Not so long ago, Internet advertising came in a couple of basic flavors. The first was very similar to print advertising. You paid someone to put some kind of advertisement on a Web site — typically what’s known as a banner ad . The ad sat on the site for the specified period — a week, a month, a year — and if you were lucky, people clicked the ad and came to your Web site. You were paying for an ad placement.
Soon, a slight refinement to this model appeared. The main problem with the ad-placement model was that you didn’t really know what you were getting for your money. Sure, the ad would sit on the site for, say, a year, but what did that mean? Would a million people see it? Or a thousand? In many cases, all you had to go by was a vague promise from the site owner — “we get a million visitors a year,” for instance. Does that mean the page on which the ad sat would be seen a million times? Probably not. Worse, the promise might
have been something like “we get a million hits a year.” What’s a hit? Ah, you think you know, but you probably don’t. The term hit has come to mean just about nothing. People say hit when they mean visit, and sometimes say hit when they mean hit but hope you’ll think they mean visit. Want to know what a hit actually is?
A hit is a Web server request. When someone clicks a link leading to a page, the browser requests the page from the Web server; that’s the first hit. If the page has five images in it, those images have to be sent to the browser, too. That’s five more hits. If the visitor clicks a link and requests another page, that’s another hit, plus the images or other components inside the page. A hit might even be an error message, when a browser requests a page that no longer exists.
So, the next time someone tells you that his site gets, say, 100,000 hits a month, ask him what that means. Is that 100,000 visitors? Almost certainly not, unless he is misusing the term hits and really meant to say visitors. Does it mean 50,000 visitors? 10,000? Who knows?
Anyway, back to the story. If you put an ad on a site and pay for a month or year, what do you get? That’s right, no one knows what you get. So a second mechanism was developed — ads were sold by the ad impression. You would pay for the ad to be displayed a particular number of times. Ads were typically
sold in blocks of 1,000 impressions; they were priced by CPM.
CPM means cost per thousand (no, not per million; M is the Roman numeral for 1,000). If you pay, say, a CPM of $35, that means your $35 buys you 1,000 ad “impressions” — the ad will be loaded into Web pages 1,000 times. Each time an ad appears, it costs you 3.5 cents.
Hmm, still a few problems here. Just because your ad is loaded into a browser 1,000 times doesn’t mean the people viewing the pages actually saw the ad. What if the ad was “below the fold,” so far down the page that it wasn’t visible without scrolling down? Sure, it was loaded into the page, and if the visitor scrolled down he would see it. But if he didn’t scroll down, he wouldn’t.
And so what if the ad was actually seen 1,000 times; will someone actually click it? And if people do click, how often will they click? In general, not very often, somewhere near 1percent of the time (and often way below that level). And that’s where PPC comes in
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