The History of PPC

Mark Covert

PPC Strategist

Do you ever lie awake at night wondering how PPC came to be? Probably not. Yet even though the existence of pay per click advertising may not be something that keeps you up at night, it’s helpful to look back at where it came from. PPC has gotten a bad reputation over the years, and some even claim it’s dead. Before you jump to any conclusions, take the time to understand PPC and how it came to be. You may just discover a newfound appreciation for it.

Many people assume that pay per click started in the early 2000’s, around the time that Google announced the CPC version of AdWords. This was an important time. A game changer, in fact. But it wasn’t the birth of PPC. Instead, PPC dates back to 1996. Yes, the year that eBay and Ask Jeeves was formed. Or when the Spice Girls came out with the hit song “Wannabe.”

Let’s take a closer look at the birth and life of pay per click.

1996

  • Planet Oasis was the first company to offer PPC advertising spaces on a desktop application. (Speaking of Oasis, they, too, were a popular band in 1996. But enough about that.).

  • Open Text Index jumps on board and starts selling PPC ads in their search results. They are called “Preferred Listings” and they don’t have a good reputation.

  • Stanford University starts a brand new project called Google. Some project.

  • Yahoo! launches its IPO, giving it a value of $334 million.

1997

  • Just one year later, 400+ big brands are using PPC ads in the search results to bring their products and services exposure.

  • The cost for PPC ads are $0.005-$0.25 per click. Not too shabby.

  • Ever had buyer’s remorse? Well it probably wasn’t as bad as this deal. Yahoo! refuses an offer to buy Google for $1 million.

1998

  • Early in the year, GoTo.com begins to design an auction system for keywords that we know as PPC today. By mid-1998, advertisers are already paying as much as $1 a click because of the new system.

1999

  • GoTo.com continues to fine tune their auction system by creating a tool set that gives advertisers the opportunity to bid on keywords in real time.

2000

  • The internet ad market crashes and burns. Many businesses go bankrupt as a result. Advertisers are now hesitant to invest money into PPC campaigns.

  • Google is not afraid. It launches a self-service platform that lets advertisers choose which keywords to place ads on. Advertisers simply pay when their ad is shown, making it much more stable than before.

  • Oh, and Y2K happens.

2001

  • GoTo.com gives itself a fresh name: Overture Services. It partners with several different search engines, including Yahoo! and MSN.

  • Overture brings in the big bucks with $288 million in ad revenue, while Google’s ad revenue hits $85 million for pay per impression ads.

2002

  • Google AdWords designs a brand new PPC model for advertisers. The setup uses ad relevance for ranking and has the goal of improving experience for users and revenue for businesses.

  • Shopping.com gives ecommerce sites the chance to bid per click to have their products featured on the site. Other shopping sites do the same, creating healthy competition between brands.

2003

  • Yahoo! takes on Overture for $1.63 billion.

  • Google has an exciting year. It purchases Applied Semantics and introduces Adsense. With these changes, content publishers now can serve PPC advertising to the right audience.

2004

  • Google starts to grow. Its responsible for 84.7% of all online searches.  

2005

  • Google recognizes that click fraud is an issue and rolls out methods to prevent it from happening.

  • Google launches Google Analytics, giving advertisers the power to track and measure their advertising campaigns.

2006

  • Microsoft ends its agreement with Overture as its search ad provider and launches its own PPC advertising platform called adCenter.

  • Facebook launches advertising on its website and joins forces with adCenter for banner ads and sponsored links.

  • Google buys out YouTube for $1.65 billion. It’s the world’s largest online video website.

2007

  • Facebook gets smart and introduces its own advertising platform. What makes the ad platform unique is that it allows advertisers to target users by demographics and interests.

2008

  • Google works on its relevance score (also known as quality score) to enhance the search experience and maximize revenue.

  • LinkedIn takes a page from Facebook’s book and launches DirectAds. This platform allows advertisers to reach out to users based on demographics, job title or industry.

2009

  • Mobile device usage is increasing, forcing the PPC networks to incorporate more mobile advertising solutions.

2010 - Current

  • Microsoft gets a makeover and relaunches as Bing and partners with Yahoo! to syndicate their ads. The goal is to compete with Google.

  • Google AdWords isn’t slowing down. It adds new advertising options, including Product Listing Ads and Remarketing.

  • Facebook develops Sponsored Stories. However, they later get a lawsuit for this, so the advertising tactic is removed.

  • Cost per clicks continue to increase across networks. “Insurance” keywords and “loans” keywords are some of the hottest.

  • Google introduces Enhanced Campaigns, and Facebook launches its own remarketing solution that is able to be used with mobile or web apps. Twitter also rolls out a self-service advertising platform.

  • Advertising spend continues to expand, with mobile spend up to 98% YoY.

The Current State of PPC

Today, pay per click is very much alive. It’s an investment, however. That’s why you need to be smart about launching PPC campaigns. This includes being realistic about your goals and knowing when the best time to launch a campaign is.

For example, pay per click is ideal when you’re looking for quick traffic and results. It can also identify which keywords are converting well. This will allow your SEO team to be more efficient in their marketing efforts.

Setting a budget for PPC is also easy. You only have to pay when an interested person clicks on your ad. Plus, you can reach your target consumer at the right time and with the right ad thanks to enhanced targeting options.

Who knows what the future will bring with PPC, but we can certainly say we’ve enjoyed the ride so far!

 
About the Author: Mark Covert

Mark has joined the SEM Geeks team as a PPC Strategist in early 2015. Mark graduated from East Stroudsburg University with a Bachelor’s of Science in Sports Management and a minor in Business. Mark started out early on in his career from freelancing web design, which ultimately evolved into marketing clients websites to create a great user experience and the best possible results for both parties. Prior to joining the Geeks, he has worked for DNA marketing, managing several large Fortune 500 paid search clients, while continuing to refine his skills and knowledge within the industry.

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