Paid search has been a booming business since it was invented by Goto.com (now the Overture division of Yahoo!) back in 1997. It started simply enough. Pay the high bid and get a #1 ranking for whatever folks are searching for. When people click on your ad, you pay a few cents and then you hope to sell them something to make a profit.

My roots are in organic search, so I (foolishly) scoffed at the notion that people would fall for this “scam.” “Why should people click on the highest bidder when they could click on the most relevant result?” I asked, in my oh-so-naive way. And, to be fair, they did not come to Goto.com to click on paid results. But Goto was smarter than me (as so many are)—they syndicated their results to organic search engines. They were shown above the organic results, to the side of the organic results—I think they’d show them inside the organic results if they could figure out how. And then came the contextual advertising, shown on pages that contain related articles, just like magazine ads, which provided even more exposures.

And click we did, much to my chagrin. I hate to admit it, but I clicked on them, too. Paid search was no scam if it delivered relevant results to me. Google, never one to shy from innovation, introduced its own paid search approach that combined clickthrough rate with bidding to improve relevance even more.

Paid search took off in a huge way. The paid search market hit $2.9 billion dollars in 2004 and is expected to nearly double to $5.5 billion dollars by 2009, according to Jupiter Research. And paid search, to be fair, is the main thing that pays for my beloved organic search—95% of Google’s revenue, for example, according to page six of their filing with the Securities and Exchange Commission. Without paid search, Google would have next-to-no income, and Yahoo! would not be doing a whole lot better.

Don’t overlook the keys to paid search marketing:

  • Get to know the types of paid search marketing. Paid placement, shopping search, and directories can all be important to your campaigns. Learn about each one and decide which ones are for you.
  • Look for value in paid placement keywords. As paid placement rises in popularity, per-click prices go up, too. How do you find the bargains?
  • Beware of click fraud. Someone out there is trying to cheat you out of your per-click fees. Find out how and what you can do about it.

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