Saturday, September 20, 2008

Paid Placement Programs

Paid Placement Programs

Many Search Engines have now started offering paid placement programs in addition to

their already existing programs. When someone searches for a specific term, the listings

show up in the order of highest bidder first, second highest bidder second and so on. If

two companies bid the same amount, the first bid gets priority for the listing and will be

listed first. Such programs are called Paid Placement Programs or Pay-per-click

programs. You only pay when someone clicks on your listing and is delivered to your


Benefits of Paid-Placement / Pay-per-click Campaigns

• Search Engine Marketing campaigns are effective for increasing web site traffic


• Pay-per-click programs will allow you to quickly test the ability for your web site

to convert visitors to a call to action or make a purchase.

• You will be able to identify which keyword phrases will provide the best

conversion rate.

While ordinary search results frequently include links to non-working pages, home pages

with irrelevant content and filler listings, paid search content ensures a user will gain

quick access to relevant sites of interest. Since each listing is displayed by either a

keyword search or relevant text link, you are ensured only visitors with interest are being

sent to your site. Thus, pay-per-click programs offer a more targeted approach.

The most prominent and successful Paid Placement programs are Google Adwords and


In 1998, Overture was the first to charge advertisers to be listed in its search results.

Now, all the major search companies have jumped in. So-called paid-search revenue

grew 40% last year, to $1.4 billion. It's now up to 23% of the $6 billion Net advertising

market, which shrank 17% last year, according to analysts' projections.

Placing ads near search results offers the simple appeal of the Yellow Pages, but with

different economics. Overture made $78 million last year on $668 million in sales, about

half of the paid-search market. That's more than Yahoo made on $953 million of revenue,

largely from traditional online ads such as banners. Paid search also pushed search

specialists LookSmart Ltd. and Ask Jeeves Inc. into profitability in the fourth quarter.

And the biggest potential initial public offering of an Internet company this year is

Google Inc., which began offering pay-per-click search last year. Search ads will make

up the lion's share of Google's revenue, estimated at $350 million to $400 million.