Paid Search Marketing is a perfect example of a Win-Win business model In fact it is a Win-Win-Win model as there are no losers. Perhaps that is not entirely true, but the only loss to factor in is the small risk of alienating some potential customers.
Let’s look at it in more depth. Firstly the main service provider, say one of the principal search engine companies, allows their customers to bid for key words or decide on a maximum cost per click. The customer must carry out a cost benefit analysis in order to decide the maximum they are willing to pay for the amount of traffic they wish to drive to their website. Initially they may choose a non-optimal strategy but as they gain experience this will be refined. Eventually they will develop a clear strategy which will almost certainly contain dynamic elements that they can fine tune to match market tidal flows and other instabilities and discontinuities. They are happy bunnies paying the right price for the service. They are winning.
The provider is also a winner. They look at the price their customer has decided to pay in terms of the bid price along with other factors. They assign what is termed an Ad Rank. The manner in which this is assigned varies between companies, but one major search engine uses a formula that include the price, the click through rate, the cost per click and what they call a quality score. The quality score is a measure of the relevance of the chosen keyword (you can use a keyword tracking tool for this) to the context of the advert. The higher the Ad Rank the more prominent the position of the ad on the search page. Paid Search Marketing is the major, if not the only, revenue earner for the major players. They have invested considerably in the development of these services which are now generating a substantial income.
The third winner is Jo Public. Amongst his search results are links to sponsored websites. The fact that the listing is commercial is clearly marked so he/she has the choice to follow it or not. He/she knows that the link will be highly relevant to his/her search as considerable effort has been expended in ensuring its relevance. He/she has lost nothing, and may choose to be a winner also. Three winners can’t be bad.
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Pay per click is an ever changing and developing vertical. Be sure your on top of your pay per click campaign by utilising the services of Marketdefender.com.
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