Pay per Click or PPC is a powerful search engine marketing tool that can bring lots of potential customers to your web-site in no time. However, degree of success depends a great deal on skill and understanding on advertiser's part.

Its very easy to spend a substantial sum on PPC advertising without much of a result. On the other hand, skillful use of PPC can significantly boost your on-line sales at modest budget.

Let us see how PPC work and how to make its best use.

We take Google's AdWords as an example here to explain how PPC works

There's 5 essential steps in creating and running your PPC campaign:

Google charges USD 5 or Indian Rs. 250 to open an account. There are two kinds of AdWords accounts - Pre-Paid and Post-paid. In pre-paid account, you pay Google an advance and your ad runs as long as there's money in your account. You may replenish your pre-paid account through fresh advances.

In post-paid account - you are billed at pre-determined intervals (e.g. every month).

There are various payment methods, but if you are from India - be prepared to pay in Indian Rs. through credit card (VISA/Mastercard)

You have 3 lines for your text ad - the first line or title can be 25 characters (max) and other two 35 characters (max) each (a character can be letter, number, punctuation mark or space). In addition, you will need to define a target and a URL pointing to a particular page in your web-site.

Google has strict editorial policy on format, style and text. Your ad should be easy to read, grammatically correct and free from spelling error. Avoid cryptic words, telegraphic messages and use space after every punctuation mark. Failure to adhere to AdWords editorial policy will result in disapproval of your ad.

In some countries including India - there's a second layer of review for adult content. In Google AdWords parlour - its called FamilySafe ad.

These reviews may take few days - so do not get jittery if your ad does not show-up. There's a diagnostic tool to check the status of your ad.

This is one of the most crucial steps in making your ad successful. In this step, you select keywords that will trigger display of your ad. For example, if you are selling bicycle chains - then relevant keywords could be bicycle, bicycle chain, bicycle buyers, bicycle components etc.

Whenever a surfer uses any of these keywords to search - your ad will be displayed on right hand side of search result. Your ad will be displayed on pages in Google network of web-sites that deal with any of the selected keywords (e.g. a web-site teaching how to repair bicycle).

(Google has a network of web-sites that run Google AdWords ads. This program is called Google AdSense. www.infobanc.com is part of Google AdSense Network)

Google AdWords has excellent keyword selection tools where one can develop an effective keyword list step by step. Theoretically, there's no upper limit on number of keywords, but in practice Google may not allow too many keywords that can overload its server. Normally, a handful of well selected keywords should be able to attract customers.

You may check comparative popularity of various keywords and prune your list as many times as you like.

In this step, select the amount you wish to pay Google whenever someone clicks at your ad and reaches your web-site. The rank of your ad depends upon how much CPC you have set - higher the CPC, higher will be the rank of your ad.

Normally, there's a 'minimum bid' that your CPC must exceed. If the CPC is too low, concerned keyword becomes inactive (i.e. fail to trigger your ad)

Remember, CPC is the maximum amount you are ready to pay for a click. Actual amount to be paid per click is dependant upon bids placed by other advertisers for that keyword. In practice, you may have to pay significantly less than CPC

In this final step - you set a daily budget for your ad campaign. Once the budget you have set is fully consumed - your ad will no longer appear until either the budget is increased or the next day starts.

You may start with a low budget and increase it gradually based on daily feedback. If your budget remains too low and you have selected popular keywords - the daily budget will get consumed within first few hours of day. As a result, your ad will not be visible for 24 hours, missing certain geographical regions.

A fine balance between keywords, daily budget, audience targeting and CPC is essential for optimum result. Any mismatch may result in huge spending or missing out on important audience segments.

To make your ad more effective, use audience tragetting tools such as geographic locations and language selector.

Use English as the only language for your ad to be shown. So your ad will not be visible for surfers using non-English languages.

Use geographic tool to remove select countries or regions from your ad coverage so that your ad will be visible only in select countries. For example, if you think China is a competitor of your product and USA/Europe are main markets - use geographic tool to remove China from ad coverage and include USA and Europe. Similarly, if you wish to target overseas market only, remove India from ad coverage.

Ask any marketing expert to list key success factors for any ad campaign and chances are, he/she will list audience targeting at number 1 spot.

With PPC search engine marketing - your ad campaign gets this quality by default, making your job that much easier. With speed and high degree of flexibility - its truly a formidable tools. No wonder, PPC today account for one-third of all on-line advertising spending.