July 11, 2009 – (HOSTSEARCH.COM) – Will PPC become an obsolete model? CEO Clarence Briggs of search engine tyBit.com (www.tyBit.com) seems to think so. “We’re cranking out 60 to 70 million searches a month through thousands of distributed partners and affiliates, and we are giving away PPC advertising,” said Briggs. “Our model is simple and affordable. We give away PPC ads, but our preferred advertisers bid in a pay-per-position or PPP auction. They bid on positions 1 through 10 and pay a flat, daily rate starting at only $1 a day for a key term, regardless of the number of impressions or clicks,” said Briggs. “In the first week, we have had over 400 advertisers sign up for PPP based on our Global Keyword Registration (GKR) system,” said Briggs.
With the news last month that PPC clickers aren't the valuable customers that advertisers might have expected, will we see a major change in the revenue models of search engines? According to a recent Kiss-SEO report about PPC click-through rates, 6% of ad clickers are responsible for 50% of display ad clicks. These clickers, tagged as "Natural Born Clickers" further erode the validity of pay-per-click models because of their demographics.
These clickers tend to be younger, in the 25-44 age bracket, and have lower incomes, less than $40,000. What that means, is that many companies that measure the success of their ad campaigns by the number of click-throughs, are possibly getting site visitors not able to purchase the products or services advertised. The study went on to imply that the success of an ad campaign, therefore shouldn't be measured by clicks, but rather than by exposure. If that inference sticks, we might see search engines revert to the old CPM model or some new paradigm?
According to tyBit.com, over 400 PPP advertisers signed up the first week the new search engine rolled out its new interactive advertising model. “They gave me a promo code for a 48 hour try-buy,” said Randy Roman (www.jaxdirect.com) of Jacksonville, Florida. “I was stunned by the results that I could see not only on the tyBit.com ad management control panel, but my own analytics which confirmed that tyBit.com had delivered unique and qualified traffic. The tyBit PPP tools and report detail makes this affordable, predictable, transparent and incredibly effective.”
Another aspect of the PPP model begs the question “Is there still a place for expert Search Engine Management (SEM)?” “I think there is a role for SEMs but that role will change,” said Michael Roberts, CIO of tyBit.com. “Right now there is a secret sauce associated with PPC campaign management and many large companies outsource without understanding what they are paying for,” said Roberts. “If you think about it, there is a conflict-of-interest because most SEMs are paid a percentage of what their client advertisers spend, instead of what they save and measurable results. With PPP, the results are very measurable because we display every IP address, user agent information and other log file data right to the advertiser.”
According to a recent report in Media Post, Google has begun soliciting advertisers to participate in an “experiment” that puts information, such as size and price, about products in search results. The ads will be served to a select group of people searching the Web in the United States at first. The ads are not billed by the click, similar to the traditional pay-per-click (PPC) model, but rather when the person purchases the item or “performance based,” meaning that Google would only get paid when someone made a purchase through the ad. The report further states that although a Google spokesperson confirmed the “test,” he declined to provide details on the product listings because it has not gone live. “You now see PPC based search engines allowing the display of telephone numbers in the ads,” said Kitti Jo Finch, GM of tyBit. “This was absolutely not the case years ago because if a potential consumer called instead of clicked, a search engine lost money, unless they received a revenue share a toll free number.”
The downside to advertisers in this model could result in high commission rates, causing cash-strapped advertisers to spend even more than on traditional PPC if they sell products. “I’ve long thought pay per click’s days was numbered,” said Jeff Brahm of Rent Cell (www.rentcell.com). “It’s just too hard to control click fraud, and BOT clicks which together run as high as 70% of total clicks. I stopped paying for this and switched to tyBit’s PPP.” Company CMO Sean McCoy thinks there may be a place for both PPC and PPP to co-exist but cost-per-action is doubtful. “Someone might be willing to pay .10 cents a click, or $1 dollar per day, but I doubt that they will give up 20% of their sale, especially if that 20% is dynamic and subject to an auction-style platform.”
Briggs believes the tyBit PPP model will make interactive advertising a mainstream phenomena like the automobile, personal PC and cellular phone. “If we can create value for subscribers, partners, and advertisers in a cost-effective manner using a virtual conveyor belt and assembly line, we will take the secret out of secret sauce and achieve mass market penetration,” said Briggs. “Publishers and Affiliate Resellers get their share of online advertising dollars,” said Briggs. “Subscribers want accelerated search, better relevancy, personalized results and privacy. Advertisers want fairness, customization, accountability, and transparency. “tyBit delivers,” said Briggs.
