The Power of Paid Search… How to Succeed with Google Adwords

Google AdWords provides the Best Opportunity to dominate any online market in a targeted, controlled & cost effective manner in almost real time. And open to individuals, all organizations… small, medium or large from R50 per day upwards!

Can You Imagine a World Without Google?

Google started life in the information laboratory of Stanford University in 1996 and became a registered private company on September 4th 1998 before becoming a public company in 2004.

The mission of Google is stated as follows… "Google's mission is to organize the world's information and make it universally accessible and useful."… and (my words) to make a fortune in the process!).

In Q1 2009 Google’s reported revenue was $5.51 Billion with 67% coming from its own website properties and 30% coming from Google’s partner websites (referred to as Adsense sites).

The vast majority of people see Google as a search engine when in fact it makes something like 97% of its revenues from selling advertising.

Google is one of the world’s largest media companies. Their advertising model, referred to as Google Adwords, is based upon both keyword based and contextual based search using Google’s powerful algorithms. Google search engine is the vehicle used to distribute advertisements referred to as "Sponsored Links" by Google.

In summary Google sells advertising space to any type of organisation or individual. When a search query is performed Google automatically populates the search results page with targeted adverts based upon the keyword used to initiate the search query. Advertisers only pay Google when an advert is actually clicked. Contrary to conventional advertising Google does not charge for the display of an advert.

What is Google Adwords?

When a searcher enters a search query into Google’s search box a page containing links to relevant web pages is displayed. Some of the links are in fact advertisements placed by Google in response to the keyword being searched. These advertisements will only show if one or more organizations are bidding for that particular search term (or a variation of it).

It should also be noted that even when an organisation bids on a specific keyword there is no guarantee that the organisation’s ad will show. The failure of an ad to show is a function of the quality score of an ad as perceived by Google’s algorithm.

Advertisements are identified as "Sponsored Listings".

Very few searchers actually realize that they are viewing a mixture of free search results and paid listings or ads.

The search results on the right hand side are Sponsored links or paid advertisements. Results on the left hand side with a yellow background are also paid advertisements. There are up to 11 slots for advertisements on a page.

The advertiser only pays Google if an ad is actually clicked… hence the name Pay Per Click or PPC.

This is a unique type of advertising since ad exposure costs nothing unlike traditional media where costs are based upon frequency and reach of display and not a specific action.

Since the ads placed are keyword based it is possible to target any type of searcher behaviour at a micro level.

The reporting presented by Google allows the return on adspend to be measured in almost real time. This is another important differentiation point between Adwords and any other type of advertising.

There are no minimum spend requirements and the amount paid for a click can vary from $0.01 to many Dollars per click. My use of US Dollars is intentional and is the currency choice that I had to make when I first set up my Adwords account. New account holders can choose other currencies eg Rands.

Google Adwords… Simple in Concept, Extremely Complex in Practice

Google allows advertisers to bid against each other in order to attempt to gain maximum exposure in the paid rankings… ie in simple terms if A bids more than B then all else being equal A’s ad will appear higher than B's ad. In actual practice the way the actual position (Adrank) of an ad shown is a function of many variables including the bid price, the click through rate (CTR) for the ad and a loosely defined Quality Score (QS) parameter.

It is fundamentally true that sponsored listings (ads) occupying a higher Adrank (ie position in table of sponsored listings) will enjoy a higher click through rate so long as each ad is directly comparable. It is often not a good idea to be in the first position.

It is not the intention of this presentation to go into any depth with respect to the effective set up and efficient running of an Adwords campaign except to say unless the system is well understood then the chance of a campaign being profitable is pretty low.

When Adwords campaigns are properly structured and there is a complete continuity between search query, ad display and landing page content then Adwords campaigns can easily provide a return on adspend far in excess of 100%.

To be continued...