PPC and AdSense (Google AdSense)

Pay Per Click (PPC)

Pay per click (PPC) is an advertising model used on search engines, advertising networks, and content websites/blogs, where advertisers only pay when a user actually clicks on an ad to visit the advertiser's website. Advertisers bid on keywords they predict their target market will use as search terms when they are looking for a product or service. When a user types a keyword query matching the advertiser's keyword list, or views a page with relevant content, the advertiser's ad may be shown. These ads are called a "Sponsored link" or "sponsored ads" and appear next to or above the "natural" or organic results on search engine results pages, or anywhere a webmaster/blogger chooses on a content page.

Pay per click ads may also appear on content network websites. In this case, ad networks such as Google AdSense and Yahoo! Publisher Network attempt to provide ads that are relevant to the content of the page where they appear, and no search function is involved.

While many companies exist in this space, Google AdWords, Yahoo! Search Marketing, and Microsoft adCenter are the largest network operators as of 2007. Depending on the search engine, minimum prices per click start at US$0.01 (up to US$0.50), these prices are often referred to as Costs Per Click (CPC). Very popular search terms can cost much more on popular engines. Arguably this advertising model may be open to abuse through click fraud, although Google and other search engines have implemented automated systems to guard against this.

Categories
PPC engines can be categorized into two major categories "Keyword" or sponsored match and "Content Match". Sponsored match displays your listing on the search engine itself whereas content match features ads on publisher sites and in newsletters and emails.

There are other types of PPC engines that deal with Products and/or services. Search engine companies may fall into more than one category. More models are continually evolving. Pay per click programs do not generate any revenue solely from traffic for sites that display the ads. Revenue is generated only when a user clicks on the ad itself.


Keyword PPCs
Advertisers using these bid on "keywords", which can be words or phrases, and can include product model numbers. When a user searches for a particular word or phrase, the list of advertiser links appears in order of the amount bid. Keywords, also referred to as search terms, are the very heart of pay per click advertising. The terms are guarded as highly valued trade secrets by the advertisers, and many firms offer software or services to help advertisers develop keyword strategies. Content Match, will distribute the keyword ad to the search engine's partner sites and/or publishers that have distribution agreements with the search engine company.

As of 2007, notable PPC Keyword search engines include: Google AdWords, Yahoo! Search Marketing, Microsoft adCenter, Ask, LookSmart, Miva, Yandex and Baidu.


Online Comparison Shopping Engines
"Product" engines let advertisers provide "feeds" of their product databases and when users search for a product, the links to the different advertisers for that particular product appear, giving more prominence to advertisers who pay more, but letting the user sort by price to see the lowest priced product and then click on it to buy. These engines are also called Product comparison engines or Price comparison engines.

Some Online Comparison Shopping engines such as Shopping.com use a PPC model and have a defined rate card. whereas others such as Google Product Search, part of Google Base (previously known as Froogle) do not charge any type of fee for the listing but still require an active product feed to function.

Noteworthy PPC Product search engines include: Shopzilla, NexTag, and Shopping.com.


Service PPCs
"Service" engines let advertisers provide feeds of their service databases and when users search for a service offering links to advertisers for that particular service appear, giving prominence to advertisers who pay more, but letting users sort their results by price or other methods. Some Product PPCs have expanded into the service space while other service engines operate in specific verticals.

Noteworthy PPC services include NexTag, SideStep, and TripAdvisor.


Pay per call
Similar to pay per click, pay per call is a business model for ad listings in search engines and directories that allows publishers to charge local advertisers on a per-call basis for each lead (call) they generate. The term "pay per call" is sometimes confused with "click to call". Click-to-call, along with call tracking, is a technology that enables the “pay-per-call” business model.

Pay-per-call is not just restricted to local advertisers. Many of the pay-per-call search engines allows advertisers with a national presence to create ads with local telephone numbers.

According to the Kelsey Group, the pay-per-phone-call market is expected to reach US$3.7 billion by 2010.


Pay per delivery (PPD)
A variation on pay per click used in email marketing, whereby email marketing campaigns are charged only on the basis of successfully delivered emails.


History
In February 1998, Jeffrey Brewer of Goto.com, a 25 employee startup company (later Overture, now part of Yahoo!), presented a PPC search engine proof-of-concept to the TED8 conference in California.This and the events that followed created the PPC advertising system. Credit for the concept of the PPC model is generally given to the Idealab and Goto.com founder, Bill Gross.

Google started search engine advertising in December 1999. It was not until October 2000 before the adwords system was introduced. Allowing advertisers to create text ads for placement on the search engine. However PPC was only introduced in 2002, until then, advertisements were charged at CPM. Yahoo Advertisements have always been PPC, since its introduction in 1998.

Source:
http://en.wikipedia.org/wiki/Pay_per_click
http://ppcandadsense.blogspot.com/

Google AdSense

Google AdSense, commonly just AdSense, is an ad serving program run by Google . Website owners can enroll in this program to enable text, image and, more recently, video advertisements on their sites. These ads are administered by Google and generate revenue on either a per-click or per-thousand-impressions basis. Google is also currently beta-testing a cost-per-action based service.

Overview
Google uses its search technology to serve ads based on website content, the user's geographical location, and other factors. Those wanting to advertise with Google's targeted ad system may sign up through AdWords . AdSense has become a popular method of placing advertising on a website because the ads are less intrusive than most banners, and the content of the ads is often relevant to the website.

Currently, AdSense uses JavaScript code to incorporate the advertisements into a participating site. If it is included on a site which has not yet been crawled by the Mediabot , it will temporarily display advertisements for charitable causes known as public service announcements (PSAs). (The Mediabot is a separate crawler from the Googlebot that maintains Google's search index).

Many sites use AdSense to monetize their content and some webmasters work hard to maximize their own AdSense income. They do this in three ways:
They use a wide range of traffic generating techniques including but not limited to online advertising.

They build valuable content on their sites which attracts AdSense ads which pay out the most when they get clicked.
They use copy on their websites that encourage clicks on ads. Note that Google prohibits people from using phrases like "Click on my AdSense ads" to increase click rates. Phrases accepted are "Sponsored Links" and "Advertisements".
The source of all AdSense income is the AdWords program which in turn has a complex pricing model based on a Vickrey second price auction, in that it commands an advertiser to submit a sealed bid (not observable by competitors). Additionally, for any given click received, advertisers only pay one bid increment above the second-highest bid.

History
The underlying technology behind AdSense was derived originally from WordNet and Simpli , a company started by the founder of Wordnet — George A. Miller — and a number of professors and graduate students from Brown University , including James A. Anderson , Jeff Stibel and Steve Reiss. A variation of this technology utilizing Wordnet was developed by Oingo, a small search engine company based in Santa Monica founded in 1998. Oingo changed its name to Applied Semantics in 2001, which was then bought by Google for $102 million in April 2003.

AdSense for feeds
In May 2005 , Google unveiled AdSense for feeds, a version of AdSense that runs on RSS and Atom feeds that have more than 100 active subscribers. According to the Official Google Blog, "advertisers have their ads placed in the most appropriate feed articles; publishers are paid for their original content; readers see relevant advertising — and in the long run, more quality feeds to choose from".

AdSense for feeds works by inserting images into a feed. When the image is displayed by the reader/ browser , Google writes the ad content into the image that it returns. The ad content is chosen based on the content of the feed surrounding the image. When the user clicks the image, he or she is redirected to the advertiser's site in the same way as regular AdSense ads.

AdSense for search
A companion to the regular AdSense program, AdSense for search lets website owners place Google search boxes on their pages. When a user searches the web or the site with the search box, Google shares any ad revenue it makes from those searches with the site owner. However the publisher is paid only if the ads on the page are clicked: Adsense does not pay publishers for mere searches.

XHTML Compatibility
The terms of the AdSense program forbid their affiliates from modifying the code, thus preventing these participants from having validated XHTML websites.

How AdSense works
In order to put ads on a web page , the webmaster inserts JavaScript code into the page.
Each time a page with an AdSense tag is visited, the JavaScript creates an iframe and sets its "src" attribute to the page's URL. For contextual advertisements , Google's servers use a cache of the page to determine a set of high-value keywords. If keywords have been cached already, ads are served for those keywords based on the AdWords bidding system. More details are described in the AdSense patent.

For site-targeted ads, the advertiser chooses the page(s) to display ads on and pays based on CPM (cost-per-thousand-impressions, or the price advertisers choose to pay for every thousand ads displayed).
For referrals, Google adds money to the advertiser's account when visitors either download the referred software or subscribe to the referred service.

Search ads are added to the list of results after a user preforms a search.
Since the JavaScript is sent to the web browser when the page is requested, it is possible for other site owners to copy the JavaScript into their own web pages. To protect against this type of fraud, AdSense customers can specify the pages on which ads should be shown. AdSense then ignores clicks from pages other than those specified.

Abuse
Some webmasters create sites tailored to lure searchers from Google and other engines onto their AdSense site to make money from clicks. These "zombie" sites often contain nothing but a large amount of interconnected, automated content (e.g.: A directory with content from the Open Directory Project , or scraper sites relying on RSS feeds for content). Possibly the most popular form of such "AdSense farms" are splogs ("spam blogs"), which are centered around known high-paying keywords. Many of these sites use content from other web sites, such as Wikipedia , to attract visitors. These and related approaches are considered to be search engine spam and can be reported to Google.

MFA (Made For AdSense) is a site or page with little or no content, but filled with advertisements so users have no choice but to click on ads. Such pages were tolerated in the past, but due to complaints Google now disables such accounts.

There have also been reports of Trojans engineered to produce fake Google ads that are formatted to look like legitimate ones. The Trojan Horse apparently downloads itself onto an unsuspecting computer through a web page and then replaces the original ads with its own set of malicious ads.

Criticism
Due to concerns about click-fraud , Google AdSense has been criticized by some search engine optimization firms as a large source of what Google calls " invalid clicks " in which one company clicks on a rival's search engine ads to drive up its costs.Some publishers that have been blocked by Google complain that little justification or transparency was provided. Webmasters who publish AdSense can receive a lifelong ban without justification. Google claims they cannot "disclose any specific details" on fraudulent clicks since it may reveal the nature of their proprietary click-fraud monitoring system.

To help prevent click-fraud, AdSense publishers can choose from a number of click-tracking programs. These programs will display detailed information about the visitors who click on the AdSense advertisements. Publishers can use this to determine if they have been a victim of click-fraud or not. There are a number of commercial tracking scripts available for purchase.

The payment terms for webmasters have also been criticized. Google withholds payment until an account reaches US$100, but many small content providers require a long time – years in many cases – to build up this much AdSense revenue . These pending payments are recorded on Google's balance sheet as "accrued revenue share". At the close of its 2006 fiscal year , the sum of all these small debts amounted to a little over $370 million, cash that Google is able to invest but which effectively belongs to webmasters. However, Google will pay all earned revenue, even if smaller than $100, when the AdSense account is closed.

Google recently came under fire when the official Google AdSense Blog showcased the French video site Imineo.com. This site clearly violates Google's AdSense Program Policies by displaying AdSense alongside explicit adult content. Typically, sites displaying AdSense have been banned from showing adult content.

In addition, Google has been criticized for claiming that they created, or had a bigger part in creating, AdSense than they really did. Most recently, Gokul Rajaram claiming he was the "godfather" of AdSense caused some controversy. Another Google employee who took credit for AdSense was Susan Wojcicki.


Source:
http://en.wikipedia.org/wiki/AdSense
http://ppcandadsense.blogspot.com/