Understanding Pay Per Click Advertising And Google Adwords

So where did the Pay Per Click Advertising concept originate from in case you are not sure what this is this is what eventually became Google AdWords. It was as far as I can work out pioneered by Bill Gross, the founder of a company called Idealab, who based the idea on the yellow pages. Initially, Google actually attempted to buy out the idea but was unsuccessful in its efforts, and eventually ended up launching AdWords in 2000 instead.

However, since AdWords followed the original Bill Gross model so closely, legal action inevitably followed, which Google and Idealab eventually settled. Adwords is now Google's most important and valuable advertising product and its biggest source of revenue.

At the very start, webmasters and businesses that used AdWords would pay Google a monthly amount in exchange for Google setting up and managing their ad campaigns. Soon after, Google soon introduced the AdWords self-service portal to service small businesses as well as those who preferred to manage their own campaigns. In 2005, Google began providing a campaign management service called Jumpstart to assist advertisers in setting up their campaigns,however this service has since been discontinued.

Today, AdWords offers pay-per-click (PPC) advertising, and placement targeted advertising (formerly known as site-targeted advertising) for both text and banner ads. The AdWords program allows advertisers to select whether they wish to advertise locally, nationally, or even have a world wide distribution. Google's text ads are short, with just one title line and two content text lines. Image ads are also available and can be one of several different Interactive Advertising Bureau (IAB) standard sizes.

Pay Per Click Advertising (PPC)

Pay Per Click Advertising or what it is known as in the marketing circles PPC is a form of Internet advertising that is used on content sites (like blogs for example) as well as search engines and ad networks. Advertisers post ad content with various web hosts and the host is paid only if and when their ad is clicked on. When you here marketing consultants speak about "pay per click advertising" literally means what it says: the advertiser pays each time a visitor clicks on their advertisement.

Google AdWords is currently the most popular PPC provider (the next most popular are Yahoo!, MSN, and Ask). When a web surfer or potential customer types in a search request on Google's search engine or what is the equivalent Local/National/Country then the Google server will present ads for relevant words which are shown as "sponsored links" on the right side of the screen, and sometimes above the main search results. This is also relative to your Country as well and as a advertiser on Google you can set your campaigns to only show in Australia or even more targeted town to cities.

How the paid-for listings are ranked depends both on other advertisers' bids (PPC) and the "quality score" of all ads shown for a given search. The quality score is calculated using a formula that takes into account historical click-through rates, relevance of an advertiser's ad text and keywords, an advertiser's account history and other factors as determined by Google. This quality score is also used by Google to set minimum bids for an advertiser's keywords. While a list of guidelines for sites is available from Google, the precise formula and its definition of "relevance" remain trade secrets.

What Is Placement Targeted Advertising

In 2003 Google rolled out what is called site-targeted advertising. With placement targeting, it is possible for an ad to take up the entire ad block rather than have the ad block split into 1 to 4 ads, resulting in better visibility for the advertiser.

Using the AdWords control panel, advertisers enter keywords, domain names, topics, and demographic targeting preferences, and Google then places the ads on what they see as relevant sites within their content network. If the advertiser wishes to target domain names, Google also provides a list of related sites for placement of the advertisements. Advertisers may bid on a Cost Per Impression (CPI) or Cost Per Click (CPC) basis for site targeting. The minimum cost-per-thousand impressions bid for placement targeted campaigns is 25 cents, however there is no minimum bid for CPC.

Hopefully our article has helped you to understand a little more about Pay Per Click Advertising and has given you a head start before opening your own Adwords account.