AdWords is Google’s flagship search engine marketing online advertising program. It is based on a competitive bidding pay-per-click advertising model. Advertisers go up against each other in a real-time in an attempt to gain a top listing position by out-bidding and strategically out-smarting their competitors through the use of keywords, carefully composed text ads, bid amounts and daily budget amounts. The advertiser agrees to pay a specified amount, plus a potential 20% more, for each click their text ad receives.
Advertisers register for the program by opening an account. The advertiser establishes campaigns typically to sell a product or service. These campaigns may be further organized by AdGroups, which are sub-sets of the campaign designed to effectively manage categories of keywords and phrases. Whether at the campaign level or the AdGroup level, the advertiser associates keywords and phrases understood to be typed by users searching for what he is selling with carefully composed text ads. These text ads will be triggered to post when the advertiser’s keyword or phrase matches a search query.
There are many factors that determine if and how often an advertiser’s text ad will post. These factors include: matching keywords and phrases, maximum cost per click at the keyword level, and maximum daily budget. Ads post publicly in the ‘Sponsored’ section of the Google.com search engine results pages. To achieve a broader, but sometimes less targeted reach, AdWords advertisers can elect to have their ads display on relevant participating ad content network web pages as well.
Ranking, or listing position of the ad within the sponsored listings, is determined by Google’s proprietary mathematical algorithm that associates a Quality Score to the ad. In the simplest terms, if the ad receives a lot of clicks when triggered by a specified keyword or phrase then it will receive a high quality score and post at the top of the listings. The top three listing positions typically receive the most clicks through to the landing page (i.e.: higher CTR or ‘click through rate’). Generally speaking, as a result of the competitive bidding environment, higher click costs may also be associated with the top three listing positions.
Strategic campaign management is key to successfully tapping into the money-making potential of AdWords and avoiding disappointing results that can be costly and quickly deplete a budget. The program provides many helpful online management tools including results tracking and on demand reporting capabilities. Success depends on many variables including keyword selection, effective text ad writing, accurate bidding on a keyword level, demand for the product/service within the search environment, setting the right daily budget amounts, appropriate goal setting, and landing pages designed for conversion that effectively support the goals of the campaign.
