Reading the Google hit piece that appeared in Barron’s this week got me thinking about the whole pay-per-click model. Pay-per-click (PPC) has been around for more a decade, and while Google has made some positive changes to it, it’s showing its age.
If you think of the Internet advertising process as a series of actions, it would go like this:
Impression -> Click -> Action
Back in the old days the metric was CPM (cost per thousand), and advertisers paid per impression (getting the ad on the screen). CPM favored the publisher over the advertiser, as the publisher’s responsibility ended at the first part of the process. DoubleClick, an early ad serving company, came up with their DART system to match the right advertiser with the right screen in order to maximize the return on CPM.
PPC moved the metric forward in the process, measuring success (and payment) based not on how many times the ad was served, but how many times it was actually clicked. When most people think of PPC they think of Adsense, Google’s contextual advertising engine. But PPC is employed in banner advertising, on big ad farms like Doubleclick and other...