Pay per click advertising means paying the search engines to show your advert when the searcher puts your chosen key words into the search box. The adverts appear at the top or right hand side of the natural listings and are labelled as 'sponsored'.  The cost is based on the number of people who click on your advert to reach your site, and the rate per click you have offered to pay the search engine.  Prices depend on competitive bids with the minimum being £0.10.

This is the most direct method of attracting visitors. By careful selection of the key phrases on which you choose to advertise, you can ensure that the resulting visitor is specifically interested in your product or service. Clearly, however, that will include people who are just searching for information about your product field rather than just those who are in 'buying mode'. It will also include your competitors who will naturally  be interested in your strategy too.

The most important element in determining your budget, is not so much the cost per click as the proportion of clicks that result in the action you want. So for example, if your aim is to get job seekers to register and you had agreed a cost per click rate of £0.50, the actual cost per registration would be £5.00 if 10% of your visitors went on to register or only £2.50 if 20% 'converted'.

The only way to determine your real cost per sale is to suck it and see. Before you start you must set up your website statistics service to ensure you get the information you need. With the right information, you can gradually refine your choice of key words, the adverts you use and the content of your site to optimise the result. Without the information, you will never know what you are missing!

Normally PPC advertising will be your most expensive promotion channel per visitor.  It should also be profitable nonetheless.  So after the test, it should probably become an ongoing part of your promotion and also the bench mark against which to measure other channels.  The cost of search engine promotion, for example, and paid directory submissions can be justified by their effect in bringing down the average costs of a lead or sale.