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Tuesday, March 11, 2008

Will PPC become an obsolete model?

With the news last month that PPC clickers aren't the valuable customers that advertisers might have expected, will we see a major change in the revenue models of search engines?

According to a Feb. 2008 report on PPC click-through rates, 6% of ad clickers are responsible for 50% of display ad clicks. These clickers, tagged as "Natural Born Clickers" further erode the validity of pay-per-click models because of their demographics.

These clickers tend to be younger, in the 25-44 age bracket, and have lower incomes, less than $40,000. What that means, is that many companies that measure the success of their ad campaigns by the number of click-throughs, are possibly getting site visitors not able to purchase the products or services being advertised.

The study went on to imply that the sucess of an ad campaign, therefore shouldn't be measured by clicks, but rather than by exposure. If that inference sticks, might we see search engines revert to the old CPM model?