Before answering these questions, let’s take a trip down memory lane on just when did PPC (Pay Per Click) start, it’s evolution and the current status.
The first instance can be traced back to 1996 in a web directory, Planet Oasis, a division of Packard Bell NEC Computers. Even though it was a new venture and not many people were convinced about this model, around 400 brands started utilizing PPC for their advertising purpose around 1997, and were paying up something between $.005-0.25 (information from Wikipedia). In 1998, Goto.com (overture) came up a with a PPC model, and that became the basis of PPC (Pay Per Click). Before that the only existing form of advertising online was through banner ads, button ads …and that was on the basis of impressions and not clicks. The models that were available to advertisers were flat rates, CPM (Cost Per thousand Impressions) and CPA (Cost Per Acquisition) but not CPC (Cost Per Click).
According to Wikipedia, the credit for introducing PPC advertising model goes to Idealab and Goto.com founder Bill Gross.
Google started its advertising model in 1999. Google introduced AdWords in 2000, but it was a CPM (Cost Per thousand impressions) model. In 2002, Google started the PPC Ad model (Google Adwords).
Much before Google started Adwords, the PPC model was already available to Yahoo because Goto (Overture) had started using PPC for it’s advertisers from 1998. But Yahoo! started using the PPC model only after it acquired Overture in 2003.
Today, Google AdWords, Yahoo! and MSN are the largest providers of PPC ads in their network. Yahoo! And MSN (BING!) have merged to form “Adcenter”.
PPC is certainly here to stay. The biggest advantage to an advertiser is the time factor. The moment an ad is placed, it starts receiving clicks, and most of the clicks received are quite relevant because the Ads show up only when a “key word” that the advertiser has included in the campaigns has been searched for. Advertisers need to pay only if someone clicks on those ads. PPC ads are very useful if a website is new, it helps the website to establish itself by getting some quick visitors. For an established website it helps to maintain and attract more visitors and convert visitors into paying customers.
PPC ads are quite simple to set up and it requires a good strategy, planning, monitoring, and budgeting. Bid amounts, campaign budgets, daily spend, monthly spend… that is, the amount that an advertiser is willing to spend per click, can be set by the advertiser. The placement of the ads depends upon the bids and the performance of the ads.
For a long term strategy that includes gaining popularity and attracting and converting visitors, it might be more beneficial to combine PPC with other organic ways of promotions. Since PPC ads in the long run might result in a huge spend, and unless there are enough conversions from the PPC ads and a decent ROI, it may not make sense to depend only on PPC as the online strategy for attracting visitors. For most business owners this strategic decision needs to taken depending upon their objective.
The major players in this field, like Google (AdWords) and Yahoo! & BING)(Adcenter) are getting more and more equipped to handle the requirements of their clients. The technologies are getting better, fraud clicks can be tracked, ads can be set up easily, customized, stopped, paused, deleted, and restarted. Tracking and analyzing data obtained from pay per clicks is easy and convenient. (Google Analytics is one such free software that provides information and data on tracking visitors, and Ad performance).
PPC is one of the most sought after online marketing strategies because of the fast and effective results. PPC is definitely here to stay.