Pay per click (PPC) advertising was pioneered in 1997 by GoTo.com, which was later renamed Overture Services. Forrester Research recently forecast the pay per click advertising spend to reach $11.6 billon in 2010 becoming the dominant form of advertising on the Internet. Today the market is dominated by Google and Yahoo!, who bought out Overture in 2003. Ask Jeeves recently launched their own proprietary system and MSN will be entering the market in late 2005-early 2006. There are also a number of second tier players, including FindWhat and LookSmart that have been competing in the market for a number of years.

Pay per click advertising allows a company to bid on a keyword in a live auction marketplace. These keywords along with ad copy appear on the results page that a search engine returns for a user query. PPC ads are usually displayed at the top and bottom of each search return page and along the right hand side surrounding the natural / organic search returns. PPC ads can also be displayed on web pages that incorporate contextual marketing links, such as Googles AdSense program and the new Yahoo! Publisher Network. The ads are displayed based on the web pages content and are regulated by the same bidding mechanism that is used for determining ad placement within the search results pages.

Pay Per Click Benefits

PPC advertising offers several benefits to advertisers. First and foremost PPC is an effective tool for driving sales in a short period of time. Unlike SEO campaigns which can take months before any significant results are seen, pay per click advertising campaigns can start generating leads within minutes of launch. Advertisers only pay when an ad is clicked on so in theory every click is a potential sale. The reality of the market is somewhat different but nonetheless PPC advertising has proven itself to be a highly effective direct sales vehicle.

Pay per click advertising is also effective for increasing brand awareness. A recent Internet Advertising Bureau (IAB) study tracking the branding effect of search engine ads and PPC contextual ads found that on average respondents asked to name a specific leading brand within a tested industry were 27 percent more likely to name the brand displayed in the top spot in the PPC search results compared to a control group not exposed to the ad. For PPC contextually targeted text advertising the text ad caused a 23 percent brand awareness lift among respondents that saw the ads. As more ad spending switches from television to the Internet the importance of branding through PPC ads will become even greater.

Paid Inclusion Trusted Feeds

Currently the only major search engine to offer a paid inclusion program is Yahoo! with their Search Submit program. Paid inclusion guarantees that your pages will be indexed by the Yahoo! search spider but it does not guarantee where your listing will appear in the search results. Each time someone clicks on a listing a fee is paid to Yahoo! for including it in the search results.

Sites that use dynamically generated pages often have a hard time getting indexed. For these types of sites paid inclusion can be an effective means for garnering listings but merely getting pages indexed does not guarantee that they will generate traffic to the site. Paid inclusion is best used in conjunction with SEO and is not normally a standalone solution for garnering new potential customers.