In Chapter 15, we are introduced to the concept of pay-per-click. Pay-per-click is an advertising model used by advertisers to direct traffic on ads. In this model, advertisers pay a publisher for each ad clicked. The goal for using this model is to increase awareness for an advertisement. Because of this advertisers are willing to pay high prices for pay-per-click ads. For instance, in the book Networks, Crowds, and Markets, it states that for subjects like “loan consolidation” and “mortgage refinancing” the pay-per-click rate can often reach $50 or more.
The article, How different demographics ‘really feel about ads, elaborates on the proper uses of this model. According to eZanga, a digital marketing firm specialized in pay-per-click states that 75% of these ads are clicked unintentionally. To solve this problem Michelle Brammer, director of marketing at eZanga.com advises marketers to be more aware of user experience. According to Brammer, due to the evolution of ad formats it is extremely important for companies to know their audience and give them what they want to see. Demographics can help narrow down possible ways to attract these markets.
Secondly, Brammer recommends advertisers to carefully review the placement of their ads. In class, we learned that the auction procedure is used to determine the price for ad placement. In a basic set-up for a search engine auction, there are a certain number of advertising slots to be sold to a population of potential advertisers. Each slot holds a click through rate, which higher slots generally get higher click through rate.