Keyword advertising

Keyword advertising is a form of online advertising in which an advertiser pays to have an advertisement appear in the results listing when a person uses a particular phrase to search the Web, typically by employing a search engine. The particular phrase is composed of one or more key terms that are linked to one or more advertisements. The most common form or keyword advertising, focused on payment methods, is pay per click (PPC), with other forms being cost per action (CPA) or cost per mille (CPM).

The first documented attempt at keyword advertising was 1996, by the search company OpenText, just a few years after the first attempt at banner advertisements. However, the project was soon abandoned.

In 1997 Yahoo!, through its partnership with Flycast Communications, successfully launched banner advertising based on keyword searches. Their concept originated from discussions in late 1996 with Chip Royce, head of online marketing for InterZine Productions of Boca Raton, Florida, who suggested that ads around keyword results would provide more effective results for advertisers. In 1997, Yahoo! obliged by placing targeted ad banners when the keyword "Golf" was searched by Yahoo! users. Yahoo! later turned this opportunity into a formal marketing program for its entire customer base and promoted this in a July 1997 article in the now defunct 'Internet Week' magazine.

In 1998, GoTo.com launched the first commercially successful keyword auction model, with a patent on the concept issued in 1998.

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