the U.S. and Canada in 2005, and by all expectations this number will grow in the
coming years. MSN is poised to jump into the fray with MSN adCenter.
Here are two elements of paid placement that you may encounter:
• Pay-per-click advertising
• Paid inclusion
As you learned in Chapter 3, pay-per-click (PPC) is generally an auction-based system,
with advertisers jockeying for their listings’ positions based on bid price. See Figure 4.1
for an example. Until recently, the PPC auction was a fairly straightforward system in
which a higher bid resulted in a higher rank. Now, Google and YSM are both gravitat-
ing toward a more complex method for determining PPC ranks. In Google AdWords,
for example, the PPC algorithm is called a Quality Index, and it awards position based
on several factors, including click-through rate, cost, and relevance of the ad text.
So if you were looking to PPC as a way to skirt around the Eternally Hidden
Algorithm, we’re sorry to say there’s one to puzzle over in PPC as well. For starters,
noted pay-per-click expert Kevin Lee indicated to us that PPC algorithms today are
likely to favor big brands and compelling, relevant ad text because those ads would
receive higher predicted click-through rates. The winds of change are blowing espe-
cially hard in the world of PPC, so do your best to stay in the know.
Pay-per-click advertising on Yahoo!
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