subject: Pay per click Advertising: Does Pay-Per-Click have a future? [print this page] Reading the Google hit piece that appeared in Barron's this week got me thinking about the whole pay-per-click model. Pay-per-click (PPC) has been around for more a decade, and while Google has made some positive changes to it, it's showing its age.
If you think of the Internet advertising process as a series of actions, it would go like this:
Impression -> Click -> Action
Back in the old days the metric was CPM (cost per thousand), and advertisers paid per impression (getting the ad on the screen). CPM favored the publisher over the advertiser, as the publisher's responsibility ended at the first part of the process. DoubleClick, an early ad serving company, came up with their DART system to match the right advertiser with the right screen in order to maximize the return on CPM.
PPC moved the metric forward in the process, measuring success (and payment) based not on how many times the ad was served, but how many times it was actually clicked. When most people think of PPC they think of Adsense, Google's contextual advertising engine. But PPC is employed in banner advertising, on big ad farms like Doubleclick and other companies, and in some affiliate programs, though the number seems to be waning.
The latest incarnation of search engine based PPC (thanks to Google), works like this: you select keywords that you think people will use to search for stuff related to what you sell. For example, if you sell pretzel dough you might want to advertise under pretzels or making pretzels or something along those lines. Selecting keywords is way beyond the scope of this article, but there are plenty of companies out there that make a living helping you pick keywords. Anyway, you then bid on those keywords and your ad is shown on the page with the search results.
With Adsense Google moved the context from the search engine results page to your web site content. It reads your site and decides what keywords to use to display advertising on your site, just as it would with a Google search.
For affiliate programs it's a little different, but the concept is the same. You choose the ads (or pay someone a piece of the action to choose the ads for you), and they get displayed on your pages. Rather than selecting the keywords explicitly, you are selecting the ads based on what you (or your agent) thinks people who have chosen to read your content may have an interest in seeing.
When someone clicks on the ad, you get paid. It's that simple.
Pay per click Advertising: Does Pay-Per-Click have a future?
