Pay-per-click advertising

These search advertising solutions will get you traffic instantly. However, it can be extremely costly.

If you are unfamiliar with pay-per-click advertising, here's how it works.  With most search engines, the first few results of a search are paid placements (someone paid to be there).  Sometimes the paid placements are on the right side of the page and not mixed with the actual search results.

A person who pays simply bids a certain amount of money to be in that first, second, or third position.  To get that top spot, they have to be the high bidder for that particular search phrase.  And each time someone clicks on their link, they are charged however much they bid.

Depending on which pay-per-click service used, people will probably pay a minimum of 10 cents per click in the search results. Amounts can get as high as several dollars - for each click. It is not uncommon for businesses to drop hundreds or thousands of dollars per day on these campaigns.

The trick to learn is ROI (return on investment). While there are a lot of ROI formulas out there, consider this: If you make money on one person out of 200 who visit your website, how much can you afford to get those 200 leads without eating too much of your profit?

For example, let's say you have products on your website that have an average profit margin of $25.00. If you spend 10 cents per click to get 200 visitors to your site, you've spent a total of $20.00. Chances are you'll get at least one sale out of those 200 visitors (this depends on many factors). So you've spent $20.00 to make $25.00. However, if you spend 15 cents per click, you'll lose five bucks.

Another example. Let's say you sell a high-end item that profits you $300.00 for each sale. Let's say 1 out of 150 who visit your site purchases this item. You could spend $1.50 per click and still make $75.00 on each sale.

It's all about the ROI.