Advertising your products or services on the Internet is both extremely effective and extremely competitive. There are several ways to attract traffic to your website. Pay-Per-Click is one, as well as developing an SEO, or search engine optimization campaign. Both pay-per-click and SEO are targeted to get your website placed as close to the top of search engine results as possible. It takes only minutes to set up a pay-per-click campaign versus months for a good SEO campaign.

Pay-Per-Click is a simple type of paid advertising that most search engines now offer. It requires a bid for a "per-click" basis, which translates to your company paying the bid amount every time the search engine directs a visitor to your site. There is the added bonus that when a per-click site sends your website traffic, your site often appears in the results of other search engines.

As with all marketing, there are pros and cons. If you understand the process and monitor your pay-per-click campaign frequently, it can be very effective. One of the greatest advantages is that you never have to change your web pages to alter your position in search engine results, as you must do in a typical SEO campaign. What you do have to do in a pay-per-click campaign is pay a fee.

Another advantage is the simplicity of the pay-per-click process. You just bid and you're up and running. It doesn't require any real technical knowledge, though the more you know about search engines and keywords, the easier - and more effective - the process will be.

The downside is that pay-per-click is essentially a bidding war. A higher bid than yours will lower your position on search engine results. This means that you will have to raise your bid to regain your position - depending on the popularity of your key words this may becme very expensive.

In order to determine the effectiveness of Pay-Per-Click for marketing your business, you must do some calculations to work out how much each visitor to your site is worth. You can do this value by dividing the profit you make on your website over a given period of time by the total number of visitors for that same time period. For example, if your site made $5,000 in profits and there were 10,000 hits, each visitor would be theoretically worth 50 cents. The basic formula is profits divided by visitors.

The figure of 50 cents per visitor is the point at which your business breaks even. Therefore,you are aiming at a figure less than 50 cents per click.

Often the most popular keywords cost a lot more than 50 cents a click. The only way around this is to bid less for these phrases or you will be paying too much for each individual hit.

The key to success is to learn everything you can about researching search engine keywords. There are no limits to the amount of keywords you can add to your bid because additional keywords do not add additional cost. This means lot less hassle for you because there is no need to optimize your site for a particular set of keywords.

In pay-per-click, the written description is crucial. You must understand that the object of your description is not to generally attract visitors, but to be as specific as possible so that only those visitors who are likely to buy your service or product go to your site. This description is your most powerful tool to insure that your bid is profitable.

Another essential element of pay-per-click advertising is constant monitoring of your bid. With the major Search Engines the competition for top ranking is intense, and very often you will find that the bidding price balloons too high for pay-per-click to yield a profit.

Remember - don't pay so much for your keywords that you can't make a profit.

Since losing money is not the idea, you must have a plan in place to closely track the effectiveness of your keyword. It is advisable to monitor your keywords on at least a monthly basis.

Not only is careful monitoring important, but the analysis of visitor behavior can produce invaluable knowledge about consumer motivation, habits, and trends. Expert monitoring and consumer analysis is essential to your overall business needs, and will also insure that your campaign is a success.