Pay-Per-Click

Advertising

A Brief History Of Pay-per-click Advertising

When Pay-per click Advertising premiered on the web back in 1998, they were just little classified ads that performed brilliantly to a logical and long-established business model:

You pay the most, you get the best,

...search engine position, that is. Expensive clicks (laughingly cheap in comparison to the present day) bought you good business if you had the budget.

The idea was that you create a list of keywords, all of which could trigger your classified ad to be displayed if a search was made for the relevant term. So, way back then, if I was advertising this page for "pay-per-click advertising", I might have had a keyword list which contained these phrases:

pay-per-click advertising
pay-per-click-advertising
pay per click advertising
pay-per-click ad
pay-per-click ads
pay-per-click-ad
pay-per-click-ads
online-ad explain
online-ads help

...and my classified ad would be shown if someone searched using those keywords, which appeared parallel to the listings for any search term made within the relevant search engine. If the punters clicked on my ad, I had to pay. If they didn't, it cost me nothing for trying.

Pay-per-click advertising swiftly became very big business and Yahoo, trading as Overture, quickly established itself as top-dog but that changed rapidly in 2003 when Google introduced its new contextually based advertising, Adwords.

Almost overnight, pay per click advertising was a different ball-game altogether and suddenly, the #1 ad wasn't the one that had the biggest budget, it was the one that was the most relevant, frequently paying less per click than others in the top 10.

Google rolled out two products swiftly:

1 Adwords &

2 those same Adwords ads advertising within individual websites as Adsense

...and cleaned up. Yahoo's Overture and the rest of the search engines seemed stunned and virtually did nothing to remedy the situation for a few years while their revenues plummeted and Google's soared.

By that time, Google had turned pay-per-click advertising, almost single-handedly, from a multi-million dollar industry into a multi-billion dollar industry.

"...North American advertisers spent $9.4 billion on search engine marketing (SEM) in 2006, up 63 percent over the $5.75 billion spent on search in 2005, and beating last year's estimate of $7.2 billion.

Spending is projected to grow to $18.6 billion by 2011 in North America, driven by:

strong advertiser demand

rising keyword pricing and cost per click &

a second wave of small-to-mid-sized businesses discovering the efficacy of search and better search technology

That's a significant increase from last year's projection of $11.1 billion in 2010..."

Search Engine Watch Feb 2007

By 2006, both Yahoo's and the new Microsoft search engine also provided contextual ads and Google's ascendancy had been slightly curtailed but this has been more than offset by the rapidly expanding market.

You can, of course, replicate all your Google Adwords campaigns on other search engines, sometimes at a considerable discount...and I would recommend you eventually do so. However, each seach engine's advertising system has its own quirks and I'd strongly suggest starting with Google and then diversifying, principally because the best training products are always centered around Adwords.

Also, I've found that Google's traffic, though frequently more expensive (canny advertisers can slash their costs with the right training: see Perry Marshall) still seems to be the best bang for the buck, so the cheaper pay per click prices obtainable from other search engines may not always turn out to be cost-effective.