Pay-Per-Click Domination

DaleKingDaleKing Posts: 141subscriber
edited July 2007 in Marketing
Google and Yahoo generated an estimated 5billion dollars in combined pay-per-click earnings in 2006.
5 billion dollars...wow! Yes, my friends, pay-per-click advertising is big business.
So, where and when did this whole ppc thing get started?  In thesummer of 1996, search engine, Open Text Index, began sellingweb site owners a "preferred placement" on the page. The idea,akin to that of Goto.com, also was compared to phone companyyellow pages. The company said it was responding to marketdemand for the feature.
It didn`t work out, however. Consumers complained, and thecompany dropped the idea. "We got in so much hot water [withusers] that we took it out within two to four weeks," said MarkKraatz, manager of corporate Web systems for Open Text. "Theythought it was tainting the search."
Overture was launched as search engine GoTo in 1997. In February1998, it shifted to its pay-for-placement model. The companychanged its name from GoTo to Overture in October 2001. It waspurchased by Yahoo in October 2003.
In October 2000, Google announced its new content-targetedadvertising program. Google AdWords was a huge "out-of-the-box"success, boasting well over 100,000 advertisers to date.
So, what`s the appeal of ppc?
There are several good reasons why advertisers choose to pay forvisitors to their website as opposed to the more costly, involved and often grueling method of search engine optimization.
Improper SEO will not only waste time and resources, there isnever a guarantee that the keywords your site is optimized forwill result in actual sales or conversions.
In addition, with the ever-changing algorithms of searchengines, you could spend big money on SEO that may put you atthe very top of the search engines today, and then with onemajor algorithm change, you could drop completely off the chartstomorrow. (Remember Florida?)
PPC advertising can help ensure for the most part, you get whatyou pay for and pay as little as possible to do it.
And with Google Adwords, you can literally start driving targetedtraffic to your website and making money in just a matter ofminutes.
Are there negatives to ppc advertising?
Yes, click fraud. It is estimated that 30 percent of all ppcclicks are fraudulent. In fact, according to the June 28 issueof the San Jose Mercury News, both Google and Yahoo recently hadto settle class action lawsuits regarding this very issue.
So, what is the future of ppc?
Personally, I think we`re moving closer and closer to a modellike "Cost Per Action."
What`s Cost Per Action?
CPA is an an online advertising payment model in which paymentis based solely on qualifying actions such as sales orregistrations.
Snap.com is a perfect example of a CPA model. Snap`sground-breaking Cost-Per-Action (CPA) business model enablesadvertisers to guarantee that their marketing expenditures arecost-effective. Other search engines charge advertisers eachtime a user clicks on an ad link with no guarantee that the userwill follow through with a transaction of benefit to theadvertiser.
However, Snap`s CPA system only charges advertisers when theuser actually follows through and purchases an item, fills out aform, makes a donation, or whatever criterion the advertiserestablishes for the campaign. Snap`s various features are alsodesigned to appeal to the Internet`s most frequent searchers,providing a highly focused environment in which to stageadvertising campaigns.
All you have to do is copy, paste, and configure one line ofHTML code in your conversion web page. This is the mechanism bywhich Snap knows when a conversion takes place.
In closing, so far Snap.com has solid traffic numbers to back itup. Therefore, it will be interesting to see if its CPA modelcan challenge the ppc model dominated by Google and Yahoo.
Dale KingDKing2007-7-21 12:58:46

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