Paid Traffic and PPC (Pay Per Click)

All forms of traffic to your website should be periodically evaluated for effectiveness

Although PPC is a fundamental part of Internet Marketing, other sources of traffic should be considered and compared. Diversification of traffic sources provide more stability, and more options to meet changing markets and needs.

Search Engine Marketing (SEM) vs other forms of Internet Marketing

Search engine marketing generally refers to getting your website found based on people typing in search phrases to search engines like Google, Yahoo, and Bing. This includes both free and paid listings.

The paid search engine listings are commonly referred to as PPC. However, PPC is really a general form of payment of internet advertising, and is not exclusive to search engines.

There are various forms of paid internet traffic

PPC is one form of paid traffic. PPC refers to Pay Per Click. You get charged when someone clicks on your ad. That charge can vary and can depend on many factors.

Another form of Internet Advertising includes ads that are charged by the number of times they are displayed to visitors. Each time an ad is displayed, it is called an impression. Cost is usually based on 1,000 impressions. This form of on-line advertising is generally referred to as CPM. The charge is the same whether a large number of visitors click through to your website or not.

You can also pay for specific space on a specific website. This can be in the form of a simple directory listing, an image ad, or a full page dedicated to your business. Often this is a fixed cost, and is paid monthly or yearly. The cost is the same no matter how much traffic your website gets from this source.

There are various sources of paid internet traffic

Search PPC includes paid ads listed in Google, Yahoo and Bing search results. These sponsored search ads show on the same page as search results. Since search engines are the primary means for people to find what they want on the internet, it is also often the most effective way to advertise.

Content Networks includes paid ads placed on a whole network of other websites. Google, Yahoo and Bing also support content networks. Content ads are placed on partner websites based on a contextual match. In other words, if your ad has relevancy to a page on a website, it will be placed. For example, if you are selling sunglasses, your ad could be placed on a page of a website that reviews sunglasses. Large content networks make is easier for your ad to be placed on many websites. Content ads can take the form of PPC or CPM.

Placing advertising on a specific websites is another source of paid traffic. This can be in the form of a directory listing or an image ad on a specific page. These usually have a specific cost per month or year.

On larger, high traffic, websites, including many "news" websites, or social network sites like Facebook, ads can be placed on various pages and be charged via PPC or CPM.

ROI for all Sources of Traffic

With all the forms and sources of traffic, how do you determine what is most effective and what is worth the money for your business?

The answer is directly related to the cost to convert a visitor to a lead or sale. For established websites, with many sources of traffic, here's a simple measure. Take the total cost of all your internet traffic, and divide that by the total number of visits to your website that resulted from your paid advertising. Now you have a cost per visitor.

You can compare all your sources using this cost per visitor, but this is not a good comparison. The cost per visitor completely ignores the quality of the visitor. You need to really determine the cost to convert a visitor to a lead or sale of specific products.

But to get a broad feel for the numbers, you can simply take the total number of sales, and divide that into the cost of all your total internet advertising. This will give you an average cost for the average sale of all your products and services. This is often useful, particularly for businesses that involve sales with higher margins and fewer products.

Determining the cost of a lead of sale, or a good measure of quality traffic, depends a lot on your specific business' products and services, how traffic is directed to your website, how your website is constructed, and how you are able to track leads and sales.

A website built with Internet Marketing in mind can provide the data needed to make cost effective decisions on where to budget marketing dollars, as well as the desired on-line visibility to bring in leads and sales.