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Introduction to Search Engine Marketing / PPC Advertising

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Article by Carsten Cumbrowski, August 27th 2006

Table of Contents



Introduction to Search Engine Marketing/PPC


Search Engine Marketing (SEM) also PPC Search Marketing is a marketing method involving keywords and phrases in small text ads. Advertisers bid at search engines or other PPC marketing services on keywords or phrases to get ads displayed in search engine result pages. Ads can also be displayed on other web sites provided by the service you are using for your ad campaigns.

Your maximum bid amount is the maximum amount of money you are willing to pay when a visitor clicks on your ad and gets referred (redirected) to your website. You do not have to pay for the display of the ad as you would in a CPM Model*.

*There are exceptions where one pays per impression rather than per click. For example, the Google AdWords "Content Network" uses CPM. (Google's publisher sites offer on-site signup via the "Advertise on this site" link.) Google is currently experimenting with CPA based models as an alternative to CPM for the onsite signup. Despite CPM and CPA, Pay-Per-Click is the most common model in SEM today.


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A Brief History of PPC Advertising


Pay-Per-Click (PPC) advertising has already had a very long history. It was popular during the dot com boom at the end of the 1990s, but (due to rampant problems with click fraud) was mostly abandoned by advertisers for advertisements on other websites in favor of CPA and CPS affiliate marketing.

The only major player that remained undeterred was the PPC pioneer GoTo.com, later renamed Overture.com and purchased in 2003 by Yahoo! Today it is known as the Yahoo! Search Marketing service.

Search engine GoTo debuted its new pay-for-placement service on February 21, 1998, but was not the first one who experimented with the Pay-for-placement model. Open Text experimented with it in mid-1996, and numerous small search directories offered the ability to pay for a better ranking prior GoTo's re-launch. GoTo.com launched in 1997 already and incorporated the former University of Colorado-based World Wide Web Worm, showing search results algorithm-ranked, until they introduced the pay-per-placement model on that day.*

PPC Advertising made a big comeback when Google launched its AdSense Service on June 18, 2003, the day that can be called the official birth date of contextual advertising. Google launched their PPC service Google AdWords in 2000 and saw only mild success with it until 2003.

Ask Jeeves, now simply Ask.com, followed with their PPC service in 2005 called Ask Sponsored Listings and MSN.com, followed in 2006 with Microsoft AdCenter. Other large PPC service providers and Search Engines are Miva/FindWhat.com and 7Search.com.

Yahoo! launched its contextual advertising service, YPN or the Yahoo! Publisher Network, in 2005 (and it is even better today) and Microsoft is expected to launch its contextual advertising service based on their new AdCenter PPC Service in late 2006.

Click fraud is still a problem today and cannot be 100% prevented, due to the nature of how PPC works. However, methods to prevent the problem's escalation have evolved since the dot com crash in 2000. It is likely that the problem can and will be solved to reduce the impact of click fraud on the overall cost of PPC marketing and ROI to an acceptable number. The environment in which PPC is used has changed. This increases the chance that the problems that caused the "death" of PPC years ago will not cause its downfall today and will make it an advertising model that remains here to stay.

PPC advertising services offered today are offered almost exclusively by large and specialized service providers. PPC plays almost no role in direct referral marketing between individual websites. Affiliate/Performance Marketing is king and will remain so for the foreseeable future. The features and benefits of CPA and CPS, the domains of classic affiliate marketing, will almost certainly influence today's PPC services. Hybrids of CPC/CPM and CPA/CPS will eventually blur the borders between the currently distinct advertising models.


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SEM and SEO


Search Engine Marketing (SEM) is often confused with Search Engine Optimization (SEO), but the two marketing methods are very different and require very different skills.

To learn more about SEO, visit my Search Engine Optimization Resources Page.


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Successful PPC Marketing Requires Tracking and Analytics


Before you attempt any serious PPC marketing, make sure that you have tracking in place and are able to perform at least some basic analytics in order to determine the effectiveness and success of your PPC campaigns. Having this in place is vital to successful PPC marketing and I do not recommend that anyone start a PPC campaign without having tracking in place.

Today, basic solutions that track your website traffic and conversion and help you with the analysis and evaluation of your campaigns are no longer expensive. Some options are even free except for the price of sharing your data with the solution provider.

If you don't mind that Google has access to your tracking data, sign up for Google Analytics which is free. Another option would be ClickTracks which offers different tracking and analytics packages depending on your needs and the size of your online business.

You can find more information and resources on this topic at my Web Analytics Resources Page and List of Web Analytics Books.


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PPC/SEM Outsourcing


You might want to consider outsourcing this complex job to a professional search advertising agency. There are a lot of companies on the Internet that offer this service. Make sure to check the background of potential companies and check references.


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Stay Up to Date about New Developments in SEO and SEM


It is very important, and now also very easy, to stay up to date with recent events and developments in Search Engine Marketing.

Just sign-up to my Aggregated SEM/SEO News (RSS Feed).Search Engine Optimization (SEO) and Marketing (SEM) Aggregated News.

I have collected the most important sources of news and information about SEO and SEM into a single and convenient RSS Feed so you don't have to go out and search for good sources and subscribe to dozens of individual feeds. You can see the latest news in my RSS Feed at my Search Engine Optimization Resources Page on the right side of this page.


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Tradeshow and Industry Events Calendar


Attending an SEO/SEM tradeshow can be very rewarding for your SEO/SEM and Internet marketing efforts. You will meet the "who's who" in the industry and gain new insight at the keynote sessions. Subscribe to my Public Internet Marketing Events Calendar powered by Google Calendar.

Add the calendar to your Add this public Calendar to your Google Calendar or use my Google Calendar Feeds Important Industry Events Public Google Calendar FeedImportant Industry Events Public Apple iCal Feed.

To see which events I have currently listed check my List of Important Industry Events.


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SEM/PPC Resources


Sources

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©2006 Carsten Cumbrowski

Replication of this Article, in full or in parts, without written permission by Carsten Cumbrowski is prohibited.




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