What is Pay for Performance

Today most search engines offer some type of pay-for-performance advertising. As opposed to organic search results, which are free by nature, pay-for-performance advertising has a cost associated with it. With pay-for-performance advertising, advertisers pay only for ads that "perform" in terms of delivering traffic.

Types of Pay-for-Performance Advertising
There are three main types of pay-for-performance advertising:

• Pay-per-Click
• Paid Inclusion
• Paid Sponsorship

Pay Per Click:

With pay-per-click advertising, advertisers bid on different keywords that are related to their business. When a user performs a search using one of these keywords, the related ads will be shown alongside the organic search results. If the user clicks on the advertiser's ad, then the advertiser is charged the agreed-upon bid amount.

The two most popular pay-per-click programs are Google Adwords and Yahoo! Search Marketing.

Google Adwords

Google Adwords program is the leading pay-per-click advertising solution today. It currently has over 150,000 advertisers worldwide. In addition, the advertiser's ad is shown not only at Google's search results, but also with Google's partner sites such as AOL.com or About.com.

Visit http://adwords.google.com to learn more about Google's AdWords program.

Yahoo! Search Marketing

Yahoo! is Google's main competitor in the field of PPC advertising. Yahoo's PPC branch, under its former name "Overture," was the first company to offer PPC advertising.

Yahoo! ranks PPC listings based on bid amount solely. For any given keyword, ads from the top three bidders are shown under the sponsored results sections at MSN, Alta Vista, CNN and other Yahoo! affiliated portals.

Visit http://searchmarketing.yahoo.com to learn more about Yahoo's pay per click program.

Paid Inclusion Advertising:

Paid inclusion is an advertising program through in Web pages are guaranteed to be included in a given search engine's index, in exchange for payment. No guarantee of improved or specific ranking is given. Some sites charge a single annual fee for inclusion, and others charge a fixed fee plus a cost-per-click (CPC).

The two most familiar and popular paid inclusion programs are Yahoo! Search Submit and Yahoo! Directory Submit.

Yahoo! Search Submit

Search Submit adds your site to the Yahoo! index and ensures that it will be re-crawled every 48 hours, as opposed to every two weeks for sites that are indexed automatically by the crawler. Search Submit costs $49 as an initial fee, and includes CPC fees (starting from $0.15) for each click you receive.

Yahoo! Directory Submit

Directory Submit simply adds your site to the Yahoo! Directory. There is a $299 fee for your site to be reviewed, and (if accepted) added to the Directory. After this, you will be charged an annual recurring fee of $299.

You can find more information about Yahoo! Pay for Performance products at http://searchmarketing.yahoo.com

Paid Sponsorship Advertising:

With paid sponsorship advertising you purchase a so-called “Featured Listing” (actually, your ad) on a selected keyword. Your listing then shows next to the search results for the selected keyword. You do not pay for every click – you pay for your presence in search results. There is no ad ranking system; if there are several listings for one keyword, they will appear in random order.