Imagine if you could advertise only to people who have actually expressed an interest in doing business with you. That’s basically what happens whenever a prospective customer or client types a phrase into a search engine that’s relevant to your business. But how do search engines decide which sites are worthy of top placement in their search results?

Some of the results are ranked by the search engine’s computers while others are simply paid advertisements from companies willing to buy their way to the top using pay-per-click (PPC) Advertising. PPC is an online advertising format that allows you to buy your way to the top of search results pages for search phrases relevant to your business. Businesses buy advertising on specific search phrases, try running a search on a major search engine like Yahoo or Google for a common consumer product like ‘DVD players’. When reviewing the results, you’ll likely see a set of results labeled as ‘Sponsored Links’ or ‘Sponsor Results’.

Some results may appear in the same format as the main search results on the page, while others are listed within colored text boxes along the site of the page. All of those results are paid advertisements from the sites listed within the ads. The ads are ranked based on how much a business is willing to pay to advertise on each search phrase. (The ranking order in Google is a combination of the bid amount and the popularity of the ad).In the example search for ‘DVD players’ the current top advertiser is currently paying 81 pence per click, one penny more than the #2 advertiser.

The ads are purchased through PPC advertising suppliers, and the two largest happen to be owned by Google and Yahoo. Google’s program is called Adwords and displays results on Google.com, AOL, Ask Jeeves and many smaller search engines. Yahoo’s program is run by an acquired company called Overture, and the results appear on Yahoo, MSN, AltaVista, and many other syndication partners, and are then charged each time a person clicks through to their website.

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