What is pay per click advertising and how can it benefit a small business?

With the new pay-per-click advertising option, small entrepeneurs and others are paying for what they're getting.

It used to be that the Yellow Pages meant placing your ad in a printed book - an ad that never changed all year long. You had several options for cost, all having to do with the size of your ad. The bigger the ad, the bigger the cost. It was that simple. So, the folks who had no money for advertising in the first couple of months of advertising didn't do so. It was that simple.

The Yellow Pages ad was a gamble and if it didn't pay off with customers coming in the door to pay for the ad then a small entrepreneur simply couldn't afford to advertise. She or he just couldnt' take the chance.

Now there's online Yellow Pages - what's commonly referred to as IYPs - Internet Yellow Pages. Dex Media in the Midwest and West has its dexonline.com, Verizon in the northeast and mid-atlantic has superpages.com, and Bell South in the southeast has realpages.com, among others.

Yellow Page advertising has gone from a print ad to the opportunity to advertise your firm online and change it as often as you like. You can add information about your latest sale, you can let consumers email you. You can even choose a tool that lets people who are long distance from your office or store call you from their computer at no charge. What a change!

What's also changed is the way you can pay for all this. And this is a great help to the little entrepeneurs - the folks who want, perhaps, to start a business from their home, who don't have a lot of overhead but still need to advertise. They can choose a pay-per-click option. What this means, simply, is that the advertiser pays the site (publication) a fixed amount for each time that a potential customer clicks on their ad. Of course, this still doesn't mean that that person who clicks on the site will buy, but if he or she has proactively searched for your company, or your company type, and then proactively clicked on your ad for further info, chances are far greater that you have a sale then if someone opens up the print Yellow Pages and ends up on the two page spread where your ad happens to be displayed with many others.

Pay-per-click is not just found in Yellow Pages advertising, of course. It can be found anywhere online you are advertising. But IYPs initiated the concept and offer it extensively.

Generally an advertiser has an option of a flat cost or a pay-per-click option. With the pay per click option the advertiser is only charged for the first click of any consumer's view of an ad. If, for instance, someone decided to take a look at Andrea's Cleaning Service and clicks on the ad Andrea is charged for a click. Then that consumer clicks on the icon that says "Sale Today", reads that and then clicks on "email us now" Andrea is not charged again for either of those clicks.

Some carriers, such as Verizon, allow advertisers to "bid" for what they will pay for a click, and depending on what others bid, this bid may or may not be accepted. It doesn't mean that one advertiser can place an ad and the other cannot. It's just Verizon's way of knowing what the market will bear and not selling itself short or overpricing and ending up with no advertisers.

No matter what, however, there is a monthly minimum total fee that Verizon will ask the advertiser to pay no matter how many clicks or not. This is considerably less, however, than the price you would pay if choosing to place an ad with the flat rate option. Of course, were the advertiser to have a heavily trafficked ad she or he may end up paying more than what would have been the flat fee cost. But for small start up firms with a low advertising budget it's a good idea to pay per click.

What's also good about it is the natural result that the advertiser knows exactly how many people clicked on to her or his ad, and when. If, for instance, there were 400 clicks in a month and only 15 sales that advertiser knows there is a problem with the message in the ad. And, unlike the Yellow Pages of old, can work to fix the advertising message - as often and as many times as he or she wishes or needs to do so.

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