 |
| PPC Advertising History |
PPC Advertising History
You have learned that search engines display results to search queries based on proprietary algorithms. Each major search engine uses its own formula to determine what results to display for any term. All of this is available to web users for free! With about 80% of web users using search engines as a starting point (Jansen and Molino, 2006), that’s a lot of traffic going through search engines each day. So, search engines require a way of generating revenue from all that traffic.
In 1996, the Open Text Index search engine began allowing web sites to pay for a preferred ranking in selected results pages, to mixed response from business owners and other search engines. However, this was pay for placement, not that different from paid inclusion, where advertisers were paying to appear in the search results, whether or not a user clicked through to their site.
In February 1998, GoTo.com launched. This was a new search engine that allowed web site owners to bid for placement in the search results pages for specific search terms. Results were ranked according to how much the web site owners were willing to bid, with the highest bid appearing at the top of the page. The web site owner would only pay for each click, as opposed to for appearing on the results page. By July 1998, advertisers were paying up to a dollar for each click! GoTo.com changed its name to Overture Services Inc in 2001, and was acquired by Yahoo! in 2003. GoTo.com partnered with portals Yahoo! and MSN to monetise their search queries.
Overture successfully patented their PPC mechanism for search engines (“System and method for influencing a position on a search result list generated by a computer network search engine” was patented in 2001), and has since then pursued, successfully, lawsuits against other PPC providers, including Google. Overture initiated infringement proceedings under this patent in 2002, and settled with Google after it had been acquired by Yahoo!. Google agreed to issue 2.7 million shares of common stock to Yahoo! in exchange for a perpetual license.
Google started search engine advertising in December 1999 and launched AdWords in October 2000. AdWords allowed advertisers to place keyword targeted listings, but charged advertisers on a CPM basis. Google launched PPC advertising in February 2002, and today, advertising counts for about 99% of Google’s revenue.
You have learned that search engines display results to search queries based on proprietary algorithms. Each major search engine uses its own formula to determine what results to display for any term. All of this is available to web users for free! With about 80% of web users using search engines as a starting point (Jansen and Molino, 2006), that’s a lot of traffic going through search engines each day. So, search engines require a way of generating revenue from all that traffic.
In 1996, the Open Text Index search engine began allowing web sites to pay for a preferred ranking in selected results pages, to mixed response from business owners and other search engines. However, this was pay for placement, not that different from paid inclusion, where advertisers were paying to appear in the search results, whether or not a user clicked through to their site.
In February 1998, GoTo.com launched. This was a new search engine that allowed web site owners to bid for placement in the search results pages for specific search terms. Results were ranked according to how much the web site owners were willing to bid, with the highest bid appearing at the top of the page. The web site owner would only pay for each click, as opposed to for appearing on the results page. By July 1998, advertisers were paying up to a dollar for each click! GoTo.com changed its name to Overture Services Inc in 2001, and was acquired by Yahoo! in 2003. GoTo.com partnered with portals Yahoo! and MSN to monetise their search queries.
Overture successfully patented their PPC mechanism for search engines (“System and method for influencing a position on a search result list generated by a computer network search engine” was patented in 2001), and has since then pursued, successfully, lawsuits against other PPC providers, including Google. Overture initiated infringement proceedings under this patent in 2002, and settled with Google after it had been acquired by Yahoo!. Google agreed to issue 2.7 million shares of common stock to Yahoo! in exchange for a perpetual license.
Google started search engine advertising in December 1999 and launched AdWords in October 2000. AdWords allowed advertisers to place keyword targeted listings, but charged advertisers on a CPM basis. Google launched PPC advertising in February 2002, and today, advertising counts for about 99% of Google’s revenue.
