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The underlying principle of the online business is no different than that of the traditional brick and mortar establishment. To be successful it needs to get a product or service into the hands of the consumer. To accomplish this, the online business needs to establish and maintain a presence on the web.

Today, many businesses have turned to Pay-Per-Click (PPC) marketing. The basics of PPC are straightforward. Advertisers bid against one another in an auction format to position text advertisements that are displayed on search engine result pages. These ads are placed in an area separate from the natural search results. When PPC advertisements are clicked on, the advertiser will pay the fee associated with their bid.

For many, PPC provides an alternative to other traditional forms of search engine marketing.

The Underlying Issues of PPC

On the surface PPC seems like the ideal marketing strategy with the ability to decide who you market to, and how much you are willing to spend. This control has made PPC a very advantageous form of marketing, producing great expansion opportunities and rewards for PPC distributors. But what about the advertisers that drive these PPC systems? What impact does this expansion have on them?

Diminishing PPC Returns

In tough economic times, online advertising needs to be highly relevant and cost-effective. As PPC search engines such as Overture continue to expand their networks to remain ahead of their competition, PPC becomes more about expanding the network market share and less about the advertisers gaining targeted traffic.

Where are Your Ads Being Displayed

Overture boasts +ó??tens of thousands+ó?? of affiliates. But who are these affiliates and how effective are they at bringing targeted traffic to your site? If you are interested in knowing the +ó??tens of thousands of Web sites+ó?? that are displaying your advertisements, check out the Pakistani chat room sites or those annoying pop-ups that are always showing up on your screen. In a feverish attempt to expand its network as quickly as possible, Overture has seemingly turned a deaf ear to the old adage +ó??quality over quantity+ó??.

As an advertiser, quantity is usually a good thing. The more people you can expose to your product or service the better, right? But what happens when the audience is not interested? What happens when the market for a product or service is not applicable?

If you were selling premium meat products, you probably would not direct your advertising efforts toward vegetarian organizations. Your product is being exposed to a large number of people, but if there is no interest in the product, you are wasting your efforts and money. It appears that Overture has forgotten this.


Where to Find Your Ads

First of all, let me preface this following list by saying that Overture does supply results on reputable sites such as Yahoo and MSN, but the list of reputable sites that supply results are far and few between when compared with the total number of Overture affiliates.

If you+ó??ve seen one, you+ó??ve seen them all. Below is a small sample of Overture+ó??s network. The varying names and occasional shuffling of placement on the homepage does not help these sites establish any characteristic that could be considered their own.

http://www.dogstop50.com/
http://www.bluefishonline.com/
http://www.coeliac.com/
http://www.waterwiseonline.com/
http://www.ringrunner.com/
http://www.4devs.com/
http://www.gamekrazy.com/
http://www.joaodedeus.net/
http://www.psychocorp.net/
http://www.portugal-travel.net/
http://www.search-engine-ranking.org/
http://www.dodaddy.com

Although this next list of Overture affiliates does not bear the same +ó??striking+ó?? resemblance as the above, they are still the same fox in different clothes.

http://search2.top10sites.com/
http://www.100hot.com/
http://www.metaiq.com
http://www.megaspider.com
http://www.bonzi.com
http://www.igetnet.com
http://www.linkster.com/
http://www.presence.com/
http://www.411web.com/
http://www.theuseful.com/
http://www.lawyer.com

This is only a small sample of sites that either feature or are solely dedicated to displaying Overture PPC ads. However, web sites are not the only place you might find your Overture ads.


Pop-up Products – The Pushy Salesmen

They clutter your screen, proclaiming that you+ó??re a +ó??winner+ó??, and promise fantastic gifts and offers just for clicking on the flashing box. They are the +ó??pushy salesmen+ó?? of the Internet, known as pop-ups and pop-unders. It seems like these annoying advertisements are showing up everywhere. Where do they come from and what type of business would want to subject their potential clients to this rudimentary and insulting form of marketing?

Overture, in their quest to expand their search results distribution and profit margin, has gone beyond searching for Web sites to display their results and resorted to forcing their paid listings on Internet users.

Overture recently signed a three-year deal with the controversial and often-despised adware company +ó??Gator+ó?? to provide paid listings on its Search Scout service. Search Scout works by creating a pop-up window when search engine visitors perform a search. The goal of this annoyance is to force Overture+ó??s paid listing results onto users, visiting sites that do not carry Overture results. For example, if someone were searching for +ó??painting supplies+ó?? on Google, Search Scout would produce a pop-up that displayed Overture+ó??s paid listings for that term. What impact does this have on your bottom line? You may never know.


Overture Content Match

This program was designed to be a source for generating targeted leads by displaying Overture listings to Internet users searching for and viewing related content on the pages of Overture partners.
Is Overture Content Match driving visitors or customers to your site? Let+ó??s look at the example Overture provides on their site to promote this product, +ó??if you have listings for the search term “Norah Jones”, your listing might appear on an entertainment page about her.+ó?? Well, this sounds great, if you happen to be selling Norah Jones CD+ó??s right? If someone is searching for +ó??Norah Jones+ó?? and they go to an entertainment page about her they will see your listing. However, the real problem does not lie in the relevancy of the site you are listed on, it lies in the likelihood that this site will produce a conversion. If a perfectly targeted advertisement attracts a click-through but does not result in a conversion, what good does this click-through do for you? In the most basic terms, in an attempt to increase click-throughs of any kind, Overture has ignored the fact that those with a +ó??search mode+ó?? mindset are more likely to buy than those with a +ó??surf mode+ó?? mindset.
Conversely, by placing your advertisement on this new array of related pages, Overture is able to generate more clicks and hence, more money.


Taking Your Control Away

Your business has just paid a million dollars for an extensive TV advertising campaign with a well-known network. They have agreed to run your ad twice a day for the next month during a show that closely relates to your product. Half way through the month, you tune in to see when your ad is being run only to find that your ad is no longer being run. You call the network to complain only to hear that their side of the agreement has been filled. They explain that instead of running your ad twice a day on their major network during the related show, they ran your ad twice on thirty of their affiliates on the first day of the month, hence fulfilling their end of the agreement. No business would stand for this, right? Wrong. Every month thousands of online advertisers are forced to deal with this situation.

Many businesses turned to PPC because it provided the unique opportunity to control the amount you spend and who you market to. Imagine if that control was taken away. Unfortunately, that is what many PPC engines are doing. As the Overture site states, +ó??Overture’s affiliate partners number in the tens of thousands of Web sites+ó??. Although this may sound impressive, what does this actually mean to advertisers? Can there really be +ó??tens of thousands of Web sites+ó?? where your ads appear and produce relevant click-throughs?

Pay-Per-Click Fraud

Does anyone really know who+ó??s clicking who? How much are you willing to pay to have your top online competitor look at your site? PPC fraud occurs when an advertiser receives invalid clicks on their paid listings by individuals who have no intention of purchasing.

If one of your competitors were to visit your site just once a day, every day, for the keywords you are bidding on, you could end up paying hundreds of dollars for nothing. What+ó??s worse, with the large number of affiliates most PPC distributors have, they are making it even easier for click fraud to occur. By displaying your PPC ads on +ó??tens of thousands+ó?? of sites, PPC distributors have created a network where tracking click-throughs is next to impossible.

If the goal of Pay-Per-Click search engines is to bring lucrative, targeted traffic to your site, what are these PPC search engines doing to prevent abuse that needlessly drive up your costs and reduce your ROI? Unfortunately, as many companies have found, little or nothing. The horror stories of PPC fraud are almost as prevalent on the Web as the stories touting the great advances PPC companies have made in preventing PPC fraud (I+ó??ll let you speculate for yourself which articles the advertisers are writing and which ones PPC distributors are promoting).

Despite the ominous stories of uncontrolled click fraud and abuse, many companies do not consider the possibility of PPC fraud until it happens to them. Unfortunately, as many businesses can attest to, this can be a very costly oversight.


Increased Competition

As more and more online businesses turn to PPC marketing, the actuality of market saturation becomes a distinct and looming probability. With this increased competition, advertisers are being forced to spend more and more money to remain competitive on the PPC engines.

Now instead of competing with 2 or 3 companies and paying .30 or .40 cents for a competitive listing, advertisers are competing with 20 or 30 companies and paying 3.00 or 4.00 for a competitive listing. For many companies, this increased competition, cost and consequential diminishing returns have forced them to look to other advertising opportunities to remain competitive in the online market.


Reducing Your ROI

Pay-Per-Click fraud, pop-ups, increased competition, what does all this mean? As PPC engines scratch and claw, jockeying for position, something is lost. It+ó??s not integrity; for PPC engines that went out of style faster than the Macarena. What has been lost is the once prevalent ROI for the advertisers.


If Overture Jumped off a Bridge Would You?

If there is one thing the flawed logic of my youth taught me, it is that you can never argue with +ó??If so-and-so jumped off a bridge would you?+ó?? This is the one parenting defense no kid can outwit, or overcome. It is perfect in its ability to show how following the crowd is not always the best thing to do. Unfortunately, this childhood lesson has been ignored in the world of PPC advertising. When asked, +ó??If Overture jumped off a bridge would you?+ó?? Most PPC distributors said, +ó??Yes+ó?? with authority and conviction. AhHa, Sprinks, FindWhat, Kandoodle and a host of other PPC distributors have thrown their hats into this race for PPC affiliate domination. In addition, other sites such as Business.com and CNet.com are also making a splash in the PPC marketing pool.

As PPC distributors continue to jockey for position and revenue, the PPC industry continues to barrel forward like a runaway train. No one is quite sure where it+ó??s going, but when it gets there, there is going to be a big mess. What will the future of PPC hold? It all depends. As Overture states in their annual report issued February 28 2003, +ó??We are completely dependent on online advertising and consumer search services. The failure of the Internet to continue to develop as a commercial and business medium would have a material adverse effect on our business, operating results and financial condition.+ó?? If advertisers continue to allow distributors to dictate to them and take advantage of them, they will. At what point do the advertisers say enough is enough? How many advertisers need to fall victim to PPC fraud or find their advertisements littering the Internet as pop-ups and pop-unders before something is done?