The state of pay

Online advertising is booming. The more people click, the more hungry business becomes for the eyeballs (and wallets) of the clickers. Could this be the fattest cash cow on the planet?

I love Wikipedia – not only does it give me great info to fuel my column with excellent pages like this, but it is also non-profit and has no advertising on it.

Unfortunately, commercial reality dictates that Wikipedia will remain an extremely rare species. Our future is destined to be paved with clicks of gold.

Google is by far the biggest player, with about 70% of the total online ad market – which works out to be about 400 gazillion dollars, enough to etch the Google logo on the sun, send a team of programmers to Andromeda to explore new markets and save the Google Earth on google.org. Google is the biggest for good reason – its system is very good. It gives advertisers more control than anybody else, more reach into huge search and content markets and an ever-improving delivery of relevant ads to Web users as the system is refined. Google’s search behavior statistics get cumulatively refined at a rate of a few billion facts a day.

“Unfortunately, commercial reality dictates that Wikipedia will remain an extremely rare species.”

Web-users want to find stuff and business want to be found. Matching these two is the perfect scenario… in theory. The truth is that there is still a long way to go before clicks and sales are perfectly in sync. Anyone who has used advertising programs knows that only a small proportion of the original search traffic converts into sales – and when you are bidding for every click, that can get a little scary at times.

So here is a brief glossary of online advertising terms to help you maintain your sense of humor while things evolve:

• Auto-Bidding – Letting two computers – yours and your competitor’s – play poker with your credit cards.
• Click-Through-Rate (CTR) – How many people accidentally clicked on your advert.
• Bounce Rate – How many people realised it was an accident and hit their back-button… AFTER you paid for their click.
• Cost-Per-Click (CPC) – How desperate you and your competitors are for business. (I once saw a CPC for search term “mortgage” at $180 – for ONE CLICK!)
• Return on Investment (ROI) – Putting your credit card statement and cheque account statement side by side and seeing which is bigger.
• Page Rank (PR) – Discovering how insignificant you are compared to Apple, YouTube and http://get.adobe.com/reader/ 

The reality is that online advertising can work spectacularly well. Inefficient as it might be at times, it is far more targeted than mass media. It is getting ever more sophisticated, especially when you consider sites like Facebook. They know everything about you and can serve you an advert for “getting ripped in 4 weeks without exercise” the moment you update your status to “man, that all-you-can-eat buffet was awesome!”

Maybe it will all get too hard for small businesses, who simply can’t afford the rising click costs or the time to devote to learning the schemes and systems required to capitalize effectively on all this paid traffic. Perhaps it’s time to get back to our marketing roots – old school. A giant inflatable gorilla, a sandwich board, and a bullhorn!