The number of businesses advertising online has increased significantly in the past several years. Pay Per click advertising is one of the most popular and effective advertisement model in the internet today. PPC ads are mainly published when a user uses a search engine. The ppc network or publisher then shows ads relevant to what is being searched. These ads are clickable and often take people to a sales page or landing page wherein they can read more about a product/service and purchase it outright.

There are many pay per click publishers operating today, however Google Adwords is currently the most popular service and has the most market share. PPC is run in a fast-paced medium wherein information can be accessed instantaneously. This allows you to monitor your ads performance and quickly implement tweaks to increase their effectiveness.

Raw numbers from traffic counts are the basis of measuring ad effectiveness, and will tell you exactly what types of visitors are arriving at your site. While this data will only give you an overview of the total volume of traffic, you will be able to drill down the dates of these traffic counts and match them up to the days that your ad campaigns were run.

Probably the most important data that you have to monitor are your conversion rates. A conversion rate is the ratio between the number of clicks on your ads and how many sales resulted from those clicks. Your conversion rates will determine the cost of how much it will cost you before generating a sale.

Author Joseph Thornton, of the book "The Online Advertising Playbook", states that conversion can also be in the form of a customer signing-up for your news letter, disclosing of contact information, or even downloading a free product from your site.

Another way to measure the effectiveness of a PPC campaign is to analyze different keywords and keyphrases as they relate to conversion rates. If you are able to drill down exactly which keywords and keyphrases are leading to a sale, you can optimize your website for these words and also use the data for future campaigns.

Finally, determining the rankings of your advertising segment will help you determine which placement is the best for your particular niche or industry. Google Adwords rotates the ads in its sidebar column to ensure a fair advantage for all advertisers, but there are some spots that are considered 'Featured ads'. These spots may have more value for you in a very competitive market, and can make it easier for you to decide where and how to promote your PPC campaign and achieve the best possible results.