The phenomenal growth of pay-per-click advertisement amid uncertainties

Today pay-per-click advertising, by and large, is assumed to be one of the quickest and effective ways of promoting one’s business online. To many it is still an effective medium to get listed in the top of the search engines without having to undertake strenuous preparatory works for search engine optimization.

But the beginning was not the same as it is now. Rather this concept encountered bleeding teething problems in its progressive strides. The idea was not well-received; some critics even went to the extent of prophesying that it is definitely headed for a doom.

People questioned the rationale of paying any penny for getting web site in prominent positions where the search is exclusively keyword driven. They justified their proposition by saying that as against the banner ad, pay-per-click is relatively minor advertising stunt, and that too is not there all the time.

As of now, situations have taken a positive turn. The success saga of pay-per-click advertising is known to one and all. Now advertisers promptly bid on keywords, promising to pay certain amount of money every time someone clicks on their ad, which pops up when a search exercise is performed by any surfer.

Pay-per-click advertisement is in eye of the storm

Pay-per-click advertisement has grown over the years, but it has also become susceptible to what is referred to as “Click Fraud.” There are an increasing number of people, who have mastered the art of tampering with pay-per-click advertisement, and have posed a real threat to the prospects of pay-per-click advertisement for online advertisers and the companies offering them.

Click fraud comes into picture when a user -- accidentally or deliberately -- or a competitor with malafide intention, clicks on a business’ ad and subsequently disappears into the thin air. No actual use of the advertisement – mere clicking through. Such instances tend to inflate the earmarked advertising budget of the company which has chosen this medium for online sales and marketing. On the other side of the fence, it adds to earning potential of an affiliate web site which hosts pay-per-click advertisement campaign on behalf of select companies opting for this genre online advertising. Statistics from the industry reveal that click frauds account for as high as 20 per cent for certain keywords. Further, estimate suggests that one out every five dollars spend on pay-per-click advertisement goes down the drain.

What led to the present messy situations?

Definitely the present state of pay-per-click advertisements has given its doom pundits a reason to rejoice, and they may be basking in their proud moments. Many companies have turned to the advantages of such kind of web promotion, while small and mid-sized firms have realized that pay-per-click- advertisement is particularly beneficial for them because they don’t have to put in much investment.

This was until click fraud did not begin to spread its ugly wings. Now it is a roller-coaster ride for companies, and they are wishing to have some way for plugging in the loopholes existing in the system.

Let’s understand the reasons for such messy state of affairs.

The “gold rush” can be blamed on more than one count. This fact is deplorable that it is excessively easy to publish pay-per-click advertising links from Google and Yahoo. What suffices for the purpose is joining Google AdSense or corresponding Yahoo program. Your business gets a fillip, and you do not have to spare even a penny.

It is highly inexpensive to purchase a domain name, and this is another major reason for the predicament pay-per-click advertisement is faced with. VeriSign, which runs the .com and .net domain names, offers domain names for as little as $6 to $7 per year. Hence, a web site hosting pay-per-click ads doesn't’t need to get many people clicking through its ads in order to turn a profit. To make it worse, there is five-day “Add Grace Period,” during which new registrations can be deleted for a full refund.

Is the time ripe for switching over to other online advertising model, if any?

Bill Gross was the force behind GoTo.com’s “pay-per-click” advertising model which heralded an era of pop-ups advertisement. GoTo.com was subsequently purchased by Yahoo in 2003, and later on Google also adopted a similar online advertising medium called AdWords. But click fraud inflicted them all.

Bill Gross’ new advertising model called cost-per-action holds answer to challenge posed by click fraud. The model aptly called cost-per-action is based on the premise that companies do not have to pay every time a user clicks on an ad and enter their web sites. Payment becomes obligatory only when clicking through an ad leads to a desired action, for instance, a purchase, filling out a firm, downloading some stuff and so forth. The bottom line in this model is that this is mutually beneficial this time around on an equitable basis.

This model is inherently and fundamentally strong not to give click fraud a chance. Click fraud occurs when someone visits an advertiser’s web site with malicious intention for securing pecuniary advantage or harming the interest of other partner. Since the advertiser is no longer under obligation to pay for damn mindless clicks, click fraud can’t happen.

Snap.com is leading from the front

This online advertising model, better described as “a next-generation search engine for broadband users.” was characteristic feature of Snap.com, which launched it for the first time. Snap.com has some other enabling technology going for it. It joins algorithmic search results together with human click stream data, and calls it “behavioral ranking.” The cardinal principle here is that sites which give people more value will rank higher than others who do not. Snap.com holds the reason that values are measurable in terms of quality of content and number of transactions completed. The higher the qualities of content, the longer surfers are likely to be engrossed is what Snap.com believes in.

Cost-per-action model seems to be all set to grow manifold. Sooner than the later, it will influence other search engines to adopt their own versions of its model and become more customer-centric. The possibility is not far off that this time around Bill Gross’s innovative approach is deservedly purchased by Google.