatile. Meanwhile, the standard search engine remains free.

However, pay-per-click offers one significant advantage. It enables you to achieve website visibility with a high ranking instantaneously or overnight. If you want to draw traffic to your website fast for any reason, pay-per-click can make that happen. Remember, maximizing the standard search engine process takes time!

Let’s summarize the pros and cons of pay-per-click marketing:

Pros

* Improves your website’s ranking and traffic quickly.
* Tests the marketability of your product or service swiftly.
* Determines the ability of your web site to convert visitors to a call to action or make a purchase promptly.
* Identifies which keyword phrases will provide the best conversion rate rapidly.
* Provides complete control of the search engine campaign, both position and cost.

Cons

* Cost

Many individuals criticize pay-per-click because of the costs involved. But, have you really thought about the cost issue? Unless you or someone in your organization has expertise in search engine optimization, you’ll probably pay several thousand dollars in fees to a search engine optimization specialist to improve and optimize your website to achieve higher rankings in the standard search engines. So, my question to you is. Are the standard search engine rankings really free?

At the end of the standard versus pay-per-click search engine debate, it’s like the old saying, "There is no such thing as a free lunch." Or, it’s like the old commercial, "You can pay me now or you can pay me later." The reality of the debate is you must evaluate your specific website situation and utilize the search engine approach that maximizes your website promotion goals and investment.

About the author:
Chet Childers is a successful Internet marketer utilizing both pay-per-click marketing and search engine optimization to increase website traffic. His clients’ websites promote products such as window treatments, furniture, medical uniforms, swimming pool tiles, capital equipment, computer software and much more. To learn more, visit and enroll in our free e-course.

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