ENGINE MARKETING ARTICLE
A Comparison of Paid Search Advertising Models
By Bill Platt
(c) 2006 the Phantom Writers
As webmasters, we are all chasing customers. We are looking for human visitors
to come to our websites and to buy what we are selling.
To serve our needs for targeted traffïc --- potential customers --- the search
companies have begun to offer us a share of their significant traffïc through
many paid advertising methods.
The most common advertising offer at the search engines is the PPC
(Pay-Per-Click) advertising model. There are also other search advertising
models such as CPM (Cost Per Thousand Impressions) and Featured Listings.
In this article, we will look at the
advantages and disadvantages of each advertising method.
PPC (Pay-Per-Click) Advertising Model
By far, PPC is currently the most popular advertising model. From the buyer's
perspective, it is usually the most expensive type of advertising and the one
that generates the most fear of fraud. In fact, many experts suggest that
click-fraud might be as high as 20 to 25% of all click-traffic.
Pay-Per-Click is exactly what it sounds like. The advertiser bids on keywords
and tells the advertising company that they will pay X number of cents or
dollars for every clíck that they receive to their website through the PPC-provider's
Advertisers compete for position within the search results with the highest
bidder getting the best advertising spot at the top of the results. The second
highest bidder gets the #2 spot, etc.
Generally, Pay-Per-Click providers serve three listings on the first page of
search results. Only when there is strong competition for a particular keyword
term and a number of advertisers vying for placement, will the PPC-provider show
results with more than three advertisers.
If you bid the minimum five cents per clíck (the standard for most PPC systems),
then it is possible that you might not see your listing on page one or page two
of the search results. Let's face it; PPC providers are interested in making the
most monëy they can from the traffïc they send to people. So, if one advertiser
is paying a dollar per clíck and you are only bidding five cents a clíck, who do
you think will receive the best placement? Yep, the one-dollar per clíck
advertiser will get the most attention and the best placement, even if it
requires pushing your placement back to page three of the search results.
The top two PPC-providers are:
- Owned by Yahoo! Other not-so-well-known providers of PPC traffïc, in
alphabetical order, include:
http://www.miva.com - Formerly FindWhat.com
The biggest advantage to these
systems is that they serve large pools of consumers online, and they let you
target specific search keywords.
The disadvantages are numerous. Those most often cited include: the high cost of
bids for certain keywords, poor conversion rates on purchased clicks, and clíck
fraud (generally regarded as people clicking your link just so they can get paid
Personally, I have paid as high as a dollar per-click for a service that sells
for $35, and $20 in volume. I have spoken to others who operate for-profit
websites and have paid as much as $2.50 per clíck on an average keyword. In some
really competitive markets, people pay as much as $30 per clíck.
If you use the Web-Professor
bid tool to check keywords at Overture and you type in the keyword "mesothelioma",
you'll find 30 bidders vying for that term and a maximum bid of $29.88 per clíck!
If the maximum bidder converts traffïc to salës at the national average of 3%,
then he or she is paying an average of $900 to get one client! Insane, but true.
CPM (Cost Per Thousand Impressions) Advertising Model
CPM advertising is most often associated with banner advertising, but can nöw be
purchased for text ads as well. This type of advertising is available from many
CPM advertising can be cheaper than PPC, but it fails to address the
effectiveness of your advertising copy. Before undertaking a large CPM campaign,
you need to be confident your advertising copy will deliver results.
As with any other type of advertising, you need to track click-through and
conversion rates to determine the advertising copy that is most effective for
You also need to have a solid understanding of how many impressions it will take
to generate a visitor, and how many visitors you will need to generate one sale.
And, on the backside, you will need to know what the average earnings from your
salës will be. With these stats in hand, you'll know how much you can afford to
pay for CPM advertising or any other type of advertising.
Using Google Adwords, you can buy CPM advertising for as little as $2 per
thousand impressions. The one time I went that route, thinking my advertising
might be cheaper, I ended up dropping $180 in three days with only one sale to
show for my investmënt --- utilizing the exact same ad that generated a 4%
click-through rate (CTR) in Google's PPC advertising system.
The major appeal of CPM advertising is its perceived low-cost, with rates
ranging between $2 - $3 per thousand impressions.
The major disadvantage to this type of advertising is that you need a good
handle on how well your advertising is performing. Your advertising copy can
make or break you. Additionally, you need to keep an eye on your advertising
budget. From first hand experience, I can tell you that although CPM advertising
can appear inexpensive, it can in short order surpass the costs of PPC
Featured Listing Advertising Model
Featured listings differ from the other two advertising models in that you do
not pay for "ad clicks" or "ad impressions". With featured listings, your
advertisement appears in the purchased location for 30 days, 90 days, or one
Featured listings can be bought on individual websites and even on networks of
websites. Below are a few examples of advertising networks that offer featured
Geek Files offers various Featured Listing placement options with ad rates
ranging from $19 to $179 per month. You get two months frëe if you buy
advertising for a full year.
Aardvark Travel is a travel search engine. Featured listings appear in a colored
box between the top five listings and the bottom five listings in the
travel-related search results. There is a $50 setup fee for each Featured
Listing and a $10 per month recurring charge for as long as you keep your
listing active. Aardvark claims featured listings generate 40 times more clicks
than any other listings on their pages.
The Independent Search Engine & Directory
The ISEDN offers a program (powered by ExactSeek.com) that allows you to
purchase Top Ten
exposure for your website(s) across their network of 200 plus member
The network is comprised of specialized search engines, search directories, and
article directories. Featured Listing placements for specific keywords are
displayed across the entire ISEDN system.
The cost of a keyword term (the word or phrase associated with the listing) is
$12 for three months or $36 for 12 months. The price drops for each additional 5
listings you purchase. If you are buying in volume, discounts can be
significant. For example, the cost for 16 to 100 listings is $6 per listing for
3 months and $18 per listing for 12 months.
The main drawback to the ISEDN program is that the network, although large, does
not yet have the traffïc volume of the major engines.
The major benefit, of course, is that you can buy a lot more bang for your
advertising dollars. Additionally, you can see your ads \ appearing on pages in
a position that will attract more attention and click-through traffïc to your
Which Advertising Model Is Right For You?
It really depends on your business model. More so, it depends on your absolute
click-through averages and your website conversion rates.
Your advertising needs to cost you no more than what it earns for you. Ideally,
your advertising will cost less than it earns for you.
Some businesses trade on the lifetime value of customers and are willing to pay
more to get customers than what they earn on their first sale, but not all of us
can afford to build a customer base in the same way that Amazon built theirs.
If your advertising budget is small, your goal should be to make every
advertising dollar count. Grow your business to the point where you might be
able to afford some of the more expensive advertising solutions. But then, if
the lower-cost solutions generate salës for you, why would you want to pay more?
About The Author
Bill Platt is the owner of
http://thePhantomWriters.com Article Ghost Writing and Reprint Article
Distribution Services. Bill has been providing his services to online merchants
since 2001. If you would like to talk to Bill personally about his services, you
can reach him from 9:30am to 6pm CST at: (405) 780-7327.
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