Bill Gross founded Idealab, an incubator of new inventions, ideas and businesses. He was the one who actually came up with Pay Per Click advertising model to fight spam in organic search. People paid in pennies to buy the right to rank above the organic results. Google took the same model and became one of the most powerful companies in the world. Bill Gross made Google a Giant.
Gross on Overture originated the concept of “pay-for-performance” (or “pay-per-click”) search engine advertising. Overture saw that the Internet was becoming an easy and convenient way to shop. To capitalize on the increasing trend toward Internet advertising, they devised a method to allow individuals and businesses to purchase advertising at a competitive rate.
Generating traffic is has become extremely important for most website owners who are hoping to profit from their websites. In order for a website to receive traffic, it needs to have a very visible presence. Search engines have traditionally helped to drive traffic to websites organically.
For search engines to be effective, a website needs to be listed at the top of the search results. It’s commonly known that websites that appear at the top of the listings get the most traffic. A site, which is on the 5th or 10th page hardly gets any traffic. Search engine optimization is the art and science of getting your website to place higher in the search results. Traffic is the name of the game and every Joe is playing it. The spammers were the number one reason a new PPC model was created.
When Bill Gross created his search engine, he created a system that allowed website owners to purchase a position in the search results. The entire process works very similar to an online auction – only in this case the product is search engine positioning.
A website owner bids on key words that are related to his or her website. For example, if your website involves training dogs, you might want your website to show up every time someone enters the word “dog training.”
The larger your bid amount, the higher your site will appear in the search results.
Of course, there is always competition for the best keywords. In some businesses, you can expect to pay a $20 or more for a good keyword to get top position. Other keywords can be purchased for just a few cents.
The idea behind the bidding is that you pay the bid amount every time someone clicks on the link to visit your website. You don’t pay anything just for having your website shown in the results – called an ‘impression’ – unless someone actually clicks on your link.
As you can imagine, websites that place high in the results can generate loads of traffic and, provided you have a good website that offers a valuable products, it could produce lots of sales.
You have probably used pay-for-performance search results without even being aware of it. Most of the major search engines integrate some form of paid advertising in their results. Search engines that use pay-for-performance listings separate their results into two categories. At the top or on the right side of the results are the paid ads. They are often called “sponsored results” or something similar. After three or four of these sponsored ads, the regular search results are displayed.
The goal of the search engines is to combine these ads in such a way that most users don’t even know the difference between the paid advertising and the listing that appear in the results. They are very effective at promoting the paid listings while minimizing their appearance as traditional advertising.
Google use Bill Gross model and became an overnight giant, it offers the opportunity for any company to increase their traffic almost immediately. As more people find you in the search results, the more traffic you will receive to your site. Of course, you need to have an effective sales page in order to convert your visitors into paying customers, but that’s another article.
The nice thing about using pay-for-performance advertising is that you have complete control over your campaign. You can run a campaign for a short time for a quick and immediate burst in traffic. You might, for example, bid for first position on a hot keyword for a very short time to get people to your website. Your cost may be very high, but good, targeted traffic that can be easily converted into sales will pay for the advertising.
Or you could choose to bid for a lower position over a longer period of time. Third or fourth position will still generate plenty of page views. With this method, you can stretch your advertising budget out over a longer period of time and still generate quality traffic.
With pay-for-performance advertising, website owners can eliminate much of the work that comes with traditional search engine optimization techniques. This means that they can create a website and advertise it without worrying too much about how to get it to the top of the listings. Of course, this kind of marketing shortcut comes with a higher price tag.
For most website owners it’s a trade-off. Do you want to spend the time required to create a highly-optimized web site that places well in the search results or would you rather spend the extra money it takes to get to the top of the results without that work?
Either way, there is a cost. The advantage of pay-for-performance advertising is that it allows website owners to get favorable results without having to be an expert in the world of search engine optimization. Just keeping on top of what’s required to stay on top can be a full-time job itself!
The search engine result listing is not the only way to drive traffic to your website. Some pay-for-performance companies will place your advertising on third-party websites. This can be a wonderful source of traffic.
With this method, thousands of website owners agree to place advertising on their websites. The ads that appear are usually tightly matched with the content of the third party website.
For example, if I owned a website that was a how-to guide for small catering companies, the ads that appear on my website would be specifically targeted to cooks and caterers. You might find ads for cooking supplies, books on cooking, or even recipe websites. You wouldn’t usually find unrelated advertising like car dealerships or travel agents.
This form of advertising is great for business. You ad not only appears in search results but on websites of sites where you know the visitors are interested in what you have to offer.
But why would a website owner want to put up ads on their website for your products? It’s a simple answer. They make a small percentage every time people click on the ads. If their site is very popular, they could earn hundreds of dollars a month just by having their visitors click on advertising links. It’s a win-win situation for everyone.
For an advertiser, the goal is to get your website exposed to as many people as possible. Pay-for-performance advertising allows your website to be noticed on search engines and on third-party websites. And all of this extra exposure can lead to more traffic and more sales. A substantial increase in your revenue as a result of this additional advertising can more than pay for the cost of the advertising program. It’s an incredible value for your marketing dollar.
Most of the pay-for-performance companies online also offer tracking and reporting. This allows you to see how effective your campaign is in real time. You can view the number of impressions and click-throughs as they happen. You can easily test your advertising by changing one element at a time and view the results immediately. It’s an easy way to maximize your results with minimal risk.
With so much competition on the Internet, it’s important to create a marketing plan that puts you out in front of the competition. Pay-for-performance advertising is one strategy that can generate tremendous traffic in a very short period of time.
It’s also an extremely flexible marketing system. You can make changes in your advertising program and have it implemented almost immediately. This allows you to take command of your budget and put your resources to the best possible use.
Facebook, Yahoo Search Marketing, Google AdWords, and MSN adCenter are a few of the companies competing for your advertising budget. An Internet search will reveal dozens of other companies that can help with your pay-for-performance advertising.
Once you discover the power and flexibility of pay-for-performance advertising, you’ll be surprised at the outcome. Get started today – even if it’s with a low initial investment – and see the results immediately. It is a very good way to test what works and what doesn’t. Even if you were to place an ad in newspaper and wanted to know, which headline would work the best. Use PPC and create an ad with $5 budget for each headline, you will know in couple of hours, which one works the best.
Done right, PPC is a good source of customers but you got to make sure, what you spend is, less than what you make. Achieve that and you can get steady amount of traffic right away.
Key: is to make sure you worked out the ad and the landing page to increase conversion.