PPC (Pay Per Click) is a non organic way of gaining traffic to your website through buying certain keywords on a host site
. The best example would the Google's model of sponsored links where when you type a keyword into the search box and a number of sponsored links appears in a box next to the search results on the right hand side of the page. As mentioned Google operates its version of PPC under Google AdWords but many exist including Yahoo's Search Marketing service.
Unlike PPA (Pay Per Action) where the relevant website is charged the cost of the referral for any purchase or action the end user makes, Pay Per Click charges the concerning website for the referral even if no end action is taken. There are many tools available in order to maximise your return on certain keywords such as Rusty Brick which is a dynamic keyword phrase generator tool, MSN AdCenter desktop, Yahoo desktop editor and Google's AdWords generator and keyword suggestion tool which enable you to view what the most common search phrases/keywords are relating to your products or services. Creative tools also exist that allow you to view competitor's ads and allow you to model your ads accordingly.
When undertaking a PPC campaign it is vital to ensure your keywords are relevant to what end users maybe be searching for in terms of your business and is there important to understand which keywords perform better than others and to enable informed bid management and optimisation in relation to those specific keywords. Determining which keywords work better than others can be analysed through the CTR (Click-Through Rate) which measures the amount of people that click on an ad once it is displayed.
Another method of measuring the quality and relevancy of your keywords is to examine their impacts on your ROI (Return On Investment) or CPA (Cost Per Action) which measure the amount spent on specific keywords in relation to their sales volume. CPA's will vary from keyword to keyword however if there are large fluctuations between the spending on certain keywords and their ROI then this could mean further keyword optimisation is required.
When designing a PPC campaign it is important to also consider running a SEO campaign alongside as both practices will mutually complement each other and should in turn generate more traffic to your website.