Pay-Per-Click Destined to Evolve into Pay-Per-Action
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Pay-per-click (PPC) advertising is big business. PPC generates revenues of billions of dollars every year for advertisers, and shows absolutely no signs of slowing down. Programs like Google’s AdWords, Yahoo! Search Marketing, formerly Overture, and late September, 2005, MSN announces it is joining the ranks of paid contextual advertising with its MSN Keywords and adCenter programs. However, no online single advertising scheme, especially one with inherant flaws, has survived the test of time. If history proves itself, PPC (along with Google) may soon be on the chopping block.
When PPC was introduced over a decade ago, attitudes ranged from slight amusement to outright shock to even feelings of personal betrayal. No one could have really guessed that online advertising would grow to a staggering rate of currently generating 40% of all online revenues.
How PPC got its start
Serial entrepreneur Bill Gross had a vision when he proposed an online search engine that ranked results based on how much advertisers were willing to pay to have their links tied to specific requests that we have fondly come to know as pay-per-click.
Gross pioneered his visionary approach at GoTo.com, which later changed its name to Overture Services before Yahoo bought it for $1.7 billion in 2003. Google introduced its own pay-per-click model, known as AdWords, in 2002.
As it has emerged into a highly effective marketing tool, the PPC system has spawned some unique problems, too. Looking for a competitive advantage, some advertisers have repeatedly clicked on a competitor's link in an attempt to drain their marketing budgets. Other rogue web sites belonging to the ad networks maliciously click on commercial links to generate more commissions for themselves, either by manual clicks, robot-clicker programs, or have even generated companies that pay unsuspecting “employees” to click for them. We call this click fraud.
Next: The Tunover of Advertising Schemes >>
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