4.5. Paid Placement
Every major search engine, as well as plenty of minor search engines and independent websites both large and small, displays paid listings today. Most of these listings are provided by the two major U.S. pay-per-click services, Google AdWords and Yahoo! Search Marketing (YSM), with a small share sourced in Microsoft adCenter.
The market is huge: According to Jupiter Research, online marketers will spend $7 billion on pay-per-click (PPC) advertising by the year 2010.
As you learned in Chapter 3, pay-per-click (PPC) is generally an auction-based system, with advertisers jockeying for their listings' positions based on bid price. See Figure 4.1 for an example. Until recently, the PPC auction was a fairly straightforward system in which a higher bid resulted in a higher rank. Now, Google and YSM are both gravitating toward a more complex method for determining PPC ranks. In Google AdWords, for example, the PPC algorithm is called a Quality Score, and it awards position based on several factors, including click-through rate, cost, and relevance of the ad text.
Figure 4.1. Pay-per-click advertising on Yahoo!
So if you were looking to PPC as a way to skirt around the Eternally Hidden Algorithm, we're sorry to say there's one to puzzle over in PPC as well. For starters, noted pay-per-click expert Kevin Lee indicated to us that PPC algorithms today are likely to favor big brands and compelling, relevant ad text because those ads would receive higher predicted click-through rates.
Google AdWords and YSM offer an opt-in feature that will display your listings on partner sites in addition to their own search engines. In this system, called contextual advertising, your listings are matched to the content of the page where they are displayed. See Figure 4.2 for an example. You can manage your contextual campaigns separately from your search-based PPC ads.
Figure 4.2. Contextual ads by Google
There are many variations on the theme of standard pay-per-click ads. You can enhance your ads with shopping cart badges. You can advertise using a cost-per-click, or cost-per-thousand-impressions model. You can experiment with choosing sites for contextual ad placement or let the algorithm decide for you. And you can even try a pay-per-call or pay-per-action model of advertising. In this book, we focus on PPC, because of its omnipresence in the search marketing industry, and because we think it's a reasonable place to jump in.
A quick rundown of the three major PPC services appears in Table 4.6.
Competition between PPC services has resulted in some significant advances in campaign tracking, click fraud prevention, and geographic targeting, and these improvements are expected to continue. The bad news is that there are so many products out there—even within any given PPC service—that the potential for confusion is very high. With more and more site owners adopting PPC, the online help systems are rather robust. But there are lots of people who choose to outsource PPC management because it can be a real headache. It can be done in-house, though, and it doesn't have to be that difficult if you start small and focus on the basics.
| Yahoo! Search Marketing | Google AdWords | Microsoft adCenter | |
|---|---|---|---|
| URL | http://searchmarketing.yahoo.com | http://adwords.google.com | http://adcenter.microsoft.com |
| Name of pay-per-click product | Sponsored Search | AdWords | adCenter |
| Name of contextual placement product | Content Match | AdSense | Content Ads (display on MSN sites only) |
| Major partnerships (sites where ads are shown) | Yahoo!, CNN.com, bebo.com | Google, AOL.com, Ask.com, Shopping.com, thousands of small sites | Live Search, MSN properties, Facebook rumored to be next |
| Industry chatter | Not as many features as Google AdWords, but it delivers solid conversions and rolls out frequent improvements. | Well liked for its reach, as well as useful tools and advertising options, but many are frustrated by the lack of transparency on how rankings are determined. | Costs per conversion are good, but overall traffic is so low that adCenter is usually an add-on, as opposed to a major element, in most search marketing campaigns. |
PPC is unmatched in the power it gives you over your listing: what it says, who sees it, and when. We also love PPC as a tool for studying the response to your keyword choices. So in Chapter 8, with our guidance, you're going to set up a starter campaign and get to know the basics while you get yourself some tasty targeted clicks.