PPC is the abbreviated form of Pay Per Click which is also called as cost per click. This is one of the important model that online advertisers use to drive traffic to the websites. Here the advertiser will pay only when user clicks on the ad.
Let’s go some more deep in to the concept to find out when PPC started and how it originated.
This is the year the word PPC has come in to play. Planet Oasis launched first documented version of PPC on a desktop application.
Later Open text index, in their search results started selling paid ads which they define it as preferred listings.
In the same year, Google which is now called as giant search engine and which occupies more than 80% of search engine market share started as a research project in Stanford university.
In this year, more than 400 global and local brands actively participated in PPC advertising and used it more effectively in search results and directories with fixed prices for every advertiser ranging from $0.005 – $0.25
In the same year, Yahoo got an opportunity to buy Google for $1 million which is now valued at $109.5 billion.
In these years GoTo.com came into play with a simplified model of advertising with an eye-catching tagline ‘search made simple’. In February 1998 GoTo.com introduces the bid system. Here advertiser can bid for ad position on keywords. Depending upon the bid value the ads are going to show in the search results. In this model advertisers were paying up to a dollar per click by mid-1998.
Later in 1999, GoTo.com introduces a new tool for bidding. In this tool, advertisers are allowed to set real time pay per click bids amounts on keywords individually.
In the same year, Google also started search engine advertising.
Here in this year Google introduces Google AdWords tool, a self-helping platform for advertisers. Here Google AdWords allows the advertisers to place ads for selected keywords and will pay money only when the ad is shown. At that time, Google uses CPM bidding model i.e. they charge for 1000 impressions.
In this year GoTo.com was renamed as Overture and had a partnership with Yahoo, MSN and other search engines and publishing the ads throughout the websites.
Here in this year GoTo.com (later Overture) earned $288 million in pay per click ad revenue.
In this year, Google introduces a new payment option for advertisers for advertising on search results. The new system uses various factors like ad relevance, click through rate and landing page to rank the ad on google search results.
Yahoo acquired overture for $1.63 Billion when its contract for ad publication come up for renewal.
In the same year, Google acquired Applied Semantics and also launches AdSense where publishers can place ads on external websites and the publishers will get a share of each click generated.
Google’s search market share hits 84.7% of all the searches on the internet and annual revenues of $2.7 billion predominantly from PPC advertising and initial public offerings with a market value of $23.1 billion.
Here Google find many issues in pay per click model like fraud clicks where the advertiser budget can be depleted quickly and google has taken measures to detect and stop the fraud occurring.
Google also releases a new tool called Google Analytics which helps the advertisers to track the performance of their campaigns.
Revenue generated by Google AdSense in the year 2005, 4th quarter is $799 million which is 42% of Google’s revenue.
The usage of mobiles has been increasing. So, Google targeted mobile user as well. With the increase of internet on mobile devices, the major pay per click networks start to focus their efforts on mobile advertising. In this year, Google Acquired Ad mob a mobile advertising agency for $750 million.
In this year maximum, i.e. 97% of Google’s revenue comes from advertisements. Cost per click continue to rise on all the networks and the most expensive keywords that brought the maximum benefit are insurance ($54.91 per click in the United States), loan ($44.28 per click), mortgage, attorney and credit.