On 2/01/09 we introduced an auction-based PPC (pay-per-click) model and no longer charge to display Ads (Impressions). We charge only when a Prospect clicks through your Ad to your Listing (called Cost Per Click, or CPC). You set a Maximum CPC for Ads in your Campaign. And a maximum daily cost. We do not charge a minimum monthly fee.
Ad Placement. The Ad placement formula for PPC Ads considers:
- Your Ad's CTR (CTR is the rate Prospects click on your Ad and go to your Listing). CTR is considered a measure of Ad quality. In the sense that a quality Ad is one that receives more frequent response from Prospects, because its copy does a better job of reflecting what Prospects are looking for.
- The Maximum CPC you set for your Campaign.
- The Maximum daily cost you set for your Campaign.
We combine these three factors to establish a Ranking of Ad Placement top to bottom.
Ad CPC Cost. Like Google we use the Vickrey auction style to establish the actual CPC we charge for each Ad. Everyone bids in secret. All Maximum CPC bids are compared and the person with the highest Maximum CPC pays the SECOND highest Maximum CPC amount (if and when a Prospect clicks on the top Ad). This means the person with the highest Maximum CPC pays the amount of the second highest Maximum CPC. The person with the second highest bid pays the third highest bid amount, etc. This auction style is great for advertisers because no matter how high your Maximum CPC, you bid only what you actually need to bid to beat out the next bidder. Examples:
| Your Bid |
Next Highest Bid |
What You Pay |
| $0.50 |
$0.45 |
$0.40 |
| $7.75 |
$0.45 |
$0.45 |
| $1.25 |
$0.45 |
$0.45 |
From the examples you can see that if your competitor bids $0.45 it doesn't matter how much above $0.45 you bid. You'll always end up paying just $0.45 per click. So what's the best way to bid? Easy, bid the highest amount that you're willing to pay. You'll never pay more than your max bid and you may pay less. Figure out what value a click has to your company and bid that amount.
