by Sheri Fink

Created on: May 25, 2007

As more and more retailers and businesses begin to conduct transactions online, companies must continue to seek more innovative ways to reach their target audiences. More than half of all Web users rely on search engines when looking for specific Web content. The growth of search engine use has provided an opportunity for companies to advertise their products and services directly on search engine results pages, creating "pay-for-placement" advertisements.

Pay-for-placement, also known as pay-per-click (PPC), ads are available to advertisers on most of the major search engines. With pay-for-placement ads, advertisers bid on keywords and keyword phrases on which, when searched, their ad will display. The advertiser places a bid for the maximum amount they are willing to pay per click. The ads only display when triggered by a search on the keyword and the advertisers only pay when their ads are clicked. These ads can be highly effective in attracting new customers who may not otherwise have gone to an advertiser's site.

Pay-for-placement ads are becoming increasingly popular because they enable advertisers to gain an almost instantaneous flow of traffic to their sites. Search engines use sophisticated bid-management technology to allow advertisers some control over their ads and the conditions in which they display. These technologies also enable advertisers to track clicks and determine return on investment (sales minus ad expenses). Based on a detailed analysis of the various pay-for-placement options, I recommend advertising on the top pay-for-placement search engines, Google and Yahoo!. These search engines will provide the highest visibility, largest potential audience, and the most sophisticated reporting and analysis tools; enabling advertisers to get the largest potential return for their PPC investment.

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