Google Debuts Cost-Per-Click Self-Service Advertising

Share this content:
Search engine Google Inc. is confronting rival Overture Services head-on with a new self-service advertising program called AdWords Select that features cost-per-click pricing.


Cost-per-click pricing has been a mainstay of Overture's business model from its early days when it was known as GoTo.com. Cost-per-click ranks ads based on how much the advertiser is willing to pay per click -- pricing can range from a penny per click to many dollars.


Google's version of the cost-per-click model differs from Overture's in that it ranks ads based not only on how much an advertiser pays, but also on popularity. Using AdWords Select, advertisers pay when a visitor clicks on their ad. Google's previous program, AdWords, was based on a traditional system that required payment by the number of impressions delivered. As with AdWords, AdWords Select orders ads in a separate column on the right side of a search page.


"Unlike cost-per-click services, the top position is not automatically granted to the advertiser willing to pay the highest CPC," said David Krane, a Google spokesman. "AdWords Select ranking is determined by a combination of the ad performance (click-through rate) and how much an advertiser agrees to pay per click. This ranking method ensures that users see the most relevant ads first."


Also unlike its rival, advertisers' ads appear online immediately using the Google AdWords Select service. Using Overture's services, advertisers have to wait hours or even days while someone checks their ad for suitability.


However, analysts said Google's new service likely will not amount to much of a threat to Overture. In a statement, U.S. Bancorp Piper Jaffray Internet analyst Safa Rashtchy noted that Overture has deals with most of the major Web portals, including AOL Time Warner's America Online service, Microsoft's MSN and Yahoo.


He also said that Overture enjoys a big lead in the market, with 54,000 advertising partners. Google, he said, has about 1,000 partners.


Google said AdWords Select will not affect its premium ads sponsorship service, which enables advertisers to buy results targeted to keywords. The company charges $25 to $80 per thousand for premium sponsorships, which appear above the results on a search page.


close

Next Article in Digital Marketing

Sign up to our newsletters

Company of the Week

Since 1985, Melissa has helped thousands of companies clean, correct and complete contact data to better target and communicate with their customers. We offer a full spectrum of data quality solutions, including global address, phone, email, and name validation, identify verification - available for batch or real-time processes, in the Cloud or on-premise. Our service bureau provides dedupe, email/phone append and geographic/demographic append services for better targeting and insight. For direct mailers, Melissa offers easy-to-use address management/postal software, list hygiene services and 100s of specialty mailing lists - all with competitive pricing and excellent customer service.

Find out more here »

Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here

Relive the 2017 Marketing Hall of Femme

Click the image above