Pay per Click Advertising - DOC

							Lesson 2: Classified advertising, SERP, major classified websites,
eBay, Pay Per Click.
“Business English for the Internet”

Walter Giordano - "Business English Professor" - "Facoltà di Economia -
Federico II"

READ THE FOLLOWING TEXTS. WRITE A COMPOSITION EXPRESSING
THE IMPORTANCE OF E-COMMERCE NOWADAYS.

- WRITE A PROFILE OF ZAPPOS, FINDING OUT DATA (FROM SITES LIKE
BUSINESSWEEK, FT, ETC)

Classified advertising is a form of advertising, which is particularly common in
newspapers and periodicals, online and on paper. It differs from standard advertising
or business models in that it allows private individuals (not simply companies or
corporate entities) to solicit sales for products and services. Classified advertising is
usually text-only and can consist of as little as the type of item being sold and a
telephone number to call for more information. It can also have much more detail,
such as name to contact, address to contact or visit, a detailed description of the
product or products ("red 1996 Pontiac Grand Prix" as opposed to "car"). There are
generally graphics within the advertisement, although sometimes a picture or a logo
may be used.
Classified advertising is called such because it is generally grouped within the
publication under headings classifying the product or service being offered (such as
Cars, Clothing, For Sale, For Rent, etc.) and is grouped entirely in a distinct section of
a periodical, which makes it distinct from display advertising, which often contains
more graphics and which is more typically distributed throughout a publication
adjacent to editorial content. A hybrid of the two forms — classified display
advertising — may often be found, too. Business opportunities often use classifieds to
sell their services, usually employing 1-800 numbers (toll free). Classified ads are also
among the tools used by many companies in recruitment for available job
opportunities.
Classified ads are typically just a few column lines in length and are often filled with
abbreviations to save space and money, in case the user is paying to insert an ad on a
website or newspaper; mostly, though, Internet classified ads do not use per-line
pricing models, so they tend to be longer. They are also more readily searchable, tend
to be local, and may foster a sense of urgency as a result of their daily structure and
wider scope for audiences. Because of low cost structures, some companies offer free
classifieds internationally, such as Craigslist and Kijiji. Other companies focus mainly
on their local hometown region, while others cover urban areas by using zip codes.
Additionally, other companies provide online advertising services and tools to assist
members in designing online ads using professional ad templates and then
automatically distributing the finished ads to the various online ad directories as part
of their service.
In 2003, the market for classified ads in the United States was $15.9 billion
(newspapers), $14.1 billion (online) according to market researcher Classified
Intelligence. Newspapers have continued their downward trend in classifieds revenue
as internet classifieds grow. Classified advertising at some of the larger newspaper
chains has dropped 14% in 2007 while traffic to classified sites has grown 23%.
As the online classified advertising sector develops, there is an increasing emphasis
toward specialization. Vertical markets for classifieds are developing quickly along
with the general marketplace for classifieds websites. Like search engines, classified
websites are often vertical in nature with sites providing advertising platforms for
niche markets of buyers or sellers.

SERP – Search Engine Results Page
A search engine results page, or SERP, is the listing of web pages returned by a
search engine in response to a keyword query. The results normally include a list of
web pages with titles, a link to the page, and a short description showing where the
keywords have matched content within the page. A SERP may refer to a single page
of links returned, or to the set of all links returned for a search query.
An issue that can affect search engine results in a negative way can be ―Query
caching‖; in fact, some search engines cache SERPs for frequent searches and display
the cached SERP instead of a live SERP to increase the performance of the search
engine. The search engine updates the SERPs periodically to account for new pages,
and possibly to modify the rankings of pages in the SERP.
SERP refreshing can take several days or weeks which can occasionally cause results
to be inaccurate or out of date, and new sites and pages to be completely absent.

Different types of results
SERPs of major search engines like Google, Yahoo and Live may include different
types of listings: contextual, algorithmic or organic search listings, as well as
sponsored listings, images, maps, definitions, videos or suggested search refinements.
The major search engines also offer search for specific content, such as image, news,
and blog search. The SERPs for these specialized searches offer specific types of
results.

Advertising (Sponsored Listings)

SERPs usually contain advertisements. This is how commercial search engines fund
their operations. Common examples of these advertisements are displayed on the right
hand side of the page as small classified style ads or directly above the main organic
search results on the left.

How SERP entries are generated
Major search engines like Google, Yahoo and Live Search primarily use content
contained within the Metadata tags of a web page to generate the content that makes
up a search snippet. The title tag will be used as the title of the snippet while the
contents of the description tag will be used for the description. If these tags are not
available, content from within the page may be used instead.

Lead scoring
Lead scoring is directly connected to search engines and marketing. It consists in an
algorithmic based profiling of leads in order to filter based on a set of predefined
criteria. The practice is becoming increasingly popular.
An example of this would be generating a score for each client visiting a web site, or
reading an email, to determine who is interested in a specific page or offer on a
website, or email. The practice can be utilized effectively in delivering relevant
content to a web visitor, increasing utility of the website or portal.
The practice is also utilized extensively by Web Ad Serving companies who deliver
web advertising based on a browsers previous behavior, or search engines who deliver
sponsored ads based on previous searches.
A whole new breed of web based software is being developed and introduced to the
market place to enable sales and marketing organizations to make use of lead scoring,
factoring in a many variables. They can range from human generated rank, to web
generated analytics.

Media transparency
While browsing the net, it is important to assure that media transparency is preserved
all the time. Media Transparency is the concept of determining how and why
information is conveyed through various means. This concept is related to the one of
―transparency‖ and it implies openness and accountability. It is a metaphorical
extension of the meaning used for a ―transparent‖ object, which is one that can be
seen through.
In communication studies, Media are transparent when:

      there are many, often competing, sources of information
      much is known about the method of information delivery
      the funding of media production is publicly available

Aspects of transparent media include open source documentation, open meetings,
financial disclosure statements, the freedom of information legislation, budgetary
review, peer review, etc.
Some organisations and networks insist that not only the ordinary information of
interest to the community is made freely available, but that all meta-levels of
organising and decision-making should also be published. This is known as radical
transparency. These organizations include: Wikipedia and the GNU/Linux
community.

Online identity management
Online identity management (OIM), also known as online image management or
online personal branding, is a set of methods for generating a distinguished ―web
presence‖ of a person on the Internet. That presence could be reflected in any kind of
content that refers to the person, including news, participation in blogs and forums,
personal web sites, social media presence, pictures, video, etc.
Online identity management also refers to identity exposure and identity disclosure,
and has particularly developed in the management on online identity in social network
services and also in online dating services.
One aspect of the online identity management process has to do with improving the
quantity and quality of traffic to sites that have content related to a person. In that
aspect, OIM is a part of another discipline called search engine optimization with the
difference that the only keyword is the person's name, and the optimization object is
not necessarily a single web site; it can consider a set of completely different sites that
contain positive online references. The objective in this case is to get high rankings
for as many sites as possible when someone search for a person's name. If the search
engine used is Google, this action is called "to google someone‖.
Online identity management often involves participation in social media sites like
Facebook, Flickr, YouTube, Twitter, Myspace, Badoo and other online communities
and community websites and is related to blogging as well.
Online lead generation
Online Lead Generation is a marketing term that refers to the creation or generation
of prospective consumer interest or inquiry into a business' products or services
online. Leads can be generated for a variety of purposes - list building, e-newsletter
list acquisition, building out reward programs, loyalty programs or other member
acquisition programs.
A lead is a sign-up for an advertiser offer that includes contact information and in
some cases, demographic information. There are two types of leads in the lead
generation market: sales leads and marketing leads.
Sales leads are generated on the basis of demographic criteria such as credit score,
income, age, etc. These leads are resold to multiple advertisers. Sales leads are
typically followed up through phone calls by the sales force. Sales leads are
commonly found in the mortgage, insurance and finance leads.
Marketing leads are brand-specific leads generated for a unique advertiser offer. In
direct contrast to sales leads, marketing leads are sold only once. Because
transparency is a necessary requisite for generating marketing leads, marketing lead
campaigns can be optimized by mapping leads to their sources.

Kijiji
Kijiji (pronounced key-gee-gee) is a Swahili word for village. Kijiji is a centralized
network of online urban communities for posting local online classified ads. It is a
subsidiary of eBay that was launched in March 2005. Kijiji websites are currently
available for more than 300 cities in Germany. Further Kijiji countries are France,
Italy, Canada, China, India, Taiwan and Japan. Kijiji was made available to selected
cities in the United States in June 2007.
Kijiji has

        45 million unique visitors per month, worldwide — 4.3 million repeat unique
         visitors
        7 million total live ads — more than 136,000 ads per 1 million/pop
        198,000 ads listed daily (equivalent to 2 new ads every second)
        1.3 billion page views per month
        Has experienced triple-digit YoY growth in most key metrics
        Available in more than 1,000 cities and neighborhoods worldwide
        Kijiji Canada is Canada’s No. 1 classifieds site
        Kijiji Taiwan is Taiwan’s No. 1 free classifieds site
        Kijiji U.S. is the No. 2 classifieds site in the U.S.


Kijiji offers similar services and is seen as a competitor to Craigslist with the biggest
exception being that Kijiji has quite an extensive pets section. In April 2008 eBay
launched a lawsuit against Craigslist claiming that their executives were attempting to
weaken eBay's investment, while in May of the same year Craiglist filed a countersuit
claiming Kijiji had stolen trade secrets and that eBay used misleading tactics to
promote the service.

Zappos.com
Zappos.com is an electronic commerce company specializing in footwear and is
currently based in Henderson, Nevada, U.S.A. Their warehouse is in Kentucky, along
with an outlet store. In addition, Zappos has two outlets stores in Las Vegas and
Henderson, Nevada.
Since its founding in 1999, Zappos has grown to be the biggest online shoe store.
Zappos did "almost nothing" in sales for 1999, but grossed over $800 million in
merchandise sales in 2007, and probably over $1 billion in 2008.
The name Zappos is derived from the Spanish word zapatos, meaning shoes.
Zappos has expanded from shoes to handbags and purses, and has launched a second
line of high-end shoes called Zappos Couture.
Zappos also serves the niche shoe markets, including narrow and wide widths, hard-
to-find sizes, American-made shoes, vegan shoes and Zappos exclusives.
Recently, Zappos has started to sell eyewear, apparel, and watches, as well as
electronic devices and media, such as DVDs.

Sales model
Zappos uses a loyalty business model and relationship marketing. The primary
sources of the company's rapid growth have been repeat customers and numerous
word of mouth recommendations. In 2005, the chairman reported that 60% of
customers were repeat buyers. Zappos has a stated goal to offer "best service in the
industry." Their service promotes such benefits as:

      Free shipping both ways
      A 365-day return policy
      A call center that is always open

They ended their 110% price protection policy and free overnight shipping in January
2008. The company promises 4-day shipping free with all orders but often delivers
next-day anyway, so as to pleasantly surprise customers.

Company culture and core values
Zappos claims to place great emphasis on company culture and core values. The
company publishes a "Culture Book" annually that is made up of contributions from
employees describing what the company culture means to them.
According to the company, the core value is to "deliver 'wow' through service." A list
on their website lists ten guiding principles embraced by the company.
All employees that are hired for their corporate office, regardless of position, are
required to undergo a 4-week Customer Loyalty Training course, which includes at
least 2 weeks of talking on the phone with customers in the call center at full salary.
After a week of training, the new employees are offered $2,000 to leave the company
immediately, no strings attached. This is to ensure people are there for the love of the
job and not the money. Over 97% turn down the buyout. The quit-now bonus began at
$100. It was soon bumped to $500 then $1,000. They currently offer $2,000 to "quit
now".

Craigslist
Craigslist is a centralized network of online communities, featuring free online
classified ads– with sections devoted to jobs, housing, personals, for sale, services,
gigs and discussion forums.
Craig Newmark began the service in 1995 as an email distribution list of friends,
featuring local events in the San Francisco Bay Area, before becoming a web-based
service in 1996. After incorporation as a private for-profit company in 1999,
Craigslist expanded into more U.S. and, as of April 2009, Craigslist has established
itself in approximately 570 cities in 50 countries.
As of 2009, Craigslist operates with a staff of 28 people. Its sole source of revenue is
paid job ads in select cities – $75 per ad for the San Francisco Bay Area; $25 per ad
for New York, Los Angeles, San Diego, Boston, Seattle, Washington D.C., Chicago
and Portland (OR) and paid broker apartment listings in New York City ($10 per ad).
A $5 charge per erotic services listing was added in November 2008; the site intends
to donate resultant revenue to charity. Craigslist suggests that the fees are intended
largely to deter illicit activities.
The site serves over twenty billion page views per month, putting it in 28th place
overall among web sites world wide, ninth place overall among web sites in the
United States and it has over fifty million unique monthly visitors in the United States
alone. With over forty million new classified advertisements each month, Craigslist is
the leading classifieds service. The site receives over one million new job listings
each month, making it one of the top job boards in the world.The classified
advertisements range from traditional buy/sell ads and community announcements, to
personal ads and erotic services.
The company does not formally disclose financial or ownership information. It is
believed to be owned principally by Newmark, Buckmaster, and eBay (the three
board members). eBay owns approximately 25%, and Newmark is believed to own
the largest stake.
To avoid illegal or inappropriate postings, Craigslist allows users to flag a posting that
appears to violate the site's policies.

Some significant events for Craigslist

      On August 1, 2004, Craigslist began charging $25 to post job openings on the
       New York and Los Angeles pages. On the same day, a new section was added
       called "Gigs", where low-cost and unpaid jobs and internships can be posted
       free.

      On August 13, 2004, Newmark announced on his blog that auction giant eBay
       had purchased a 25% stake in the company from a former principal. Some fans
       of Craigslist have expressed concern that this development will affect the site's
       longtime non-commercial nature. As of July 2008, there have been no
       substantive changes to the usefulness or non-advertising nature of the site (still
       no banner ads, still only charging for a few services to businesses).

Cities
The first 13 city sites were: San Francisco Bay Area, Boston, Chicago, Los Angeles,
New York, Portland, San Diego, Seattle, Washington D.C., Sacramento, Atlanta,
Austin, Denver. Vancouver, British Columbia, was the first non-U.S. city included.
London was the first city outside North America. In November 2004, Amsterdam,
Bangalore, Paris, Sao Paulo and Tokyo became the first cities outside primarily
English-speaking countries. As of May 2008, 500 "cities" in 50 countries are
represented. Some Craigslist sites cover large regions instead of individual
metropolitan areas — for example, the U.S. states of Delaware and Wyoming and the
upper Peninsula of Michigan.

EBay Inc.
eBay Inc. is an American Internet company that manages eBay.com, an online auction
and shopping website in which people and businesses buy and sell a broad variety
goods and services worldwide. A majority of the sales take place through a set-time
auction format, but subsequent methods include a substantial segment of listings in
the "Buy It Now" category. In addition to its original U.S. website, eBay has
established localized websites in thirty other countries. eBay Inc. also owns parts of
PayPal, Skype, Stubhub, Kijiji and other businesses.
The online auction website was founded as AuctionWeb in California on September
3, 1995, by a computer programmer called Pierre Omidyar, as part of a larger
personal site. In 1997, the company received approximately $5 million in funding
from the venture capital firm Benchmark Capital. The very first item sold on eBay
was a broken laser pointer for $14.83. Surprised, Omidyar contacted the winning
bidder to ask if he understood that the laser pointer was broken. In his responding
email, the buyer explained: ―I'm a collector of broken laser pointers‖.
In November 1996, eBay entered into its first third-party licensing deal, with a
company called Electronic Travel Auction to use SmartMarket Technology to sell
plane tickets and other travel products. The company officially changed the name of
its service from AuctionWeb to eBay in September 1997. Originally, the site belonged
to Echo Bay Technology Group, Omidyar's consulting firm. Omidyar had tried to
register the domain name echobay.com (the domain has recently been put up for sale)
but found it already taken by the Echo Bay Mines, a gold mining company, so he
shortened it to his second choice, eBay.com.
eBay went public in September 1988 and Omidyar became instantly a billionaire. In
February 2002 the company purchased Ibazar, a similar European auction web site
founded in 1995 and then they bought PayPal in 2002.

Items and Lack of Service
Millions of collectibles, appliances, furnishings, vehicles, and other miscellaneous
items are listed, bought, and sold daily. In 2005, eBay launched its Business &
Industrial category, breaking into the industrial surplus business. Some items are rare
and valuable, while many others are dusty paraphernalia that would have been
discarded if not for the thousands of eager bidders worldwide. Anything may be
offered for sale as long as it is not illegal and does not violate the eBay Prohibited and
Restricted Items policy. Services and intangibles can be sold, too. Large international
companies, such as IBM, sell their newest products and offer services on eBay using
competitive auctions and fixed-priced storefronts. Separate eBay sites such as eBay
US and eBay UK allow the users to trade using the local currency. In June 2005,
there were more than 15,000 members in the eBay Developers Program, comprising a
broad range of companies creating software applications to support eBay buyers and
sellers as well as eBay Affiliates.
Controversy has arisen over certain items put up for bid. For instance, in late 1999, a
man offered one of his kidneys for auction on eBay, attempting to profit from the
potentially lucrative (and, in the United States, illegal) market for transplantable
human organs. On other occasions, people and even entire towns have been listed,
often as a joke or to garner free publicity. In general, the company removes auctions
that violate its terms of service agreement.

Auction types and bidding
eBay offers several types of auctions:

      Auction-style listings allow the seller to offer one or more items for sale for a
       specified number of days. The seller can establish a reserve price.
      Fixed Price format allows the seller to offer one or more items for sale at a
       Buy It Now price. Buyers who agree to pay that price win the auction
       immediately without submitting a bid.
      Dutch Auctions allow the seller to offer two or more identical items in the
       same auction. Bidders can bid for any number from one item up to the total
       number offered.

Seller Ratings
In 2007, eBay began using detailed seller ratings with four different categories. When
leaving feedback, buyers are asked to rate the seller in each of these categories with a
score of one to five stars, with five being the highest rating and one the lowest. Unlike
the overall feedback rating, these ratings are anonymous; neither sellers nor other
users learn how individual buyers rated the seller. The listings of sellers with a rating
of 4.3 or below in any of the four rating categories appear lower in search results.
Power Sellers are required to have scores in each category above 4.5.

Profit and transactions
eBay generates revenue from a number of fees. The eBay fee system is quite
complex; there are fees to list a product (Insertion Fee) and fees when the product
sells (Final Value Fee), plus several optional adornment fees, all based on various
factors and scales. The U.S.-based eBay.com takes $0.10 to $4 (based on the opening
price) for a basic listing without any adornments and 8.75% or less of the final price
(as of May 2009). The UK based ebay.co.uk takes from GBP £0.15 to a maximum
rate of GBP £3 per £100 for an ordinary listing and from 0.75 percent to 10% (writing
as of June 2009) percent of the final price. Reduced FVF's are available to business
registered customers. In addition, eBay now owns the PayPal payment system which
has fees of its own. Under current U.S. law, a state cannot require sellers located
outside the state to collect a sales tax, making deals more attractive to buyers.
Although some state laws require purchasers to pay sales tax to their own states on
out-of-state purchases, it is not a common practice. However, most sellers that operate
as a full time business do follow state tax regulations on their eBay transactions. For
the tax called Value added Tax (VAT), eBay requires sellers to include the VAT fees
in their listing price and not as an add-on and thus eBay profits by collecting fees
based on what governments tax for VAT.
The company's current business strategy includes increasing international trade. eBay
has already expanded to over two dozen countries, including China and India. The
only places where expansion failed were Taiwan and Japan, where Yahoo! had a head
start, and New Zealand where TradeMe is the dominant online auction website.
A more recent strategy involves the company increasingly leveraging the relationship
between the eBay auction site and PayPal: the impact of driving buyers and sellers to
use PayPal means not only does eBay turn buyers into clients (as a pure auction venue
its clients used to be predominantly sellers), but for each new PayPal registration it
achieves via the eBay auction site it also earns offsite revenue when the resulting
PayPal account is used in non-eBay transactions.

Prohibited or restricted Items
In its earliest days, eBay was essentially unregulated. However, as the site grew, it
became necessary to restrict or forbid auctions for various items. Note that some of
the restrictions relate to eBay.com (the US site), while other restrictions apply to
specific European sites (such as Nazi articles). Regional laws and regulations may
apply to the seller or the buyer. Among the hundred or so banned or restricted
categories:

      Tobacco (tobacco-related items and collectibles are accepted.)
      Alcohol (alcohol-related collectibles, including sealed containers, as well as
       some wine sales by licensed sellers are allowed)
      drugs and drug paraphernalia
      Nazi paraphernalia
      Bootleg recordings
      Firearms and ammunition, including any parts that could be used to assemble
       a firearm as well as any firearm part that is required for the firing of a gun,
       including bullet tips. Crossbows and various types of knives are also
       forbidden.
      Used underwear and dirty used clothing
      Teachers' editions of textbooks, including home school teacher's editions.
      Human parts and remains (with an exception for skeletons and skulls for
       scientific study, provided they are not Native American)
      Live animals (with certain exceptions)
      Certain copyrighted works or trademarked items
      Lock-picking tools.
      Lottery tickets, sweepstakes tickets, or any other gambling items.
      Military hardware such as working weapons or explosives.
      Virtual items from massively multiplayer online games.
      Non-physical items no longer can be sold through eBay. They can only be
       advertised through classified ads on eBay and do not get feedback.
      Ivory products.
      Knives, other than cutlery, are prohibited in the UK following media pressure
       about the sale of items assessed by police to be illegal.

Online pricing models
There are three pricing models in the online advertising market that marketers can use
to buy advertising and generate leads.
CPM (Cost-per-Thousand Pricing Models) charge advertisers for impressions (the
number of times people view an advertisement). Display advertising is commonly
sold on a CPM pricing model. The problem with CPM advertising is that advertisers
are charged even if the target audience does not click on (or even view) the
advertisement.
CPC (Cost-per-Click) advertising overcomes this problem by charging advertisers
only when the consumer clicks on the advertisement. However, due to increased
competition, search keywords have become very expensive. A 2007 report shows that
there were nearly six times as many keywords with a cost per click (CPC) of more
than $1 in January of 2007 than the prior year. The cost per keyword increased by
33% and the cost per click rose by 55%.
In recent times, there has been a rapid increase in online lead generation — banner
and direct response advertising that works off a Cost-per-Lead pricing model. In a
CPL pricing model, advertisers pay only for qualified leads — irrespective of the
clicks or impressions that went into generating the lead. CPL advertising is also
commonly referred to as online lead generation.
CPL pricing models are the most advertiser friendly. Two-thirds of senior marketers
expect 20 percent of ad revenue to move away from impression-based sales, in favor
of action-based models within three years.
Online lead generation is growing at 71% rate, more than twice as fast as the online
advertising market.

CPL advertising and CPA advertising
For marketers that are looking to pay only for specific actions, there are two options:
CPL advertising (or online lead generation) and CPA advertising (Cost-per-Action,
also referred to as affiliate marketing; it’s an online advertising pricing model, where
the advertiser pays for each specified action, a purchase, a form submission, and so
on, linked to the advertisement.)
In CPL campaigns, advertisers pay for an interested lead — like the contact
information of a person interested in the advertiser's product or service. CPL
campaigns are suitable for brand marketers and direct response marketers looking to
engage consumers at multiple touchpoints — by building a newsletter list, community
site, reward program or member acquisition program.
In CPA campaigns, the advertiser typically pays for a completed sale involving a
credit card transaction. CPA is all about 'now' — it focuses on driving consumers to
buy at that exact moment. If a visitor to the website doesn't buy anything, there's no
easy way to remarket to them.

There are other important differentiators:

1. CPL campaigns are advertiser-centric. The advertiser remains in control of their
brand, selecting trusted and contextually relevant publishers to run their offers. On the
other hand, CPA and affiliate marketing campaigns are publisher-centric. Advertisers
cede control over where their brand will appear, as publishers browse offers and pick
which to run on their websites. Advertisers generally do not know where their offer is
running.
2. CPL campaigns are usually high volume and light-weight. In CPL campaigns,
consumers submit only basic contact information. The transaction can be as simple as
an email address. On the other hand, CPA campaigns are usually low volume and
complex. Typically, consumer has to submit credit card and other detailed
information.

Pay per click (PPC) is an Internet advertising model used on search engines,
advertising networks and content sites, such as blogs, in which advertisers pay their
host only when their ad is clicked. With search engines, advertisers typically bid on
keyword phrases relevant to their target market. Content sites commonly charge a
fixed price per click rather than use a bidding system.
Websites that utilize PPC ads will display an advertisement when a keyword query
matches an advertiser's keyword list, or when a content site displays relevant content.
Such advertisements are called sponsored links or sponsored ads, and appear adjacent
to or above organic results on search engine results pages, or anywhere a web
developer chooses on a content site.
Although many PPC providers exist, Google AdWords, Yahoo!Search Marketing and
Microsoft AdCenter are the three largest network operators, and all three operate
under a bid-based model. Cost per click (CPC) varies depending on the search engine
and the level of competition for a particular keyword.
The PPC advertising model is open to abuse through click fraud, although Google
and other search engines have implemented automated systems to guard against
abusive clicks by competitors or corrupt web developers.
Determining cost per click
There are two primary models for determining cost per click: flat-rate and bid-based.
In both cases the advertiser must consider the potential value of a click from a given
source. This value is based on the type of individual the advertiser is expecting to
receive as a visitor to his or her website, and what the advertiser can gain from that
visit, usually revenue, both in the short term as well as in the long term. As with other
forms of advertising targeting is key, and factors that often play into PPC campaigns
include the target's interest (often defined by a search term they have entered into a
search engine, or the content of a page that they are browsing), intent (to purchase or
not), location and the day and time that they are browsing.

Flat-rate PPC
In the flat-rate model, the advertiser and publisher agree upon a fixed amount that will
be paid for each click. In many cases the publisher has a rate card that lists the CPC
within different areas of their website or network. These various amounts are often
related to the content on pages, with content that generally attracts more valuable
visitors having a higher CPC than content that attracts less valuable visitors. However,
in many cases advertisers can negotiate lower rates, especially when committing to a
long-term or high-value contract. The flat-rate model is particularly common to
comparison shopping engines, which typically publish rate cards. However, these
rates are sometimes minimums and advertisers can pay more for greater visibility.
These sites are usually compartmentalized into product or service categories, which
allows for a high degree of targeting by advertisers. In many cases, the entire core
content of these sites is paid ads.

Bid-based PPC
In the bid-based model, the advertiser signs a contract that allows them to compete
against other advertisers in a private auction hosted by a publisher or an advertising
network. Each advertiser informs the host of the maximum amount that he or she is
willing to pay for a given ad spot (often based on a keyword), usually using online
tools to do so. The auction plays out in an automated fashion every time a visitor
triggers the ad spot.
When the ad spot is part of a search engine results page (SERP), the automated
auction takes place whenever a search for the keyword that is being bid upon occurs.
All bids for the keyword that target the searcher's geo-location, the day and time of
the search, are then compared and the winner determined. In situations where there
are multiple ad spots, a common occurrence on SERPs, there can be multiple winners
whose positions on the page are influenced by the amount each has bid. The ad with
the highest bid generally shows up first, though additional factors such as ad quality
and relevance can sometimes come into play.
In addition to ad spots on SERPs, the major advertising networks allow for contextual
ads to be placed on the properties of 3rd-parties with whom they have partnered.
These publishers sign up to host ads on behalf of the network. In return, they receive a
portion of the ad revenue that the network generates, which can be anywhere from
50% to over 80% of the gross revenue paid by advertisers. These properties are often
referred to as a content network and the ads on them as contextual ads due to the fact
that the ad spots are associated with keywords based on the context of the page on
which they are found. In general, ads on content networks have a much lower click-
through-rate (CTR) than ads found on SERPs and consequently are less highly
valued. Content network properties can include websites, newsletters, and e-mails.
Advertisers pay for each click they receive, with the actual amount paid based on the
amount bid.
To maximize success and achieve scale, automated bid management systems can be
deployed. These systems can be used directly by the advertiser, though they are more
commonly used by advertising agencies that offer PPC bid management as a service.
These tools generally allow for bid management at scale, with thousands or even
millions of PPC bids controlled by a highly automated system. The system generally
sets each bid based on the goal that has been set for it, such as maximize profit,
maximize traffic at breakeven and so forth. The system is usually tied into the
advertiser's website and fed the results of each click, which then allows it to set bids.
The effectiveness of these systems is directly related to the quality and quantity of the
performance data that they have to work with - low-traffic ads can lead to a scarcity of
data problem that renders many bid management tools useless at worst, or inefficient
at best.

History of PPC
In February 1998 Jeffrey Brewer of Goto.com, a 25-employee startup company (later
Overture, now part of Yahoo!) presented a pay per click search engine. This
presentation and the events that followed created the PPC advertising system. Credit
for the concept of the PPC model is generally given to Idealab and Goto.com founder,
Bill Gross. Google started search engine advertising in December 1999. It was not
until October 2000 that the AdWords system was introduced, allowing advertisers to
create text ads for placement on the Google search engine. However, PPC was only
introduced in 2002; until then, advertisements were charged at cost-per-thousand
impressions. Yahoo! advertisements have been PPC-based since their introduction in
1998.

Cost per click (CPC) is the amount of money an advertiser pays search engines and
other Internet publishers for a single click on its advertisement that brings one visitor
to its website.

Cost Per Action or CPA (sometimes known as Pay Per Action or PPA) is an online
advertising pricing model, where the advertiser pays for each specified action (a
purchase, a form submission, and so on) linked to the advertisement.
Direct response advertisers consider CPA the optimal way to buy online advertising,
as an advertiser only pays for the ad when the desired action has occurred. An action
can be a product being purchased, a form being filled, etc. (The desired action to be
performed is determined by the advertiser.) Google incorporated this model into
Google AdSense, but shut down the offering in June 2008. eBay has recently
announced a similar pricing called AdContext.
The CPA can be determined by different factors, depending where the online
advertising inventory is being purchased.

Social media optimization (SMO)
(SMO) is a set of methods for generating publicity through social media, online
communities and community websites. Methods of SMO include adding RSS feeds,
social news buttons, blogging and incorporating third-party community functionalities
like images and videos. Social media optimization is related to search engine
marketing, but differs in several ways, primarily the focus on driving traffic from
sources other than search engines, though improved search ranking is also a benefit of
successful SMO.
Social media optimization is in many ways connected as a technique to viral
marketing, where word of mouth is created not through friends or family but through
the use of networking in social bookmarking, video and photo websites. In a similar
way the engagement with blogs achieves the same by sharing content through the use
of RSS in the blogosphere and special blog search engines.
Social Media optimization is considered an integral part of an online reputation
management (ORM) or Search Engine Reputation Management (SERM) strategy for
organizations or individuals who care about their online presence.
Social Media Optimisation (SMO) is not limited to marketing and brand building.
Increasingly smart businesses are integrating social media participation as part of their
knowledge management strategy (ie. product/service development, recruiting,
employee engagement and turnover, brand building, customer satisfaction and
relations, business development and more).

Define these concepts and answer the questions:

1)Organic search results
2) SERP
3) Online identity management (OIM)
4) In the Cost Per Action model, what is an ―Action‖?
5) What is the difference between sales leads and marketing leads?
6) What are Zappo’s company culture and core values?

1) Organic search results are listings in search engine results pages that appear
because of their relevance to the search terms, as opposed to those that appear there
because they are advertisements. Some search engines combine advertising and
search results on their search results pages. In each case, the adverts are designed to
look like the search results, except for minor visual distinctions such as their
background colour and/or placement on the page to trick users into clicking them.

2) A SERP (search engine results page) is a list of web pages returned by a search
engine, as a response to a keyword query. The results usually include a list of web
pages with titles, links to the page and a snippet showing where the keywords have
matched content within the page.

3) Online identity management (OIM) can also be called online image management
or online personal branding and is a set of methods to generate a distinguished ―web
presence‖ of a person/brand on the Internet.

4) Cost Per Action is an online advertising pricing model, where the advertiser pays
for each specified action a user does; it can be a purchase, a form submission linked to
the advertisement. It’s a good way to buy online advertising, as an advertiser only
pays for the ad when the desired action has occurred. The action can be defined as a
product being purchased, a form being filled, etc. (It’s the advertiser who decides
what is the desired action to be performed).

5) Sales leads are generated on the basis of demographic criteria such as credit score,
income, age, and can be sold to multiple advertisers. They are usually followed up by
phone calles. Marketing leads are brand-specific leads generated for a unique
advertiser offer. They are sold only once.
6) Every year Zappos publishes a "Culture Book" made up of contributions from
employees describing what the company culture means to them. Its core value is to
"deliver 'wow' through service." After a week of training, new employees are offered
$2,000 to leave the company immediately, no strings attached. This is to ensure
people are there for the love of the job and not the money