If you're starting an online business, you might consider using pay per click advertising to drive traffic to your website.  When you search online using Yahoo!, Google, or other search engines, your search results will typically appear on the lefthand side of the page and pay per click advertisements, or sponsors, appear on the right. This is keyword based advertising; ads that appear will link to related products and services.

Costs for Pay Per Click Advertising

Google Adwords and Yahoo! Sponsored Search are the two leading pay per click advertising options. They work the same for the most part. With Adwords, you pay an activation fee. Yahoo! does not require a sign up fee. However, a minimum deposit is required to pay for your initial ads. With both Yahoo! and Google, you choose how much you want to pay to advertise. You can pay as little or as much as you want depending on your daily budget (that you set) and cost per click (CPC) bids. 

CPC Bids

A CPC bid is the amount you pay each time someone clicks on your ad in Google after conducting a search. This can be a search directly on Yahoo! or Google, or any website that has a Google Search box.  For example, let's say you're starting a website selling Christian homeschool curriculum. You could place a CPC bid of $0.05 for the keywords "christian science textbooks" and set your daily budget to $10.00. You could write a simple text ad with a link to your website. When someone does a search like, "where can I buy christian textbooks," your ad with a link to your website will appear on one of the pages on the left hand side of Google.  You can also choose placement targeting, which gives you the option of picking individual websites where you want your ads to appear, and even specific sections of those sites. 

Dangers of Pay Per Click Advertising

This may not be the best option for you if you're starting a website or online business. The key to making money online is driving lots of traffic to your website. This makes pay per click advertising a great choice because you can get a good traffic volume rather quickly. However, before you know it, you could spend lots of money. You have to keep an eye on your campaign and make sure that the return on investment (ROI) is good enough to keep going. For instance, if you spend $200, but only make $50 in sales, your ROI is not good, and you should consider other options. Fraud is also a concern. Anyone can (and they do) click on your ads with no intention of buying. When you hit your limit for the day, your ad is removed from Yahoo! or Google until the next day. Therefore, you have to keep a careful watch over you campaign and continually assess your ROI.

Pay per click advertising can be a useful tool for making money online. The key is to track your ROI along the way, and stop using it if you're not seeing good results.

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Daphne Mallory, Esq. is the co-owner of Mallory Writing Services and has written more than 100 articles helping home based business owners and entrepreneurs start and market their business. You can learn more about her here.