Editors Note: This is a non-technical guide for new web advertisers. If you're looking for a guide to setting up and using an AD Words account, try this setup guide, this Google slideshow on optimizing campaigns and also visit our friends at the PPC Blog.
What Works for Marketing on the Web
Before we start on AD Words, let's put things in perspective. Pay-Per-Click (PPC) marketing can be a big help to an organization, but it isn't a substitute for a great web site with informative content, basic search engine optimization (SEO), and a good marketing plan.
Understanding the Google AD Words System
Google makes money by selling adverts: they are next to search results, on web sites, on Google Maps, and just about every other place on the web. Behind the scenes, advertisers are bidding in an 'ad auction' to display their ads for the most lucrative search terms, at the best times of day, and in the best possible places.
Google AD Words is a competitive bidding system for advertisers. Google sets the 'rules of the game' for whose ads will display and when and where it will display them.
In this article, we will introduce the core of the Google AD Words service, which is advertising next to search results. We'll address the topic of advertising on other web sites or the 'Google Display Network' in a future article.
The Google Search Network
- We Sell Purple Cows
In AD Words, you need to competitively bid to display advertisements next to predefined search terms or 'keywords'. For example, an advertiser could choose to bid up to $3.00 to display an advertisement next to search results for the search keyword 'purple cows.'
The advertiser only pays when a Google Search user actually clicks on the link in the ad. Thus, Google and other Search Engine Advertisers use what is called a Pay-Per-Click (PPC) advertising system.
How Much a Click to your Site will Cost
Google's own Chief Economist Hal Varian explains it best:
Again, Google AD Words is (mostly) a competitive system of bidding on search terms or 'keywords'.
How much you pay for a click is based a few different factors:
- How much you bid on that keyword
- How much your competition bid
- Your Google 'Quality Score' (more below)
Sprezzaturra: Simple Isn't So Simple
In the early days of Google, marketing with AD Words was relatively simple. Create some adverts, list a few keywords, set a budget and you were done.
Today Google, AD Words, and the larger internet are much more complex. Advertisers now bid to place advertisements according to keywords, the time of day, gender, age, computer device and even your history on the web. Google is great at both making money and connecting people to relevant content, so adding complexity to AD Words is a win-win for them.
While the price you bid for a keyword is an important factor, so is relevancy. The relevancy of your advertisement is determined by Google's 'Quality Score'. The quality score is a summary measurement of your own business history with AD Words, the web site where the advert links-to, and a few other small factors. Check out the video above or go here for more info.
The Rise of the PPC Manager
As Pay-Per-Click (PPC) marketing became increasingly complex and competitive, a new specialist profession emerged to manage complex advertising campaigns for clients - the 'PPC Manager'. This is one of our roles at CartaNova. To give you a sense of how involved PPC Management can be, check out this free PPC Flowchart by our friends at the PPC Blog.
PPC Managers are trained and experienced in writing effective ads, showing those ads to the right people, and testing under what conditions conversions from a potential to actual customer occur. The end result is that a PPC Manager can make the same advertising budget significantly more effective, bringing in many more customers at the same advertising budget level.
Search Marketing: Caveat Emptor
Today, there are many firms which offer Pay-Per-Click Management and online marketing services. Be careful! Much like their counterpart industry in Search Engine Optimization [Our SEO Article] [SEO on Wikpedia] there are numerous companies that are skilled at using technical barriers to soak money from their clients while offering minimal benefits in return. Any good PPC Marketing firm will stress transparency in their advertising campaigns, financial setup, and business operations.
As online advertising becomes increasingly sophisticated, we also see entirely legitimate concerns about consumer privacy and monopoly as well. You may be surprised to learn how much Google knows about you.
Return On Investment
What does it take to advertise effectively with Google AD Words?
- Focus on the Specifics. Don't compete for 'Cows', compete for 'Purple Cows'.
- A Good Web Site. Your Quality Score will affect how many clicks you get and at what price.
- Patience. Don't rush in and bid on high-value keywords. Do some tests for a few weeks, see what works for you, and then put together an aggressive PPC campaign.
The Future of AD Words
With touch-based devices (iPhone, iPad, Android, Mobile Devices, etc.) becoming an increasingly important part of the net, Google is poised for even more advertising growth. While you can already purchase adverts to display on mobile devices, Google's recent purchase of AD Mob is one of many signs that advertisers are moving to mobile and application-based marketing.
AD Words itself should also undergo some significant changes. While search-marketing (via keywords) is still the core of the AD Words service, it is possible that Google will one day eliminate keywords entirely, which means that you will simply enlist in AD Words at a certain budget, under certain conditions.
In the near future, however, AD Words remains a popular and often profitable way to reach new customers.