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The History of PPC Advertising

During February 1998, Jeffrey Brewer of Goto.com presented a pay per click search engine proof-of-concept to the TED conference in California, USA. This presentation rocked the advertising industry and led to the establishment of the PPC advertising program. Credit for the concept of the PPC program is generally given to the Idealab and Goto.com founder, Bill Gross.

Yahoo.com started its PPC service in 1998.

Although Google started search engine advertising in December 1999, it was not until October 2000 before the AdWords system was introduced, where users were allowed to create text ads for placement on the Google search engine.

Officially PPC advertising was only introduced in 2002, but until then advertisements were charged at a ‘cost per thousand impressions’ rate.

What is PPC advertising?

Pay per click (PPC) is an Internet advertising program used on websites from around the world. In this business model the advertiser will only pay the host once an advertisement is clicked. The advertiser will typically bid on keyword phrases relevant to the product, service or website they want to advertise.

Cost per Click (CPC) refers to the amount of money the advertiser will pay the each time an advertisement is clicked.

A website that makes use of PPC advertisements in generating income will display the advertisements throughout the website or on specific pages. Generally webmasters sign up as a publisher with a host, the same institution where the advertiser signed up as an advertiser. Every time a visitors clicks on an ad, the cost to the advertiser will be shared between the host and the webmaster.

There are a large number of PPC providers from around the world, but the three largest operators are Google AdWords, Yahoo! Search Marketing and Microsoft AdCenter.

Determining Cost per Click

Currently determining the cost per click is based on two primary factors: Flat-Rate and Bid-Based.

Flat-Rate PPC

With flat-rate PPC programs the advertiser and the publisher have agreed upon a fixed amount that will be paid for each click.

Bid-Based PPC

With this program the advertisers enters into a contract that allows them to compete against other advertisers in a private auction hosted by a publisher or the advertising network. Here each advertiser will indicate to the host the maximum amount he is willing to pay per click for a specific ad spot.

It is a common fact that the majority of webmasters are experiencing a decrease in PPC earnings from a number of PPC advertising companies. In recent months we saw a number of reports from webmasters stating that earnings per click have decreased across the board.

One need to keep in mind that there are a number of factors that may influence the costs per click on advertisements. One of these factors are the origin of visitors. It is a general fact that visitors from countries such as the US, UK, Europe and Australia will generate larger income per click than visitors from other parts in the world. Take a look at your stats and see if there are any noticable changes in traffic to your website.

Another factor is website content. If your website expanded and include more content not related to the niche, your website will attract non-related advertisements which may pay less in PPC. Always ensure that you re-visit your website and look up on the latest content added. Pay attention to the keywords contained throughout the site as this may directly influence your earnings.

Personally we suspect that the biggest contributor to the decrease in PPC earnings is the current global financial crisis. As more companies focus on cost-saving they also close the taps on advertising expenditures. This in turn directly impact on PPC advertising companies. Due to lower numbers in advertising PPC revenue sharing with publishers also decrease.

One can only wait and see how PPC earnings will be effected once an upturn in the financial crisis occurs.

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Although still new in the market we look forward to seeing what this company offers and whether webmasters will benefit from advertising revenue.

The majority of webmasters on the Internet make use of Pay Per Click (PPC) advertising in generating income from their websites. PPC advertising is as simple as signing up with a service provider and placing a piece of code on the webpages where the webmaster wants advertisements to appear. The webmaster will generate income from every visitor clicking on an advertisement.

Many webmasters ask the question: ‘Which is the best paying PPC advertising service?’

Our answer is undoubtedly Google Adsense – www.google.com/adsense

Google Adsense is the leading PPC advertiser offering webmasters the fastest and largest percentage sharing in advertising sales. Not only this, but Adsense also offer webmasters content orientated advertisements, meaning that ads which appear on the webmasters’ website will be similar to the content offered by the webmaster, increasing the likelihood that visitors will click on advertisements.

Google Adsense, however, is not an easy program to join. They have strict terms and conditions in place as well as a stringent approval process. Not too many webmasters will have the opportunity to join Adsense on the first application. Adsense are looking at quality websites to offer their advertisers advertising space and will not approve just any website.

If your first application fails, look at Adsense reasons for rejection and work on your website. Submit your application a second and third time. It will be worth your while when compared to other PPC advertising services in the market.