Monday, January 18, 2010

Google Adwords



Google Adwords allows the user to advertise to the target audience effectively and efficiently. The user determines who to and where to advertise, what to pay for this advertising including a maximum daily amount, and guides the user to accomplish all this with little or no advertising education.

Adwords works on the premise that an advertiser will pay an amount to place an ad at the top of a Google search. However, with Google Adwords the price the advertiser is willing to pay is just one aspect of how an ad is displayed. This evens the playing field, meaning an advertiser with a large advertising budget does not have an advantage over an advertiser with a smaller budget.
In determining the positioning of an ad on a page, Adwords uses a combination of cost-per-click (CPC) or cost-per-thousand (CPM) bid and quality score. The difference between CPC and CPM is with CPC the advertiser is charged the bid price each time an end user clicks on the ad and with CPM the advertiser is charged the bid price for each 1000 times the ad appears on the search page regardless of whether the end user clicks on the ad or not.

The quality score is a numerical value determined by the keyword click through rate, relevance of your ad text, historical keyword performance and other factors. Basically, if the keywords you choose drive customers to your site (high click through rate), the landing page from the click through is appropriate for the chosen keyword and the "other factors" are indicative of quality, your quality score will increase. And as your quality score increases the price you pay per click will decrease (lower your costs). Click through rate is the measure of how many people have clicked on your ad, a higher click through rate means more people have clicked on your ad.

One of the most unique features of Google Adwords (and there are many) is the ability of the advertiser to monitor on a near real time basis how an ad campaign is doing and can make modifications to the ad, keyword, target audience, and CPC/CPM bid to improve the placement of the ad on the Google search page immediately. This is very different from other types of advertising where a there is often a long lead time for any changes.