Hello everyone... Posting something after a long time...

I had this doubt in mind. Since I was more into PPC, this was disturbing me or rather confusing me. I just posted this in Linkedin and got some truly amazing responses...
Here are those for you...

My Question Was
What is the future of Pay Per Click?

The avg CPC of keywords are increasing every year... Might be after 5-10 years advertisers will not get the leads/sales at an acceptable CPL/CPA.
Then how will PPC be profitable? If they start other channels like Social networking, shouldn't it affect PPC? Your thoughts...

See the replies I got in Linkedin

Benin Brown
Co-Founder, Pamoja Media, Inc.

I think that with the economic challenges faced by the world's most developed economies right now the one thing that seems to be the biggest driver of online ads or advertising period is ROI.

With that being said I think that any of the cost per action models-CPC included are all here to stay. Perhaps they will undergo many more changes in the future to meet future demand. But in my opinion they are priced correctly, it is only that more companies are looking towards the direct marketing model as a way to quickly boost sales and as a result the price overshoots the supply of clicks available and hence is reflected in the pricing.


Chetna Khanna
Regional Head,
Sales and Marketing (West) at Banyan Netfaqs Pvt Ltd (www.afaqs.com)

The PPC, PPL, PPA models gained importance when organisations began to look at ROMI. While PPL and PPA are both effective when the campaign wishes to drive sales, there are not real measures in place to judge the effectiveness of brand campaigns. In such a scenario, the only real measure of a brand campaign aimed at grabbing mind share is a PPC model. A click on a creative gives to some extent a measure of the involvement of the surfer with the brand.

Thus, as long as there is a pressure on marketers measure their returns on marketing investments on campaign that do not initiate a direct response from the surfers, a PPC model would be the only measure of effectiveness of the campaign and will thus remain popular.

Brett Nicholson
Digital Marketing & Media Analyst at Next Digital

Hey Justine,

I find that for for the big brands to succeed on social environments, and sites outside of search there is a big component many fail to see. The focus on the 'click' (although we are miles behind in Australia with CPM dominating) will fade dramatically and success will be focused on engagement.

What happened when users saw the content - did they forward it on, watch, act, join, talk about, did it increase brand recall? These are all factors which the current CPC metric doesn't take into account.

Yes CPC will become more competitive if demand starts to out-wiegh supply, but it all seems cyclical in one way or another to me.


Hendrik van Slooten
Marketing & Development Manager Jr. at CameraNU.nl

Well there are already portals (which send people through with a CPC-model) who can actually see how much revenue "their" customers are creating, so even after those customers found you and closed the portal, it's still possible for them to see how much sales you really got, from these customers, on you own website. Seeing the amount of portals grow rapidly, makes me believe that the buyers (which pay for the clicks) will have more and more leverage to force portals only to charge valuable (read: REALLY BUYING) customers. This leverage is caused by the fact that if you have a non-cooperating portal, you just go to another one. Of course this isn't always possible, but I believe it will become more and more..

Steve Bottomley
Director of Broadcast Strategy at ITV plc

Hi Justine,

PPC is a pure method of payment for results but market CPMs will be set by the balance of supply and demand and demand is made up of advertisers who can afford very different customer acquisition costs. If a channel is effective for high margin product campaigns the market price will tend to increase making the channel expensive for low margin sectors. As markets mature there will be market price cycles driven by the demand profile.

As Brett says the purity of CPC pricing misses the value delivered (or not?) by previous ad views by the same customer which may have contributed to the decision to click/purchase. This branding value will be variable depending on the product, channel, creative etc. but it is the stuff thata drives the relatively high cpms of TV, Press etc. If content producers/channels rely on CPC models only they will probably deliver a lower RoI on their investment than if they use CPM models. IN my experience of TV I have never seen a pay per response TV campaign that produced anything like the same revenue as a 'normal' CPM (CPT) campaign. DRTV campaigns tend to run at the periphery of the schedule as a result.

So, I see advertisers pushing for CPC and media owners/channels pushing for CPM. Buyers have their own business dynamics which mean they must balance the need to produce results for their clients while adopting the trading method that produces a profit for them.

As online content develops further I would expect to see an amalgam of pricing models that reflect the differing levels of engagement, response delivery and measurability offered by differing channel types e.g. information websites, social sites, portals, media rich sites, blogs etc.

The onlne market has the potential to be as complex as all other media markets combined and more so. So, individual marketing campaigns will need to plan for, adapt to and cope with varying response levels, pricing models and value metrics.

As the market develops we will probably see many boom cycles and bubbles within it.

Steve

Dinesh Kulchandra
Sr. Manager Business Planning Communicate2

Search Advertising has been the mainstay of marketers looking at generating relevant eyeballs on their m-sites/acquiring leads. However important this medium might sound there is a general discomfort faced by advertisers owing to it's susceptibility. Misdirecting audience, for one had never been so dramatically convenient.
Somehow, contextual advertising is the next step in PPC considering that if my OOH audiences shift to CPC or CPL, with dynamic bidding models OR consider Print getting in contextual mode wherein if a SALE is happening aound my area is visible to a specific radius...
Best..
Dinesh

Taseer Rangrez
Business Development, Marketing, Sales Operations


PPC programs can deliver instant targeted visitors to your website in streaming amounts, but bear in mind the downsides of click fraud.

It has been estimated that up to 38% of all clicks through PPC advertising are fraudulent. Allegations have even been brought against the major search engines for not doing their part to control the click fraud issues, and critics are quick to point out the fact that search engine companies earn 99% of their income through this advertising method.

Industry analysis's predict a change in the next few years as PPC advertising shifts to CPA advertising with search engines. This will eliminate the click fraud issue, because advertisers will began to pay for actions instead of clicks. This form of advertising will become the most dominant form of online advertising.

properly managed PPC advertising campaign can still be the most effective online advertising method for a company. It IS still possible to achieve a great ROI for a particular product or service, and will continue to drive the most traffic, clicks, and sales for online advertising for years to come

Gianluigi Cuccureddu
Web Marketing Strategist Consultant @ Traffic4u

Hello Justine,

Competition will increase and be it by technology or ultra effective campaign management, outsmarting through targeting the right keywords at the right time at the right person will be the challenge.
Also the neverending increase of CPC's has its positive effect, at one point, the average advertisers will bail out due to price/competition and the price level will normalize.

Best regards,
Gianluigi Cuccureddu