Pay per click (PPC) is an advertising model used on search engines, advertising networks, and content websites/blogs, where advertisers only pay when a user actually clicks on an ad to visit the advertiser’s website. Advertisers bid on keywords they predict their target market will use as search terms when they are looking for a product or service. When a user types a keyword query matching the advertiser’s keyword list, or views a page with relevant content, the advertiser’s ad may be shown. These ads are called a “Sponsored link” or “sponsored ads” and appear next to or above the “natural” or organic results on search engine results pages, or anywhere a webmaster/blogger chooses on a content page.
Pay per click ads may also appear on content network websites. In this case, ad networks such as Google AdSense and Yahoo! Publisher Network attempt to provide ads that are relevant to the content of the page where they appear, and no search function is involved.
While many companies exist in this space, Google AdWords, Yahoo! Search Marketing, and Microsoft adCenter are the largest network operators as of 2007. Minimum prices per click, often referred to as Costs Per Click (CPC), vary depending on the search engine, with some as low at $0.01. Very popular search terms can cost much more on popular engines. Arguably this advertising model may be open to abuse through click fraud, although Google and other search engines have implemented automated systems to guard against this.
PPC engines can be categorized into two major categories “Keyword” or sponsored match and “Content Match”. Sponsored match displays your listing on the search engine itself whereas content match features ads on publisher sites and in newsletters and emails.
There are other types of PPC engines that deal with Products and/or services. Search engine companies may fall into more than one category. More models are continually evolving. Pay per click programs do not generate any revenue solely from traffic for sites that display the ads. Revenue is generated only when a user clicks on the ad itself.
Advertisers using these bid on “keywords”, which can be words or phrases, and can include product model numbers. When a user searches for a particular word or phrase, the list of advertiser links appears in order of the amount bid. Keywords, also referred to as search terms, are the very heart of pay per click advertising. The terms are guarded as highly valued trade secrets by the advertisers, and many firms offer software or services to help advertisers develop keyword strategies. Content Match, will distribute the keyword ad to the search engine’s partner sites and/or publishers that have distribution agreements with the search engine company.
As of 2007, notable PPC Keyword search engines include: Google AdWords, Yahoo! Search Marketing, Microsoft adCenter, Ask, LookSmart, Miva, Yandex and Baidu.
Internet marketing, also referred to as online marketing or eMarketing (or e-Marketing), is the marketing of products or services over the Internet. The Internet has brought many unique benefits to marketing including low costs in distributing information and media to a global audience. The interactive nature of Internet marketing, both in terms of instant response and in eliciting response, are unique qualities of the medium.
Internet marketing ties together creative and technical aspects of the internet, including design, development, advertising and sales. Internet marketing methods include search engine marketing, display advertising, e-mail marketing, affiliate marketing, interactive advertising, online reputation management and also Social Media Marketing Methods such as blog marketing, and viral marketing.
Internet marketing is the process of growing and promoting an organization using online media. Internet marketing does not simply mean ‘building a website’ or ‘promoting a website’. Somewhere behind that website is a real organization with real goals.
An Internet marketing strategy includes all aspects of online advertising online activity that promotes a company online, including websites, blog sites, article and press releases, online market research, email marketing, and advertising, as appropriate for the promotion of ones’ business.
Internet marketing is associated with several business models. The model is typically defined by the goal. These include e-commerce, where goods are sold directly to consumers or businesses; publishing, or the sale of advertising; and lead-based sites, where an organization generates value by getting sales leads from their site. There are many other models based on the specific needs of each person or business that launches an internet marketing campaign.
Internet marketing refers to the placement of media along different stages of the Customer engagement Cycle, through Search Engine Marketing, Search Engine Optimization, Banner Ads on specific sites, email marketing and Web 2.0 strategies. In 2008, The New York Times working with comScore published a first estimate to quantify the user data collected by large Web companies. Counting four types of interactions with company sites plus the hits from ads served from advertising networks, they found the potential for collecting upwards of 2,500 pieces of data on average per user per month.
Internet marketing is relatively inexpensive. Companies can reach a wide audience for a small fraction of traditional advertising budgets. The nature of the medium allows consumers to research and purchase products and services at their own convenience: An internet marketing campaign puts an organization’s message in front of consumers precisely when they want it.
However, internet marketing isn’t a panacea. It still requires intelligent planning and careful execution. Emphasize business goals and use methods such as CVP analysis when determining strategy and the overall effectiveness of marketing campaigns.
There are a few important characteristics that differentiate Internet marketing from “off-line marketing”:
- One-to-one vs. one-to-many approach: The targeted user is typically browsing the Internet on their own, and the marketing messages reach them personally. This can be very clearly seen in search marketing, where the users find advertisements targeted to specific keywords that the users asked for(1).
- Demographics targeting vs. behavioral targeting: off-line marketers typically segment their markets according to age group, sex, geography, and other general factors. Online marketers have the luxury of targeting by activity. This is a deeper form of targeting, since the advertiser knows that the target audience are people who do a certain activity (upload pictures, have blogs, etc.) instead of just expecting that a certain group of people will like their new product or service.
- Measurability: Almost all aspects of an online campaign can be traced, measured, and tested. The advertisers either pay per banner impression (CPM), pay per click (PPC), or pay per action accomplished. Therefore, it is easy to understand which messages or offering are more appealing to the audience.
- Response and immediate results: Since the online marketing initiatives usually require users to click on the message, go to a website, and perform a targeted action, the results of campaigns are immediately measured and tracked. On the other hand, someone driving a car who sees a billboard, will at best be interested and might decide to get more information at some time.
Internet marketing, as of 2007, is growing faster than other types of media.Since exposure, response and overall efficiency of Internet media is easier to track than traditional “off-line” media, through the use of web analytics for instance, Internet marketing can offer a greater sense of accountability for advertisers. Increasingly, however, marketers and their clients are becoming aware of the need to measure the collaborative effects of marketing, i.e. how the Internet affects in-store sales, etc., instead of siloing each medium. The effects of Multi-Channel Marketing can be difficult to determine, but are an important part of ascertaining the value of media campaigns.
Effects on industries
Internet marketing has had a large impact on several industries including music, banking, and flea markets, as well as the advertising industry itself. As Advertisers increase and shift more of their budgets online, it is now overtaking radio in terms of market share. In the music industry, many consumers have begun buying and downloading music files (e.g. MP3s) over the Internet in addition to buying CDs.
More and more banks are offering the ability to perform banking tasks online. Online banking is believed to appeal to customers because it is more convenient than visiting bank branches. Currently, over 150 million U.S. adults now bank online, with a high growth rate. The increasing speed of Internet connections is the main reason for the fast growth. Of those individuals who use the Internet, 44% now perform banking activities over the Internet.
Internet auctions have gained popularity. Unique items that could previously be found at flea markets are being sold on eBay instead. eBay has also affected the prices in the industry. Buyers and sellers often look at prices on the website before going to flea markets and the eBay price often becomes what the item is sold for. More and more flea market sellers are putting their items up for sale online and running their business out of their homes.
The effect on the ad industry itself has been profound. In just a few years, online advertising has grown to be worth tens of billions of dollars annually. PricewaterhouseCoopers reported US Internet marketing spend totalled $16.9 billion in 2006.