Pay Per Click (PPC) search engine marketing refers to a specific type of advertising where you pay a
search engine every time a potential customer clicks on your ad. These ads appear on search engine
results pages and sometimes on sites within a search engine's network of partners.
How do Pay Per Click Ads Work?
If you look at a search engine results page (SERP) carefully, you can generally distinguish between
search results that are regular algorithmic or "organic" search listings and PPC search results which
are actually paid advertisements. The latter are generally listed under the headings "sponsored results"
or "featured listings" and consist of specially designed text, image or video ads that are triggered to
display when your target keywords are used in a search query. The PPC ads generally appear on the right
hand side and/or at the top of the search results pages.
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To appear in the PPC results, advertisers sign up for the PPC program of their choice and create short
text ads, image ads or videos describing the product or service available on their site in a way that
will best entice searchers to visit it. During the program setup, an advertiser will decide which trigger
keywords/phrases they wish to bid on and how much they are willing to pay when a visitor clicks on their
ad. Generally, the higher the bid, the more likely their ad will show above their competitor's.
The Origins of Pay Per Click Marketing
The PPC industry was pioneered by GoTo.com (later re-branded as Overture
before it was purchased by Yahoo! in July 2003). Despite their enormous success, GoTo's PPC model was met with
a lot of skepticism in the industry following their IPO in 1999. Their eventual purchase by Yahoo put to rest
any doubts that pay per click advertising was here to stay.
In October 2000, Google which was eventually to become the world's most
popular search engine, launched
their own keywords advertising model (Google AdWords), blending algorithmic search results with pay per impression
ads.
In 2002, in an attempt to compete more successfully with Overture, Google
expanded AdWords to include the pay per
click pricing model we are familiar with today. This model proved both more popular and more successful and
eventually replaced the pay-per-impression model as the default system.
By 2002, GoTo (by then rebranded as Overture), had distribution deals with an impressive range of search engines
including Yahoo!, MSN, AltaVista, InfoSpace and a number of meta search engines including MetaCrawler and Ixquick.
Overture's powerful distribution network guaranteed advertisers placement of their ads in front of a LOT of eyeballs
and it became clear that many were willing to pay big bucks for the privilege. Other major search engines also formed
successful distribution partnerships with PPC providers during this time, noticeably AOL, AskJeeves and MSN with
Google AdWords. The pay per click industry had officially arrived.
Scores of PPC search engines began to spring up following Overture's lead, however the PPC industry continued to be
dominated by the two big PPC players, Overture and Google AdWords, while Yahoo!, MSN, AOL and Google fought it out
for dominance in the general search market.
In July 2003, in a move that shocked the industry, Yahoo! purchased Overture to enable them to better compete with
market leader Google. In April 2005 they rebranded
the PPC engine as Yahoo! Search Marketing and in 2006 they
launched a revamped
version of the service, code-named Panama.
Meanwhile, in October 2005, Microsoft quietly launched
their own PPC service called MSN adCenter. An
official launch in the US,
together with a name change to Microsoft AdCenter occurred in May 2006. In May 2007, Microsoft revamped AdCenter
with new features and rolled it out
to advertisers worldwide.
Currently, Yahoo and Google continue to dominate the PPC landscape, although Microsoft AdCenter is beginning
to make an impact. Second tier PPC engines such as MIVA (formerly
Espotting and FindWhat) and Kanoodle are fast catching up to the majors.
There are now hundreds of PPC search engines worldwide, servicing global, regional and niche markets, but
only a few that have achieved a significant market share of advertising revenue. A summary of the majors are
listed below.
Yahoo! Sponsored Search
Yahoo! Sponsored Search is the current name for
what was originally called Overture Precision Match. Yahoo! Sponsored Search prominently displays your site
in search results on some of the top U.S. search properties that Yahoo! partners with. With Sponsored Search,
you set the price you're willing to pay for each customer who clicks on your listing.
Your ads appear at the top, bottom or right hand side of Yahoo search results pages under the heading
"Sponsor Results". Your ads are triggered on search result pages when searchers enter the keyword
combinations that you've bid on. Your ads can be targeted by language and country.
If you create a keyword campaign and you use the ContentMatch option, your bid also buys you top listings
on Yahoo's partner sites AltaVista,
InfoSpace, eBay, CitySearch, AllTheWeb and a range of news and content portals, such as USAToday, National
Geographic, iVillage and NBC.
Google AdWords
Google AdWords gives web site owners the ability to promote their
site when particular keyword or phrase searches are conducted at Google and partner sites. Your ads appear
at the top or on the right side of search results pages in a "call out" box under the heading "Sponsored
Links". Your AdWords text, image or video ads appear on search result pages for the keywords you buy, and
can be targeted by language and country.
With Google AdWords cost-per-click (CPC) pricing, you pay only when a customer clicks on your ad, regardless
of how many times it's shown. Google adjusts your bids automatically to keep you ahead of your competition at
the lowest possible price. Google AdWords results appear on Google search results pages, Google's distribution
partner sites, Google Gmail, and numerous content sites which are syndicated through the Google AdSense program.
Microsoft AdCenter
Microsoft adCenter is the newest kid on the Pay Per Click block.
It includes the ability to target your ads to MSN Live Search users who match
your target regional and demographic criteria.
Microsoft adCenter allows you to submit base bids for keywords or phrases you associate with your ads. This
base bid is the maximum amount you are willing to pay if any Live Search user searches for one of your keywords
and clicks your ad. You can also increase your bid in order to reach specific audience targets, which help
increase the chance your ad will appear for a user who fits your buyer profile.
Targeted bidding in the Campaigns tab allows you to add amounts to your base bid to increase the possibility
that your ad will show to searchers who fit your optimum buyer profile. You can use your bid amounts to
influence your ad's position in the Live Search results. In general, the more you bid, the higher the position
your ad will have.
You can use Microsoft's Intelligent Targeting feature to adjust your ads to match these variables:
- Geographical location
- Age and gender
- Day of the week
- Time of day (morning, afternoon, or night)
Interestingly, Microsoft pitches the ability to "build brand awareness" with their PPC program, due to the
continued exposure of your ad and brand to a large market, regardless of whether that ad attracts clicks.
This is an important feature of all major PPC programs but one that is rarely promoted by Google or Yahoo!
Perhaps brand-building is adCenter's Unique Selling Proposition (USP) because Microsoft claim to reach more
potential eyeballs than their competitors: over 99 million people per month have access to their Live Search
tool across MSN and Windows Live.
The Advantages of Pay Per Click Advertising
The growth of the search industry worldwide has created a huge market for paid search advertising and most
search engines and directories now have some type of Pay For Performance or Pay Per Click (PPC) element to them.
Pay Per Click advertising:
- Enables webmasters to target geographical and niche markets more precisely via specific search queries.
- Enables webmasters to have their page URL displayed at the top of the search engine results pages
without having to figure out complex search engine algorithms or pay an SEO expert to tweak their site
for higher rankings.
- Enables webmasters to receive new traffic instantly.
- Enables a website or offline store to be found by search engine users even if no site exists or
the site is not search engine compatible.
- Enables small businesses to operate globally and compete on an equal footing with much larger competitors.
- Enables instant sales and more measurable ROI via conversion tracking.
- Enables more precise visitor pathways to be plotted (e.g. by leading visitors to specific landing pages).
- Enables campaigns to be switched on and off on-demand to meet specific needs, search trends or specific
events (e.g. Christmas sale)
About The Author
Article by Kalena Jordan, one of the first search engine optimization experts in Australia, who is well
known and respected in the industry, particularly in the U.S. As well as running a daily
Search Engine Advice Column, Kalena manages
Search Engine College - an online training institution
offering instructor-led short courses and downloadable self-study courses in Search Engine Optimization
and other Search Engine Marketing subjects.
