CPL Advertising Model- Get Cash Fast

Do advertisers believe CPC advertising?

Well CPC pricing model is not up to date to the current economic scenario. CPC pricing model got more strength during earlier recession (2000-2002). Advertiser thought of why to pay just for showing ads on websites and search engines. They opt for the option where their ads get clicked and they pay as low as minimum for the click. That time online advertising declined by 27 percent, CPC advertising grew by a staggering 820 percent. That shift has seen because the pricing model was changing from one form to another.

I think the cost per click is going to be disliked by the advertisers now. Advertisers finding more and more options where they pay only for targeted leads they are getting. There are various reasons where advertisers dislike CPC advertising model. I will discuss them one by one.

1. Competition in paid keywords: - Now the online domain is abundant. All type of advertisers is now online which include B to B and B to C advertisers. I think that the competition is direct and indirect so, the search engines are now getting costlier and in present economic scenario advertisers don’t want to pay high just for clicks on their ads. According to a recent survey by DoubleClick in 2007 the cost-per-keyword increased by 33 percent and the cost-per-click rose by as much as 55 percent. We at omcareers think that this increase recorded because the competition increased between advertisers and they are bidding more and more on paid listings in search engines like Google, Yahoo and MSN etc.

2. Not getting targeted clicks: - At the end of 2002, advertiser believes that the CPC model will work well as ads get clicked by genuine users and hence they will get more leads. But in 2008, according to Click Forensics shows a 16 percent industry click fraud rate. The same report claim that the click fraud on search engine content network like Google adSense and Yahoo Publisher Network have increased by 27.1% this year. Its true search engines use sophisticated technologies to check the click fraud and pay back to advertisers for click frauds. But in some case this is not that so easy and advertisers tired of paying for fraud clicks. They assumed of targeted clicks but they ended up paying for fraud clicks.

3. Paid search algorithms are not clear: - Search engines use a certain algorithms to decide the position on paid listing and CPC. Google, yahoo and ASK have their own algorithms to decide the position and CPC to pay by marketer.

The problem with these search engines is that the algorithms is not clear and its very difficult for a marketer to find our relation between quality score, landing page, keywords and ad copy.

One more thing which is very confusing for an advertiser is the source of click. Mainly in content network is hard to find exactly where the click coming from, however CRM tools help in this.

This type of lack in clarity leads to frustration and advertisers will opt out of this CPC pricing model.

To prevent this gap between advertisers need and the offering of search engines I think there is a requirement of check the loop holes of CPC advertising and encompass the news advertising model.

· Shift to CPL from CPC: - The last recession brings a new advertising model, CPC in front of advertisers. Its time to move on and to change the CPC pricing model to CPA pricing model. The move towards CPL advertising will give relief advertisers to pay for expensive keywords and fraud clicks. According to Daniel Taylor, senior analyst in Yankee Group’s Consumer Research groups “The industry is moving towards CPL advertising. CPC pricing model is a placeholder for CPL. Advertisers only want to pay for very specific consumer interactions, and not for wasted clicks or impressions”

· Business will be transparent: - The changed pricing model from CPC to CPL will definitely give a great visibility, transparency and satisfaction to the advertisers. Well now advertiser will now pay only for the relevant business (lead) he will get from search listings. This will develop a positive relationship between advertisers and advertising platform.

· Time to invest on CRM: - As now the more emphasis is on the lead and there is a need of deep level tracking of lead. The CRM tools will now be in demand. Marketers will now focus to a greater extent on the campaign backend to ensure that their marketing campaigns convert into tangible returns and revenue. According to Datamonitor, the CRM industry is forecast to reach $6.6 billon by year-end 2012, growing at a compound annual growth rate of 10.5 percent. This is because now more and more advertisers are demanding and focusing on lead and their tracking and measurability.

This entry was posted on Thursday, April 2nd, 2009 at 1:43 am and is filed under PPC. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.