How do I determine what to bid?; How does PPC advertising work?

[manolo]

How do I determine what to bid?; How does PPC advertising work?

[AussieWebmaster]

You test positions and cost per click till you get your optimum conversion... remembering getting 3 sales with a profit of $15 each is not as good as getting 20 with a profit of $5 each

[guinanie]

When a person clicks on your ad listing, they are taken to the page on your site that you selected as a "landing page". Each time someone clicks that ad, you pay the amount that you bid on that ad (thus the term, pay-per-click). The category and search terms you target will dictate how much others are bidding for the same terms. More competitive terms are usually higher bids per click. This is why we help you identify the niche terms, or the targeted terms to help attract the traffic you want on your site -- the kind that buys your product or calls you for more information, etc.
read more (http://www.thewebmark.com/pay-per-click.htm)

[AlanPalmer]

PPC advertising is a very effective form of marketing when used well, but often a waste of money what managed badly. It also requires a bit of testing (of keywords/advertisements/landing pages) to get right - as aussiewebmaster said - you need to get the balance right between keyword cost, ad position and adverts that get clicks/visits. Once you have this traffic you need to look at whether your landing page/website actually converts these visits into sales.

If you are using google adwords you could always have a good read of the info in their 'help centre' -

http://adwords.google.com/support/