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What is
'Pay for Performance'
a/k/a cost-per-click
Internet Marketing?

Simply put, pay for performance Internet marketing is when an advertiser pays only for the actual responses from customers. Most of the time these visitors have been pre-qualified by searching for a term specifically selected by the advertiser.

Recently, at the Interactive Newspaper Conference in San Jose, Martin Nisenholtz - head of New York Times digital division - had something very interesting to say:

"Branding on our site is worth zero, branding on any web site
in a banner or listing format is worth nothing"

The old ad men quietly shook in their collective boots - this is a revolutionary idea in advertising... Branding that is worth nothing? What about the value of people seeing and remembering your name? Maybe in print, but not on the Internet. If you think about it for a minute, the validity of this statement is obvious. You may have clicked on a banner or two while surfing the web in the last few months but when was the last time you remembered one and associated the product or service later on? People hum the jingles from TV commercials but have exceptionally effective blinders to Internet advertising noise; they have trained themselves to block it out.

In the days of the dot com boom companies were forking over ridiculous sums for Internet advertising, paying CPM of $100 on banners only 18 months ago (current CPM is $1-$4) - and none of it paid off.

This is how cost-per-click advertising was born…as properties were quickly losing their advertising clients they started to offer pure pay for performance models - essentially working on commission - and the floodgates have opened.

Today there are more than 500 pay-per-click search engines and it is likely all Internet advertising vehicles will offer a pay for performance model within the forseeable future.

Imagine...You are IN THE TOP THREE in some of the top search engines - and it doesn't cost you one red cent.

...AND the search terms are highly specific and the descriptions accurate - thus you get clicks that more easily convert to sales.

... The ONLY time you pay is when someone actually clicks on that listing and goes to your site.

Where can you buy it?

The biggest pay for performance Internet advertising vehicle is Yahoo Search Marketing (formerly Overture). They have achieved this position by creating a vast network of partner sites.

There are hundreds of advertising vehicles using similar or slightly altered models of this idea - some of which have some interesting technology of their own.

Findwhat.com has a simple plain English query tool that allows clients to enter up to 1,000 keywords and determine their relevancy and pricing.

7Search.com has licensed their technology to many other search engines; it's called Keyword Funneling.TM This technology allows bids to literally be funneled into larger more active keywords maximizing exposure.

The others in the top ten pay-per-click engine category are: Bay9, GoClick, Kanoodle, ePilot, SearchGalore, Espotting, and Search123. Each has particular advantages and market penetrations - all have partnered with more visible properties to increase the value of their placements.

Existing Tools

Each engine has a wide array of different tools to utilize their products. Most offer automatic bid increases, management reports, automatic replenishment, keyword suggestion tools, mass submission, fill down tools, and they are always adding new features.

Some of these tools are simplified for the average user and are not so powerful, but most are now becoming feature rich and therefore complicated.

What's the problem with CPC?

The simplest answer to what is wrong with the current pay for performance solutions is found in the way Yahoo Search Marketing wants to sell it to you on the first purchase. They call the three products:

Full Serve Advantage ($199 fee)
Full Serve ($99 fee)
Self Serve (no fee)

They've done a wonderful job of recognizing the problem - most businesspeople do not have the time or the energy to work on creating listings themselves so Yahoo Search Marketing will do it for a fee…but they have missed the greater issue, which is listing management.

Listing management involves keeping track of current bids, maintaining appropriate positions while staying within the budget, adjusting keywords as inventory changes, and checking your click throughs against site statistics for verification.

Appropriate management requires logging into the systems every day to see what activity has occurred and making adjustments as necessary. Listing management is the bulk of the work in any pay for performance campaign.

Some companies have gone so far as to create tools to use the tools - the most popular of these is WordTracker. This is essentially a database tool that allows you to keep track of all your different campaigns in a single place…a very nice system but it still seems to miss the basic point that businesspeople are not interested in spending hours each week working on their pay for performance campaigns.

What do we offer that other solutions don't?

Let's assume you wanted to sell a product nationally with a print advertisement. It is very unlikely you'd call all 37 major metro newspapers and place your ad with each one. Most people would call an advertising agency and allow them to make the placement for you. Through using their industry expertise and buying power, an agency is able to provide you with the same placement for the same amount you'd pay (or less) and make a few dollars for themselves.

Advertising agencies are how most ads are placed- it's always been the traditional model for placing national ads as it is understandable and it works. Internet ads are national ads.

Bearpaws WebWorks is like those ad agencies: We arrange and administer pay for performance marketing on the web.

We manage every aspect of your campaign, including the day-to-day grunt work, and by leveraging our purchasing power we guarantee locked click through prices for your service or product.

By offering a truly full service solution, Bearpaws WebWorks allows the client to simply make decisions about budget, target market, and duration of the campaign - just like they would with a traditional advertising agency.

How much does it Cost?

The price of these services is included in the guaranteed locked cost per click of any campaign. Specific quotes for any campaign are available; this service requires a minimum commitment of $2000.

The cost for any campaign is between fifty cents and a dollar fifty per click. Each campaign is individually negotiated and the prices are guaranteed for the term of the agreement.

While competitive with premium direct purchase pricing, we include all of the service that most busy businesspeople really need.

Let's take a look at Return on Investment (ROI) for Online Advertising Methods

Jupiter Media Metrix: Online Advertising Effectiveness Study

As you can see, pay for placement search offers the highest ROI of any online advertising - and the reason is really quite simple.

Pay for performance searching pre-qualifies every single visitor to your site. People who are at a topic site (like cape cod) may be looking for a place to sleep, but people who have typed the words: "place to sleep on cape cod" into a search engine are ready to make a purchase.

Simply Put:
Would you rather have 10,000 ad views that result in ten sales or 500 ad views that result in fifty sales?

Sales equal return on investment... and in a world of 'no branding', sales are all that really counts. The specialized nature of multiple keyword searches can result in conversion rates that approach the astounding!

BearPaws WebWorks offers premium marketing at an affordable price while offering a fully managed solution. This is the future of Internet marketing and it is available today.