PPC and sponsored listings

Types of paid placements

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Bid placements

Pay-per-click search engines like Overture use the bid placement system as a main source of revenue. The advertiser specifies the amount of money they're willing to spend on each keyword. How high their company is listed on the search results depends 100% upon how far away from the top bid they are. When a user clicks on the advertiser's link, their Overture account is debited for the amount of the bid.
Since bidding can be done online, instantaneously and as much as you want, there really is no limit to how high the top rankings may cost -- it's a buyer's market. In order to retain top positions, frequent monitoring is required.
There are several benefits to this approach. The main benefit is that advertisers control their placement, and thus, their visibility. Second, the whole process is immeasurably faster than trying to get a site indexed on a traditional search engine like Yahoo!
On the downside, bid placement can be incredibly costly if you don't monitor it. For example, some companies can pay $2-4 or more per click for top bids on their keywords, something you should never do. Bid placement monitoring can be done manually or by software, but in either case, this is a hidden expense. Finally, many people don't consider that some searchers avoid paid-for placement sites altogether because results are not based upon relevancy, but upon bidding, and therefore might have less bearing on the mission of the search in the first place.

Paid for sponsor listings

Paid-for sponsor listings are different than bid placements in that they are more like purchased advertisements. Examples are Yahoo!'s "Sponsored Sites" and Google's "Adwords" and "Premium Sponsored Listings." These are text-based advertisements that look like search engine listings and which are given guaranteed prominence with respect to search engine query results. Positioning is usually at the top or right-hand side of the page.
Though Yahoo! and Google differ in some ways, the overall pros and cons to them are similar. PROS: Both offer high visibility, targeted listings, and quick turn around time once the order is placed. Pricing is also more stable than with bid placements. CONS: Yahoo! only allows paid-for listings of sites already indexed in their directory, and it still serves targeted keyword banner ads on the same page. Google, doesn't have banners to distract from their paid-for sponsor listings, but it does severely limit the content of the ad, and only offers rates by the CPM. Moreover, if more than 3 advertisers want to purchase each type of ad space, Google will only display the top 3 based upon the amount they paid and their click-thru rate.

Non paid placement

If you choose not to pay for placements on search engines, your alternative is to OPTIMIZE your site so the engines index it and rank it highly anyway. Search Engine Optimization (SEO) is more like an art form instead of rocket science. This is a topic we are going to save for later in an advanced course.
I guess you could look at it that at least advertisers have options. Decisions as to which method to pursue should be determined by the particular goals, budget, and time constraints required.


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