Beat the Price Creep
Paid inclusion offers a possible answer to escalating CPC prices
July 2006 By Ben Perry
The industry has witnessed much discussion and hand-wringing lately over the fact that the average cost per click (CPC) in the major pay-per-click (PPC) programs steadily has been increasing. This increase squeezes the return on investment (ROI) of the program for all participants, especially those at the top of the auction. Because PPC operates on an auction model in all the major engines, the end result is that prices inflate to whatever level the market will bear. What’s driving the pricing climb? The biggest factor is the ever-increasing number of advertisers entering the auctions, including brick-and-mortar companies with deep pockets looking to get into the game. Given these factors, it’s unlikely prices will ever come down substantially.
So what is a marketer to do? How can you maximize the dollars you have allocated for search marketing?
Demystifying the Answer
Your answer may be paid inclusion. Paid inclusion is a program that bridges the gap between natural search and paid search marketing. It works like this: A site owner submits to the search engine a data feed of some (or all) of the pages on its Web site, and agrees to pay a per-click fee if anyone clicks on one of its listings in the search engine results. The search engine guarantees that all the pages submitted will be included in its database, but does not guarantee any specific page position (as in normal PPC programs).
The pages populate the search engine’s natural search database, and are served within the natural search results when a user conducts a query. These paid inclusion listings are indistinguishable to the end user from other unpaid, natural search listings.
Understanding the Benefits
At this time, many of the paid inclusion programs do not have enough search traffic volume to make them worth pursuing, save for Yahoo! The largest by far is the Yahoo! Search Submit program that feeds results to Yahoo! and other sites in the Yahoo! network. This program offers a number of advantages over PPC programs, but also has a few limitations (as is the case with the smaller paid inclusion programs, too). Let’s start with the benefits.
• Better ROI. The No. 1 reason to participate in paid inclusion is the ROI that this program typically offers. As previously mentioned, normal PPC programs (Google AdWords, Microsoft’s AdCenter and Yahoo! Search Marketing’s Sponsored Search) have CPC prices that inflate over time due to the dynamics of their auction-based pricing models. The CPC prices in those engines also tend to increase during peak times, such as the holiday season for retailers. The economics of the auction model are generally such that if you want to get a higher volume of clicks, you have to bid for a higher position and pay more for each click. This ultimately results in an ROI equation that squeezes your margins more and more as your number of sales climbs higher and higher. Paid inclusion effectively addresses this dilemma.
So what is a marketer to do? How can you maximize the dollars you have allocated for search marketing?
Demystifying the Answer
Your answer may be paid inclusion. Paid inclusion is a program that bridges the gap between natural search and paid search marketing. It works like this: A site owner submits to the search engine a data feed of some (or all) of the pages on its Web site, and agrees to pay a per-click fee if anyone clicks on one of its listings in the search engine results. The search engine guarantees that all the pages submitted will be included in its database, but does not guarantee any specific page position (as in normal PPC programs).
The pages populate the search engine’s natural search database, and are served within the natural search results when a user conducts a query. These paid inclusion listings are indistinguishable to the end user from other unpaid, natural search listings.
Understanding the Benefits
At this time, many of the paid inclusion programs do not have enough search traffic volume to make them worth pursuing, save for Yahoo! The largest by far is the Yahoo! Search Submit program that feeds results to Yahoo! and other sites in the Yahoo! network. This program offers a number of advantages over PPC programs, but also has a few limitations (as is the case with the smaller paid inclusion programs, too). Let’s start with the benefits.
• Better ROI. The No. 1 reason to participate in paid inclusion is the ROI that this program typically offers. As previously mentioned, normal PPC programs (Google AdWords, Microsoft’s AdCenter and Yahoo! Search Marketing’s Sponsored Search) have CPC prices that inflate over time due to the dynamics of their auction-based pricing models. The CPC prices in those engines also tend to increase during peak times, such as the holiday season for retailers. The economics of the auction model are generally such that if you want to get a higher volume of clicks, you have to bid for a higher position and pay more for each click. This ultimately results in an ROI equation that squeezes your margins more and more as your number of sales climbs higher and higher. Paid inclusion effectively addresses this dilemma.
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