Welcome to a little something we like to call Technical Term Tuesday. Like most fields of endeavor, eCommerce is stuffed full of technical terms that we throw around as if they are so common that surely everyone must know what they mean. Well, nothing could be further from the truth, so in an effort to assist newcomers to our little online fraternity of Internet merchants, we’ve implemented this regular feature as a sort of ongoing primer and proof positive that there are no stupid questions.

So what is PPC? Find out after the jump…

PPC is an acronym for Pay Per Click, which is a system by which online merchants may pay for advertising on a variety of search engines. For instance, when you search for a product on Google, you’ll notice that often there is a separate block of results at the top of the page and in a sidebar on the right. These are advertisements. Merchants bid on a variety of keywords related to their product or service. The highest bidder will receive the most favorable placement.

So let’s say that you sell socks and you’ve made the highest bid for the word “argyle”… let’s say that you bid $.65. If someone goes to Google and searches “argyle”, your advertisement will be at the top of the page and if someone clicks on that ad you will automatically owe Google AdSense (Google’s advertising division) 65 cents.

Immediately, you’ll notice two things about this process. First, it can be an extremely effective way to drive traffic to your site – especially if you’re new to the scene and your organic ranking (your natural search engine placement without advertising) isn’t as high as you’d like it to be. You can simply buy your way to the top of the page. Which brings up the second thing that’s probably immediately apparent to you: PPC can become a very expensive if you’re competing for popular words (car, clothes, food, etc.) or if your program is mismanaged. After all, even after you’ve paid for the click through, you’re still gambling that the potential customer will become an actual customer, so the page they land on had better be pretty compelling and you had better ensure that you’re not overbidding for your keywords.

So, PPC can sound a bit scary when it’s broken down to its simplest elements, but rest assured that there are ways to use it to your advantage. As a matter of fact, we recommend a PPC program to most of our new online merchants. When the keywords are well-chosen and the bids are managed properly, Pay Per Click can not only put you on top of the search engine page, it can put you ahead of your competition in the race for new consumers.

Obviously, there are intricacies within the Pay Per Click system that could fill a book, but our goal with this feature is to cover the basics in an easy-to-understand fashion. If you have any further questions about PPC or how it can help your business, please feel free to contact us.