Pay Per Click Search (PPC) Engines

History

GoTo.com (www.overture.com) first introduced Pay Per Click search engines in 1997 in attempt to differentiate themselves from other search engines (which at the time, did not produce highly relevant results). The idea behind this revolutionary search engine was to create an auction based engine in which the order of the results displayed for each term, focused solely on the amount of money each Company bid for that specific term.

Since 1997, GoTo.com has changed their name to “Overture.com” to better reflect their corporate image. Overture has grown to be the largest PPC search engine in the world with a reach of over 75% of all Internet traffic (due to its recent partnerships with major Portals and Engines) and over 50,000 advertisers worldwide. Overture has also opened an engine in the United Kingdom to cater to the European population.

Other major players in the PPC arena are “Find What” (www.findwhat.com), “Sprinks” (www.sprinks.com), “Ah-Ha” (www.ah-ha.com), and “Kanoodle” (www.kanoodle.com). There are literally hundreds of other PPC’s that open up monthly in attempt to share a piece of the PPC pie.


How do PPC’s work?

PPC’s work on a very simple concept; Companies create and account, and bid on specific search terms relevant to their website topic. The company bidding the highest amount of money for each individual search term or phrase would be ranked in the #1 position. The Company bidding the second highest amount of money would be ranked in the second position, and so on. There is no skill or Search Engine Optimization involved in ranking your site in the #1 position; all that is needed is a PPC advertising budget.


What are the Benefits of PPC’s?

1) Control
One of the main benefits of PPC engines is the fact that you control your own campaign in real-time and decide how much you want to spend per month, per week, or per click. This flexibility allows for Companies to allocate their budget efficiently and to have complete control over their ROI.

2) Reach
Through its partnerships, alliances and affiliate program, Overture has been able to expand its services to include many of the top search engines on the web. Major portals and engines such as Yahoo!, MSN, AOL, Lycos, AltaVista, HotBot, Netscape and hundreds more have agreed to list Overture.com’s top 3-5 results on their search results page for a portion of the profits. These results are placed on any given results page in a specific section allocated to featured or sponsored listings. These partnerships have allowed Overture to reach 75% of online traffic.

3) Cost Effectiveness
As previously stated, Pay Per Click search engines allow for budgeting flexibility in your advertising campaign. Seeing that you control your own bids and click-through spending, PPC engines allow companies to efficiently distribute their funds according to industry trends and recent developments. Advertisers can send targeted traffic to their site for what they are willing to spend per client. PPC engines also offer tools where you can choose to a allocate specific month spending if you are on a budget, or a constant charge on your credit card in order to always keep your account live (if budgeting is not a factor).

4) Targeted Advertising
Pay Per Click engines allow advertisers to drive highly targeted traffic to their sites. With the ability to choose niche and specific keywords directly related to your industry, PPC engines provide advertisers with highly targeted and qualified traffic. This increase in targeted and qualified traffic drastically increases ROI and ultimately your bottom line.

5) No Skills Required
PPC engines do not require any skill or Search Engine Optimization (SEO) in order to get a high listing. All you need is an allocated advertising budget and the desire to be listed high. As long as you are the highest bidder, you will be in the top spot.


What are the Drawbacks of PPC’s?

1) Long-term Cost
Pay Per Click search engines are good for driving targeted traffic in real-time. Pay Per Click search engines represent a reoccurring cost when implemented over an extended time period. Professional Search Engine Optimization provides a greater Return on Investment than PPC engines because SEO represents a one-time fee whereas PPC engines will always represent an expense.

The increase in competitor bids will also effect the positioning of your site. In order to remain competitive, advertisers must increase their bids to maintain their desired position. A keyword costing $0.10 today may cost $1 one year from now.


2) Minimum Monthly Fee
Most PPC engines have now implemented a monthly minimum spending. Overture, for example, has set a minimum spending of $20 per month.

3) Keeping Your Account Live
If you choose to contribute funds in your account “on the fly” and your funds run out before you add more money, your account is suspended until a further review is made. This may take up to 3 days… this delay can hurt your traffic if you do not stay live.

4) Keeping Your Bids Current
In order to stay in your desired bidding position, you must constantly keep track of your competitors and how much they are biding. PPC engines provide a tool in order for you to change your bids in real-time and view the minimum bid in order to capture the #1 position.


PPC Strategies

It is very hard for smaller companies to compete with major corporations when bidding on a highly competitive search term. In many instances, bids may climb well over 5$ for a first place listing.

Instead of competing for a term such as “Web Hosting” at over $4.00 per click, you can drive more targeted traffic by bidding for a term such as “New York Web Hosting” at $0.80 or “Michigan Web Hosting” for $0.28. By focusing on niche keywords, you can drive more targeted traffic at a lower price. This will increase your conversion ratio, ROI and ultimately… your sales.

The term will be searched for less frequently, than a broader search term, but you will spend less money on a #1 position, and you will drive highly targeted and qualified customers to your site.


Important Note

Although Montreal Media strongly suggests that you use PPC engines in your advertising campaign, we stress that this should NOT be used as an alternative to Search Engine Optimization. PPC’s should be used to reinforce your online campaign and provide you with a greater reach and an increase in targeted traffic.