Pay-per-click

Purpose and Construction of Pay-per-click - Assess cost-effectiveness and profitability of internet marketing - Drive the cost of running an advertisement campaign as low as possible - Retain set goals - Measure attention and interest through clicks - Preferred metric for generating clicks and driving traffic - Cost-per-click (CPC) calculated by dividing advertising cost by clicks generated - Two primary models: flat-rate and bid-based - Consider potential value of a click from a given source - Targeting is key in PPC campaigns - Factors influencing PPC campaigns include interests, intent, location, device, and time Flat-rate and Bid-based PPC - Flat-rate PPC: - Advertiser and publisher agree upon a fixed amount for each click - Rates often related to the content on pages - Negotiation for lower rates possible - Common on comparison shopping engines - High degree of targeting by advertisers in specific categories - Bid-based PPC: - Advertisers compete in private auctions hosted by publishers or advertising networks - Advertisers indicate maximum amount willing to pay for an ad spot - Real-time bidding (RTB) occurs for each triggered ad spot - Multiple winners possible for multiple ad spots - Ad rank determined by bid and Quality Score Contextual Ads in Pay-per-click - Contextual ads placed on 3rd-party properties through advertising networks - Publishers receive a portion of ad revenue generated - Lower click-through rate and conversion rate compared to ads on search engine results pages (SERPs) - Content network properties include websites, newsletters, and emails - Advertisers pay for every click received, based on the bid amount History and Statistics of Pay-per-click - History: - Several sites claim to be the first PPC model on the web, appearing in the mid-1990s. - In 1996, the first known PPC was included in a web directory called Planet Oasis. - By the end of 1997, over 400 major brands were paying between $.005 to $.25 per click. - In February 1998, Jeffrey Brewer of Goto.com presented a pay per click search engine proof-of-concept. - Google started search engine advertising in December 1999 and introduced AdWords in October 2000. - Statistics: - Customers are 50% more likely to purchase something after clicking a paid ad. - SMEs spend $108,000 to $120,000 annually on PPC ads. - 57.5% of users don't recognize paid ads when they see them. - Click bots and fake traffic cost online advertisers $35 billion. - In 2014, PPC (AdWords) attributed approximately US$45 billion of Google's annual revenue. Click Fraud and Legal Issues - Click Fraud: - Click fraud takes two forms: publishers illegitimately clicking on or fraudulently generating clicks on adverts and advertisers attempting to derail competitors' adverts. - In 2018, the FBI cracked down on an illegal ad fraud scheme known as 3ve. - Ad fraud annual revenue was estimated to be worth more than the illicit drug trade. - The FBI partnered with Google and other major industry ad platforms to combat click fraud. - Legal Issues: - In 2012, Google was initially ruled to have engaged in misleading and deceptive conduct. - The ruling was later overturned when Google appealed to the High Court of Australia. - Google was found not liable for the misleading advertisements run through AdWords. - The case highlighted the extent of ad fraud, with over $19 billion estimated to have been stolen by click fraudsters. - The Google Ads platforms claim to be able to identify invalid clicks.