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Yep, SEO stands for Search Engine Optimisation and its a process of optimising your site to make it Search Engine Friendly. Out of the main search engines, Google, Yahoo and MSN (in order of most popular) each have different techniques for deciding on what’s important and what isn't important...that’s they're differentiator if you like and why some users prefer one to another.
If you SEO your website, then you will gently move it up the listings as the various search engines start to recognise the changes to your site. Its quite a process and there is a lot to consider, its not just about meta/title tags like it kind of use to be back at the millennium. When your using PPC (Pay per click), then you are paying to be listed at the top of the results or down the sides. PPC kind of works like ebay in the sense that you bid the maximum amount that you are prepared to pay for a click through to your site. It doesn't necessarily guarantee they will buy from you, just that traffic has been directed your way. When PPC first came out, everyone put budget into it and still do. As the popularity increases, so does the maximum Cost Per Click (CPC) and as a result a click that you can't even guarantee revenue from can cost more than the margin on the product you sell. Therefore, a lot of PPC budget is now being allocated to organic SEO..bringing the website up the listings naturally or a mix of the two. Hope that helps.
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