Evolution of Pay Per Click Marketing(PPC) - ITinfo Group

Evolution of Pay Per Click Marketing(PPC)

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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.

  1. Let’s go back to July 1996

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.

  1. Jumping to 1997

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.

  1. In 1998 & 1999 (Flying High)

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.

  1. What happened in 20th Century

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.

  1. Moving to 2001

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.

  1. Moving ahead (2002)

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.

  1. In the Year 2003

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.

  1. In the Year 2004

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.

  1. In the year 2005

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.

  1. In 2006
  • Google acquires the world’s largest online video site YouTube for $1.65 billion.
  • Yahoo acquires $680 million in April
  • After 10 years Yahoo’s Initial Public Offerings reaches a height of $43/share after making its first initial public offering.
  • Facebook partnered with Microsoft ad centre and launched advertising on its website to publish banner and sponsored ads.
  1. In 2007
  • Facebook started allowing advertisers to target users by demographics and interests by launching its own advertising platform.
  • Fetchback and Criteo introduced the concept of remarketing. Remarketing helps the advertisers to target specifically the users who have been to their website in the past.
  • Various bid management software solutions are launched to automate PPC bidding.
  • In April Google acquires double click which is an online advertising company for $3.1 billion in cash.
  • In May, Microsoft Acquires aQuantitative for approximately 6 billion.
  • In July, Google introduces a new tool called AdWords Express
  1. In the year 2009

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.

  1. In the year 2010
  •  In this year, in order to fight with the Google’s growing search share, Microsoft Search is renamed as Bing and teams up with yahoo to publish their ads on the yahoo network.
  • Google releases new advertising options in Google AdWords like product listing ads and remarketing.
  1. In the year 2011

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.

  1. In the year 2012
  • For the first-time Google surpasses $50 billion in revenue out of which maximum 95% of revenue derived from advertising.
  • By December 25% of paid search ad clicks are from mobile devices in Google.
  1. In the year 2013
  • In July 2013 Google launched some more advanced options in Google AdWords and one of the important feature in Google AdWords is enhanced campaigns which has the ability to turn off certain devices
  • PPC advertising on smart phones is up132% since 2012
  • The highest share of Google’s stock is achieved after nine years of its initial public offerings.
  • Today many companies came into play that offer ppc services adMarektplace, valueclick and adKnowledge as an alternative to google AdWords.
  1. In the year 2014
  • Spending on PPC advertising has been increasing with a mobile spend increase up to 98% year on year.
  • Google introduces new feature in Google AdWords. Here in this feature we can track the calls from ads as well as from websites to allow better optimization of ads and keywords.
  1. In the year 2015
  • Google introduced Gmail ads (promotions tab)
  • Google introduced Structured snippet extension to add extra information about the business
  • Introduction of call only campaigns which allows the user directly to cal the business.
  1. In the year 2016
  • Google removed right side ads and added space for 4th ad above the organic results.
  • The big announcement made by google in this year is the introduction of Google Expanded Ads. That was the biggest change made by Google after 15 years. In the previous version, we have only one headline and two descriptions. Now in the expanded version we will have two headlines and a single description which increases the CTR of the ad.
  • A new interface for AdWords was rolled out in August which is user friendly.
  • Google introduced message extension that helps the users to text the business directly from the search results.

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