Paid Placement –  when you pay to have your site listed under specific keywords, you only get charged when your listing gets clicked, hence the term pay-per-click. The amount you pay is determined by a bid system. The more competition in a keyword category, the higher the price per click will be.

Below is a screen shot of search results in Google. The organic search results are highlighted in green, and the pay per click positions are in pink. The three highest bid advertisers are listed above the organic results, and the remaining advertisers are listed in descending order on the right sidebar. Google looks at more than just the bid to determine your ad placement. Your site must be relevant to the keyword phrase you are competing in. This is to avoid search result contamination. Regardless of how high the credit card companies bid, they won’t appear under the search term ‘bubble gum’ on Google.

So, which form of traffic is better, organic or paid? Not all traffic is created equal. While organic traffic is free and pay-per-click costs money, that is not the only way to evaluate their performance. The best way to know, is to look at your Google Analytic’s report (more info on Google Analytics) and see which traffic source is generating the most time on site, lowest bounce rate, and pages per visit.  The source that brings quality visitors to your site is the best. Quality visitors spend a longer period of  time on your site and browse your site, looking at multiple pages. The longer they are on your website, the better chance you have at converting them to customers.
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