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History of Pay Per Click

Pay-per-click marketing is so extremely beneficial to businesses because it allows companies to market to consumers targeting the specific keywords their products/services relate to. Pay-per-click marketing is one of the main reasons consumers get search engine services from Google and Bing for free, since these advertising sales generate tons of revenue. Here's a little information about the history of Pay Per Click, how pay-per-click came to be the online marketing powerhouse it is today.

Prior to pay-per-click services, search engines like Yahoo! (who dominated the mid-late 1990s search market) charged businesses a fee to be indexed by them. This was common practice for search engines to keep money coming in, since they don't really act as a traditional company that sells products/services of their own, but rather directed people to where they made purchases. And let's face it; consumers were going to abandon any search engine that cost money to use.

In 1996, the first known and documented version of a PPC was included in a web directory called Planet Oasis. This was a desktop application featuring links to informational and commercial web sites, and it was developed by Ark Interface II, a division of Packard Bell NEC Computers. The initial reactions from commercial companies to Ark Interface II's "pay-per-visit" model were skeptical, however. By the end of 1997, over 400 major brands were paying between $.005 to $.25 per click plus a placement fee.



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In the history of Pay Per Click, the first PPC company was Goto.com, which created what is now considered the accepted norm across search engines. In February 1998 Jeffrey Brewer of Goto.com, a 25-employee startup company (later Overture, now part of Yahoo!), presented a pay per click search engine proof-of-concept to the TED conference in California. This presentation and the events that followed created the PPC advertising system. Credit for the concept of the PPC model is generally given to Idealab and Goto.com founder Bill Gross.

This new moneymaking machine for search engines was officially coined "PPC marketing," and pay-per-click optimization services from digital marketing agencies began to offer businesses PPC campaign management to ensure success in search engine adverting. Businesses quickly learned that having the right PPC strategy in place made the difference between wasted dollars and huge growths in revenue. PPC is often a fast alternative to organic search engine optimization (SEO) and can put a site on the map in a hurry when properly utilized.

Google started search engine advertising in December 1999. It was not until October 2000 that the AdWords system was introduced, allowing advertisers to create text ads for placement on the Google search engine. However the history of Pay Per Click tells that, PPC was only introduced in 2002; until then, advertisements were charged at cost-per-thousand impressions. Overture has filed a patent infringement lawsuit against Google, saying the rival search service overstepped its bounds with its ad-placement tools.

Although GoTo.com started PPC in 1998, Yahoo! did not start syndicating GoTo.com (later Overture) advertisers until November 2001. Prior to this, Yahoo's primary source of SERPS advertising included contextual IAB advertising units (mainly 468x60 display ads). When the syndication contract with Yahoo! was up for renewal in July 2003, Yahoo! announced intent to acquire Overture for $1.63 billion. AdCenter is currently a similar service offered through Bing (formerly Windows Live and MSN).


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