If you click on the image of "wallets", you will see a lot of money coming out. This is what is happening in the world of Search Marketing with "Paid Placement" ( PPC Advertising which is related to CPC ). SEMPO did a report on "The State Of Search Marketing 2004" in December of last year. It showed on page 6 that "paid placement" received 81.8% & "Organic SEO" got only 12.0% of the approximate 4 Billion spent on the "2004 U.S. & Canadian Industry Size Estimate by Tactic". The total number will be a lot bigger for 2005!
Yet, in my post on "SEO Buyer Marketing Accountability" there is a quote from the SEM company, iCrossing who was one of 31 leading industry experts interviewed for that report: "Natural results attract the majority of internet search click-throughs - up to 80%, depending on the vertical and type of search." So, why is it that so many people take so much more money "out of their wallets" for "Paid Placement" vs. Natural "Organic SEO"? There are many reasons, but I believe the main ones are: 1. People who do marketing don't have to spend as much time educating themselves and making changes to their web site as they do with organic SEO (or, so they think), and 2. "Paid Placement" is a "quick fix" as results are instantaneous vs. over time. Maybe they even feel that "Paid Placement" is more "Pay For Some Kind Of Performance" vs. "Pay For 'Best Efforts' with No Guarantees"?
I believe that misperceptions born out of a lack of knowledge or actual bad experiences hurt both buyer and seller, along with the growth of the Search Marketing Industry. More people need to realize that "Paid Placement" is temporary unless you keep paying out money vs. "Organic SEO" that has some of its lasting benefits due to one time improvements to their web site. Of course, other SEO improvements like the addition of search engine spider friendly content, and an ongoing linking program need to be done on a regular basis. For the purpose of being succinct in this post, I will now concentrate on how people pay search engines and publishers for "Paid Placement" advertising, and deal with Natural "Organic SEO" in a future post.
As I said, "Paid Placement" can be viewed as "Pay For Some Kind Of Performance". The basic concept of "Pay For Performance" is nothing new. When I marketed online and offline, buyer guide, directory advertising for 20 years, I was paid on a "loan-draw" against a "straight commission" sales basis (as part of my own independent contractor, marketing-advertising rep business). Recently, the 11/18/05 "Kiplinger Letter" said: "Congress will soon link Medicare payments to the quality of care that patients receive..a concept known as 'Pay for Performance'", and "Performance-based bonuses promise to result in big improvements in how medicare patients are cared for based on recent pilot programs." It also said that the private medical sector will eventually adopt a similar program. So even doctors, one day, may be on some kind of a "Pay For Performance" compensation basis!
Here are the basic ways that people pay search engines and publishers for "Paid Placement" (as defined on page 4 of that SEMPO Report). Pay Per Click (PPC) "is sometimes seen by some as a middle ground between paying per impression and paying per action." Pay Per Action is based on the Cost Per Action (CPA). Paying Per Impression is based on the Cost Per Impression (CPM) or "Cost Per 1,000 Impressions". To me, Pay Per Action is really Pay Per Lead (PPL), and lastly there is Pay Per Sale (PPS) which is self explanatory. All of these advertising vehicles can get difficult and complicated to administer productively, so Search Marketing Agencies and Consultants are available (usually for a percentage of the ongoing "Paid Placement" investment) to help.
"Paid Placement" is a great short term strategy, but it should be combined with the longer term strategy of "Organic SEO", in my opinion. Do you agree?
Animated image courtesy of www.artie.com.
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