How PPC Campaign Managers Drive Business Growth
PPC is a sponsored search mechanism, originally introduced by Overture and formerly known as Goto.com; the proof of concept was initially presented at a conference in California in 1998 (Ellam, 2004), which was eventually developed into a full-fledged advertising channel. Leading online multinationals, such as Google, Yahoo!, and others have made PPC a huge advertising business worth billions of dollars (Dellarocas, 2012). Google is well known for
achieving a 39-fold increase in its total revenue over a period of five years (2002- 2007), mostly from the very popular keyword advertising (Liu et al., 2010). Google’s AdSense, ruling the keyword advertising business for the corporation, came into being in 2003 (Ratliff and Rubinfeld, 2010). It is said that, given Overture’s full control on the PPC market, Yahoo! decided to buy Overture in 2003. According to Jerath et al (2011), the sponsored search form
of advertising is expected to rise at an exponential compound rate of 12%, annually. Display advertisements can be found on content offering websites and search engines in one of the following formats – banners, rich media, text, video, and others (Kwon, 2011). Liu et al (2010) explain that there are two variants in keyword advertising – sponsored link type where the advertising is based on keywords entered by the visitors in the search engines, and
Contextual advertising where the
advertisements appear based on keywords present in the content the visitors are viewing. Every featured advertisement carries a hyperlink/sponsored link, which when clicked will navigate the visitor to advertiser’s website (Sarma et al., 2012). This form of advertising works on an auction based payment system like PPC/CPC (Chen et al., 2007). According to Kennedy and Kennedy (2008), the purchased and organic listings are dichotomous, with the
purchased listings displaying different, not necessarily negativcontent to the visitors. The purchased/sponsored listings are generally placed distinguishingly from the organic listings and most often labelled as advertisements in the search page results (O’Connor, 2009). Nunan and Knox (2011) show that a normal keyword search result page on Google can
contain links to about 32 sites, of which up to 11 can be PPC links. PPC has gained popularity as an effective digital advertising tool (Cudmore et al., 2009). The retailer who advertises on a third party site owes the third party owner an amount that is preset during a competitive bidding process (Chen et al., 2007). This amount is based on the number of clicks on the advertisement featured in the third party site, which redirects shoppers to retailers’ exclusive
During PPC auctions advertisers
submit bids on the amount they are willing to pay for every click their advertisement will get; this means that every keyword is auctioned and the bidding amount decides which advertisements win a spot on a publisher’s website, and in which order they will be featured on those websites (Sarma et al., 2012). The costs associated with auctions are said to change often, and the entire process can become expensive, considerably burdening a
business that has a limited advertising budget (Kennedy and Kennedy, 2008). The manner in which these auctions are executed varies depending upon the search engine (Douzet, 2006). According to Fain and Pedersen (2006), Google and Yahoo! constantly run auctions where an advertiser can at any time bid higher to replace a competitor’s advertising spot. Chen et al (2007) put forth that only a limited percentage of these clicks are successful in materializing into sales. The act/stage at which a visitor landing at the advertiser’s website makes an
purchase is termed as conversion (Jansen and Schuster, 2011). A primitive version of PPC is the pay per impression (PPI) model, also known as pay per exposure (PPE). With PPI, the advertiser pays the web publisher to even appear (bedisplayed/featured) on their page/website (Sarma et al., 2012). With PPC, advertisers pay when a visitor clicks on their advertisement (Clarke, 2008). A new day cost per action (CPA) or price per action (PPA)
Is an advancement of the PPC model
Cudmore et al (2009) explain that this competing CPA model performs on the basis of any action initiated by the visitor; instead of paying for a click on the advertisement, the advertiser pays only if the visitor performs some valid action, like purchasing a product/service, or signing up for updates, and so on. Another variant is the pay per call (PPC) model, where the advertiser owes money only if they receive a call from the customer that has been processed
through an Internet form (Dellarocas, 2012). With PPC advertising, there are three beneficiaries - web publisher or search engine displaying advertisements (Google), advertiser who has been successful in attracting consumer attention, and consumers who find what they search for on the internet, along with the website and price at which that product/service can be bought online (Eaton and Kenyon, 2014). Advantages and Limitations of PPC PPC is
acknowledged as not only a successful form of advertising, but also as one of the most highly publicized form of performance-oriented advertising strategies (Dellarocas, 2012). When an Internet user enters keywords, the search results that appear across several pages are termed organic results; PPC oriented advertisements related to those keywords appear at different corners of the result page. Liu et al (2010) attribute the success of PPC advertising
Conclusion
its ability to track statistics such as the number of clicks and percentage of sales made from those clicks. According to them, such valuable information can substantially assist advertisers and marketers to better design their advertising campaigns, and gain improved control overkeyword auctions. Nunan and Knox (2011) attribute the increasing popularity of PPC advertising to its ability to enable advertisers to effectively allocate their resources. The most
apparent advantage of using PPC, as Sobusta (2008) suggests, is that the web user who is seeing a PPC advertisement on their search result page is already interested in the advertisement being displayed given they used one of its keywords. This prior interest increases the chances of that web user being interested in buying the product/service featured in that PPC advertisement. Eaton and Kenyon (2014) explain that such PPC
advertisements on a result page are far less in number than the organic results, and thus have a better chance at catching the eye of the web user, in turn making the advertiser’s chances of attracting a click. Another advantage that Eaton and Kenyon (2014) reflect on is the possibility of localizing PPC advertising. With PPC, instead of globally advertising, a business can choose to advertise in the region they most expect their consumers to be
located. When advertised globally, a business is undoubtedly in a better position of attracting more clicks, but if a business is localized and cannot cater to consumers everywhere, they can choose to localize their advertisements for only the most potential consumer group. Advertising to smaller geographical regions limits the advertisement’s visibility, attracting lesser clicks, making lesser amount payable to the web publisher/search engine displaying
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