Finkernet Marketing

Table of Contents

This chapter is part of the free e-book 'Basics of Search Engine Marketing', published in May 2005.

3 Introduction to Search Engine Marketing

As more and more people have turned to search engines for information, the commercial aspect of search engines has started to evolve. Companies have become increasingly conscious about the opportunities that search engines provide, and have begun spending money to appear at the top of the search engines. Initially, this money was spent solely on optimizing websites for organic rankings on the search engines.

However, optimization did not provide direct financial benefit for the search engines. They were not monetizing their millions of visitors, yet they realized that companies were willing to advertise on the search results. A company called Overture (formerly GoTo) provided the best solution for the search engines. Overture’s pay per click -model, which is based on bid prices and clicks has become the main source of revenue for search engines. This pay per click -model, also known as PPC, has made the leading search engines into multibillion-dollar businesses.

Before the pay per click advertising -model caught up, there was another model that is still used in many media buys: CPM. CPM (Cost per Thousand) is a model where the advertiser pays a fixed price for one thousand impressions of an advert. Most search engines do not use the CPM-model anymore, but most banner and rich media advertisements on content sites are still based on the CPM-model.

At the moment, search engine marketing (SEM) consists of three primary elements: pay per click, search engine optimization, and pay for inclusion. Optimally, at least two out of the three of these elements should be part of the search engine marketing campaign, with emphasis on the most cost-effective element.

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