By David Callan
The year is 2000, Google is seen as the leader in the search engine
industry by now. Many of Googles competitors are trying their hands
at different advertising models as a way to generate revenue. Google
currently seeing the most growth of them all saw the potential it
had as an advertising medium and therefore was sure to follow suite
sooner or later.
It did so with the launch of a keyword-targeted advertising program
aimed more towards bigger companies. However it was not until later
in the year when Google launched the Google Adwords program
that they became a mainstream player available to even the smallest
The original Adwords program worked well enough, however it worked
on the basis of payment by impressions which didn't guarantee the
advertiser a single click so in February 2002 it received a major
overhaul with the introduction of the Google Adwords Select
program (nowadays it's usually just known as Google Adwords as the
original program has been discontinued).
What is Google Adwords?
Adwords is Googles version of the pay-per-click advertising model.
It allows you to display ads which link directly to your website
when searches are done for your chosen keywords or keyphrases. These
ads are located to the right of the results which Google gives you
for a search and they're also displayed on Googles many partner
sites which include AOL, Earthlink, HowStuffWorks and blogger.
Recently with the launch of Googles Adsense program your ads could
also be displayed on websites related to your keywords.
When you create a Google Adwords ad, you choose keywords for which
your ad will appear and specify the maximum amount you're willing to
pay for each click. Remember Googles Adwords program uses a PPC
model so you only pay when someone actually clicks on your ad and
hence visits your website.
Adwords enables you to save money as its program Discounter
automatically reduces the actual cost per click you pay to the
lowest cost needed ($0.01 above competition) to maintain your ads
position on the results page.
Google is competing well in this arena, in fact they now dominate
the market, pulling more advertisers and revenue than former
industry leader Overture.com does. I don't know how long this will
last though as Yahoo INC! has just bought Overture. What has Yahoo
got up its sleeve?
Advantages of the Google Adwords program
Just as the popularity of Googles search engine is derived from its
strong technologically advanced features and results so too is its
advertising program Adwords. Google Adwords has many advantages over
similar programs such as Overture.com and Findwhat.com.
One of these has been mentioned already, it's the Adwords Discounter
feature which will lower your cost per click price to one cent above
your nearest competitor to allow to stay ahead of his or her ad.
This means that you don't have to be constantly checking if your
competitors have lowered their bids in order for you to minimize
your price, Google does this for you.
The way Google Adwords positions your ads is also another great
advantage of the program. In Adwords the position of a certain ad is
determined by multiplying your CPC (cost per click) by your CTR
(click through rate) and not simply by CPC alone as this would allow
the big fish to win all the time.
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