Not long ago, Forbes magazine has reported that pay per click adsales are expected to increase to at least $8 billion by 2008.

There are three fundamental elements that form the basis of asuccessful pay per click ad program and they are constantmonitoring, response analysis, and refinement.

Pay per click search engines offer a way to buy your way to thetop of search results for any term you wish. With propermanagement, and a clear focus, pay per click search engines canoffer some of the most well targeted and economical advertisingon the Internet.

Pay per click advertising works through a bidding process, andthe ads appear prominently on the results pages of search enginessuch as Google and Yahoo. The highest bidder for a particularword or phrase receives top placement, and depending on theengine, the top three to five bidders also generally also receiveplacement on the first page of unpaid search results.

Fundamental questions to be addressed when formulating a pay perclick search engine strategy include the following:

When is the top pay per click bid necessary for highestconversion, and when will bidding for a second or third placeposition create a more attractive return on investment (ROI)?

How can you keep your PPC bids from cannibalizing your searchefforts on other (non pay per click) search engines?

What percentage of your pay per click budget should go to eachsearch engine?

Does either Google Adwords or Overture work better for yourparticular product or service? Or, perhaps neither one isappropriate from a return on investment (ROI) perspective.

It is of critical importance to focus sharply on identifyingthe search terms that convert most frequently for your particularsite, eliminating those that don't perform, and most importantly,calculating and maximizing your return on investment.

The cost structure of pay per click is action-driven and eachtime a user clicks your ad, the pay per click engine deducts theamount of your current bid from your account. Pay per clickoffers a high level of assurance that your ad is reaching theproper target.

Pay per click campaigns, however, are not perfect. WithoutCONSTANT monitoring, you sometimes risk incurring advertisingcosts that can spiral out of control, focusing on terms thatdon't convert well for your product or services, or falling waydown in position during a bidding war.

PPC advertising can be a great help to a site's success, but onlywith very close supervision and a thorough knowledge of theunique characteristics of each PPC search engine.

Kirk Bannerman operates a successful home based business andcoaches others seeking to start their own home based business. Visit his website at Legitimate Home Based Business for more details.