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.
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.
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.