Pay Per Click Application - Report Example

Pay Per Click Outline Introduction Definition of PPC Application of PPC Benefits of PPC Disadvantages of PPC Lifespan of PPC Alternative to PPC and Technological Advancements that may Make PPC obsolete Key Players Phase of PPC Conclusion Pay Per Click Advertising Introduction Pay per click (PPC), also referred to as cost per click (CPC), is an internet advertising model where advertisers pay an agreed upon amount to the publishers (website owners) each time their advertisements are clicked (Wikipedia, 2011). Rather than using the bidding system, the website owners commonly charge the advertisers a fixed amount or price for each click made on their advertisements. Therefore, it is important to note that the payment is made each time the advertisement is clicked but not each time it is displayed or a sale is made (Digital River, 2009). Advertisers who are ready to spend large amounts of money for relevant advertisements are usually listed first, before those who spend less. However, although the publishers design the PPC networks, advertisers typically set them up on the networks and define how much they are able to pay for each click. The advertisers also identify keywords, phrases, groups or categories in which they would like their advertisements to appear (Digital River, 2009). Among the pay per click providers include Microsoft Adcentre, Yahoo Search Marketing, and Google Adwords (Payperclickguide.com, 2011). This paper discusses PPC in light of its application and benefits to advertisers. Pay Per Click Pay per click (PPC), is an internet advertising engine used to direct traffic to the websites and the advertisers are to pay the website owners when the ads are clicked. The adverts are displayed on the websites with the related contents. This concept was founded in 1998 by Jeffrey Brewer of Goto.com which is part of Yahoo, through a presentation in California USA. Since then, other companies including Google and Yahoo have used the concept in advertising products for customers. Since 2003, different pay per click tools have emerged as a result of completion between Yahoo and Google. The different PPC tools used includes, Google Adwords, Microsoft adCenter and Yahoo Search Marketing among many others. Application of PPC When PPC first started it was pretty simple, one would pick a single term, say, “fruit”, and set a bid, say $0.05. The bid, in this case is, how much one would pay to have a textual ad show in the search results for the word “fruit”. If the user typed, for example, “bowl of fruit”, the ad would not show. That is just how it was at first. The first platform established at this time was Overture. Overture supplied ads on the Yahoo Platform which was the biggest at the time (1999). One may need to run reports often to see if someone else has out bid them on a keyword. This would prompt me to raise my bid. Bidding wars were common in those days. Once in a while a rogue advertiser would get one keyword with some outlandish bid and one would need to wait them out. The ad copy during these days was written specifically to the key word or key word term. In 2003 when Google came to the scene, the ads started to get more homogenous. One text ads would represent many terms, thus lose the effectiveness of the repetitive terms in the copy. At this point advertisers preferred to break out high traffic terms so that they could serve a more specific ad to a group of keywords. At this point the ability to add specific URL’s to the ads started becoming prevalent. This meant if one had “bowl of fruit” on their website, they could have the person be directed to the page right from the PPC ad. This highly relevant landing page would increase chances of converting the person to a buyer. Content ads become another venue for PPC campaigns content ads are generated though regular bided key word terms, and not triggered by search, but by the prevalence of keywords in the HTML of a webpage. The pages may be news article, fiction stories, and blogs, just to mention a few. The people seeing the ads are not really searching for offerings but merely reading about similar items. The cost of this type of advertising is generally much less than the search driven PPC (Mordkovich & Mordkovich, 2005). While not all who click on the sponsored links turn out to be buyers, they are enticed to click through and see what is going on. This poses an opportunity to capture their information with a free hook. The free hook can be, for example, “let us send you our free catalog”. This worked well for farming names and address. Google has begun to set minimum prices on some terms, so as to keep the revenue rolling in. This is mostly on single terms, so some advertisers may opt to avoid them if the price is too high. PPC technology is used to direct traffic to websites where the advertisers are expected to pay a given amount of money to the publisher for the bid made. The consumer is expected to bid for the highest spot within the search engine, and the highest bidder receives the highest spot within the search engine. It is used as a tool for business promotions and advertisement of products and services in the market. It does this by counting the number of clicks made and makes the payments thereof (Mordkovich & Mordkovich, 2005). This allows companies to buy and sell their product abroad without having to travel or make phone calls. Benefits to Pay per Click Pay per click campaigns help advertisers in controlling traffic in their sites. Whereas new websites take a long time to rank well in search engines, PPC enables them to turn traffic on or off and pay for actual clicks in their site. In fact, with pay per click, one can create instant traffic (Digital River, 2009). Furthermore, as compared to organic search listings, with PPC, one is able to control the information in his or her website, and where the visitors of the website are to be directed to in the site. Nonetheless, pay per click listings also provides businesses with opportunities for global exposure. Unlike organic search listings which vary from one geographic region to another, PPC listings give advertisers the ability to control where they are seen (Payperclickguide.com, 2011). The pay per click is beneficial to companies and consumers in that it is cost effective and there is no waste involved since the consumer is only expected to pay for the service he or she gets directly. It is also considered beneficial in that it is so flexible and the consumer is at liberty to choose his or her convenient time to put the advert depending on the sales demand by the company. It also gives an assurance on advertising and promotion since the company deals directly with the search engine. The pay per click advertising is a tool that is used by companies to boost their businesses online since it is able to reach many people around the world in a matter of seconds. This has the potential of increasing the company’s profits. It is therefore important to select a keyword with high popularity to promote a business as this will enhance the chances of the business products and services reaching many people around the world. It is also important to select a keyword that has less competition in the market (Bergemann &Riphahn, 2010). The application of pay per click is advantageous in that it is simple and easy to understand. It does not involve a lot of complex programming. For a consumer to get the best spot for his or her promotion within the search engine, the only thing to be done is bid the highest compared to competitors (Bergemann &Riphahn, 2010). At the end, the highest bidder will be allocated the highest spot within the search engine; this is the same with the second, the third and so on. However, although PPC has great benefits to advertisers, they are often open to abuse especially through click fraud. A click fraud is an unlawful practice in which a person clicks on a website’s advertisement to raise the number of click through to the advertiser (Webopedia, 2011). The main reason for click fraud is to increase one’s own personal banner advertisement revenues and decrease the advertising budget of his or her competitor’s. Considering the existence of these abusive clicks, it is therefore important to implement tracking so as to determine effective PPC campaigns (Digital River, 2009). High number of click through in advertisement does not make an ad a good one. Therefore, to control the number of clicks in an advert, it is good to have free software to click on since it is easier to get users to click on them, but a small number of those clicks will convert to sales. While many PPC networks such as Google have tried to guard against these abusive clicks from competitors and corrupt web publishers by implementing automated systems, the problem remains a major issue yet to be solved (Payperclickuniverse, 2011). Internet usage around the world has increased significantly as people prefer modern technology as opposed to the old methods like the print media or pay per call to advertise their products. This in turn has seen a growth in the market share of pay per click advertising. Plunketts (2010) observed that the use of PPC in the United States as a marketing tool accounted for about 10% of the total US advertising market. Research conducted by Accenture also revealed that about 69% of consumers use the pay per click technology to research about a product before buying. Delloitt and Touch found that about 62% of consumers research for their products online (Plunketts, 2010). This shows how pay per click has taken a large share of advertising as a marketing tool around the globe. Disadvantages of PPC Despite the advantages of PPC, it has several disadvantages associated with it. Smaller pay per click companies at times does not have the ability to display their products when they are being searched for by customers. This is so because some of the small pay per click companies do not have enough expertise and skills required to operate PPC effectively. This has led to mistrust by some users making them shift their loyalty to other methods like Twitter and other social networks. Pay per click also has a disadvantage in that, it is complex and takes a lot of time to learn. It therefore requires training and thorough understanding of how it is used before jumping and starting to use it. This is so considering that it may result in massive losses by the company or consumer using it. It is also considered to consume a lot of time especially when dealing with products which are far abroad. These disadvantages are the main reasons as to why some companies across the globe do not use PPC as their promotion or advertisement tool. Lifespan of PPC The use of the pay per click is estimated to last throughout the life of the website which is uncertain. This therefore gives it advantage over other sources which may be faced off due to technological advancements taking place in the world. It is estimated that about 12% of clicks on the Internet is about Pay per click, this is due to the fact that companies have a lot of trust on the information from this sources and there is no eminent threat that the life span of the pay per click may expire before the consumers gets the products and services they need. Alternatives to PPC and Technological Advancements that may Make PPC obsolete Technological advancement in the world today cannot be overlooked. As such various alternatives to the pay per click such as the,Yahoo!Search Marketing, Google AdWords, 7Search,MIVA, Marchex AdHere, ABCsearch among others are being invented. An example of an alternative to the Pay per click is the social networking technology like the facebook and the twitter which are increasing growing very first. This is because they are considered more cost effective as they are provided free of charge as opposed to the pay per click where a certain amount of money has to be paid for the service. Other alternatives may include the use of the blog and online participation forums (Jantsch, 2008). The introduction of the Twitter, Facebook and other social networks has been seen to pose a lot of threat to the survival of pay per click advertising. Facebook and Twitter as marketing tools are taking centre stage since the response in most cases is faster compared to pay per click (Jantsch, 2008). With the social network, if a company has a customer on his fan page to which the company engages in networking, this customer would be more likely to add the company on to their friends and this helps in selling the company to many people without having to incur any cost as opposed to the pay per click. These advantages of social networking over the pay per click could render PPC obsolete in the near future. This is because it is now considered expensive in comparison with other new inventions coming in the market. It also has the disadvantage that it is sometimes time consuming especially when it comes to ordering products that are abroad. Key Players The major key players in the usage of PPC as a marketing tool include CES Company Limited, an Indian management company. CES Company in India is one of the leading companies in the use of the pay per click technology due to the fact that it operations were highly based on the competitive prices that consumers were bidding for. Other players include Searchen Network according to the Global Strategic Business Report (2006). The Searchen Network that specializes in search engine optimization is found to be among the top players in the pay per click advertisement and promotion due to the fact that it uses an innovative approach to technology and pays much attention to competitive prices wars. Phase of PPC Since Internet usage is increasing, the application of pay per click is also seen to be at the growth stage where many consumers and companies carry out research on products and services through the Internet. According to The New York Times report in 2008, use of PPC grew from 52% of online advertising in 2008 to 57% in the year 2008 (Szetela, Kerchbaum & Flore, 2010). This growth is attributed to the marketer’s increased confidence in the use of PPC as a means of reaching customers. For example the AdSense search engine launched by Google in 2003 is still at the growth stage. Initially it limited its use to large corporate partners. However, at the moment it is widely used by even those with limited page views. Conclusion Pay per click, aka PPC, is a web advertising platform used by many search engines to allow people to advertise their websites. The advertisement is in the form of a descriptive text ad that is triggered by the search term used by a person on a search engine. The advertiser pays the search engine, like Google, Yahoo and Bing, when the ad is clicked by a person. Advertisers bid on keyword phrases relevant to their target audience. The reason that a person would use PPC is to help show themselves to the public without relying naturally on (Search Engine Optimization) SEO. Websites that make use of PPC ads will display an advertisement when a person’s keyword query matches an advertisers predetermined keyword. These advertisements are sometimes called ‘sponsored links’ or ‘sponsored ads’. These ads can be deceptive to the inexperienced person because they appear adjacent to or above the organic results on search engine results pages. This placement leads to greater clicking of the ad which results in more revenue for the website. In the early days before any systems were in place to recognize ‘click fraud’, a person could click and refresh in a web browser session and cost an advertiser hundreds of dollars. The PPC advertising model was open to abuse through click fraud. Now many of the providers have sophisticated safeguards against false click traffic to help build confidence in the model for advertisers. Reference Bergemann A & Riphahn R T. ( 2010) Female labor supply and parental leave benefits–the Causal effect of paying higher transfers for a shorter period of time, vol. 18, 30 June, 17-20 Digital River (2009). What is PPC? Retrieved from http://www.developer-resource.com/what-is-ppc.htm on December 14, 2011. Jantsch J (2008), Duct Tape Marketing: The Worlds Most Practical Small Business Marketing Guide, 240-272 Mordkovich E. & Mordkovich B. (2005) Pay-per-click search engine marketing handbook: low cost strategies to attracting new customers using Google, Yahoo & other search engines. Lulu.com. Payperclickguide.com (2011). Pay Per Click Guide. Retrieved from http://payperclickguide.com/ on December 14, 2011. Payperclickuniverse (2011). Pay Per Click Fraud Is A Problem. Retrieved from http://www.payperclickuniverse.com/pay-per-click-search-engines-articles/pay-per-click-fraud-is-a-problem/ on December 14, 2011. Plunkett J W, (2008) Plunketts E-Commerce and Internet Industry Almanac 2008 (E-Book) E-Commerce and Internet Business Industry Market Research, Statistics, Trends And Leading Companies Szetela D, Kerschbaum J, Flores M (2010) Pay-Per-Click Search Engine Marketing: An Hour a Day Webopedia (2011). Click fraud. Retrieved from http://www.webopedia.com/TERM/C/click_fraud.html on December 14, 2011. Wikipedia (2011). Pay per click. Retrieved from http://en.wikipedia.org/wiki/Pay_per_click on December 14, 2011. Read More