The History of Paid Search Part 1

Early Years of Paid Search

The origins of Internet Marketing can be traced back to the early 1990’s when the rapid expansion and access to the world wide web exploded as personal computers became mainstream and service providers like America Online and Prodigy offered affordable access to the internet for the first time.  Companies like hotwired.com began selling Display or banner advertisements to large companies including AT&T and Sears.  While the visual layout of placing display ads around news stories or other content followed the historic print media modality used by magazines and newspapers, for the first time advertisers could begin to track metrics associated with advertising at a more granular level.

In 1996, more companies began experimenting with advertising models online.  The most well documented of these models is generally credited to goto.com founder Bill Gross.  The business model was the first modality to allow advertisers to show ads for their products and services for search queries on relevant topics.  This Pay Per Click (PPC) model gained real traction, and by the end of 1997 there were more than 400 brand attempting PPC strategies online.

Over the following years, internet technology matured beyond academic research to an ecosystem for commerce and more.  Companies like amazon.com and eBay started maturing, expanding the scope of online queries, and the opportunity for businesses to push their products online.

Google Enters the Paid Search Market

Google officially entered the online advertising arena near the end of 1999, but didn’t introduce Google AdWords until the fourth quarter of 2000.  The initial version of AdWords was obviously vastly different than the tool us marketers use today.  While Google switched from visual banner ads to text ads, they utilized a peculiar Cost Per Mille (CPM) pricing model that charged advertisers a fee per 1,000 impressions.  AdWords showed promise, but the pricing structure definitely required tweaking and in 2002 Google switched to the Pay Per Click (PPC) model that is still used in search to this day.

More to come…