AdWords is
Google's flagship
advertising product and main source of revenue ($21 billion in
2008). AdWords offers
pay-per-click
(PPC) advertising, and site-targeted advertising for both text and
banner ads. The AdWords program includes
local, national, and international distribution. Google's text
advertisements are short, consisting of one title line and two
content text lines. Image ads can be one of several different
Interactive Advertising
Bureau (IAB) standard sizes.
Sales and
Support for Google's AdWords division is based in Ann Arbor,
Michigan
, the company's third-largest US facility behind its
Mountain View,
California
, headquarters and New York City
office.Engineering for AdWords is based in Mountain View,
California
.
Pay-Per-Click advertisements (PPC)
Advertisers specify the words that should trigger their ads and the
maximum amount they are willing to pay per click. When a user
searches Google's search engine on www.google.com or the relevant
local/national google server (e.g. www.google.co.uk for The United
Kingdom), ads (also known as creatives by Google) for relevant
words are shown as "sponsored links" on the right side of the
screen, and sometimes above the main search results.
The ordering of the
paid-for
listings depends on other advertisers' bids (PPC) and the
"quality score" of all ads shown for a given search. The quality
score is calculated by historical click-through rates, relevance of
an advertiser's ad text and keywords, an advertiser's account
history, and other relevance factors as determined by Google. The
quality score is also used by Google to set the minimum bids for an
advertiser's keywords
[79938]. The minimum bid takes into
consideration the quality of the landing page as well, which
includes the relevancy and originality of content, navigability,
and transparency into the nature of the business
[79939]. Though Google has released a list of
full guidelines for sites
[79940], the precise formula and meaning of
relevance and its definition is in part secret to Google and the
parameters used can change dynamically.
The auction mechanism that determines the order of the ads has been
described as a
Generalized second-price
auction.
This is claimed to have the property that the participants
do
not necessarily fare best when they truthfully reveal any
private information asked for by the auction mechanism (in this
case, the value of the keyword to them, in the form of a "truthful"
bid).
Placement targeted advertisements (formerly Site-Targeted
Advertisements)
In 2003 Google introduced site-targeted advertising. Using the
AdWords control panel, advertisers can enter keywords, domain
names, topics, and demographic targeting preferences, and Google
places the ads on what they see as relevant sites within their
content network. If domain names are targeted, Google also provides
a list of related sites for placement. Advertisers may bid on a
cost per impression (CPI) or
cost per click (CPC) basis for site
targeting
[79941].
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 higher visibility for the advertiser.
The minimum cost-per-thousand impressions bid for placement
targeted campaigns is 25 cents. There is no minimum CPC bid,
however.
AdWords distribution
All AdWords ads are eligible to be shown on www.google.com.
Advertisers also have the option of enabling their ads to show on
Google's partner networks. The "search network" includes
AOL search,
Ask.com, and
Netscape. Like www.google.com, these search engines
show AdWords ads in response to user searches.
The "content network" shows AdWords ads on sites that are not
search engines. These content network sites are those that use
AdSense, the other side of the Google
advertising model. AdSense is used by website owners who wish to
make money by displaying ads on their websites. Click through rates
on the content network are typically much lower than those on the
search network and are therefore ignored when calculating an
advertiser's quality score. It has been reported that using both
AdSense and AdWords may cause a website to pay Google a commission
when the website advertises itself.
Google automatically determines the subject of pages and displays
relevant ads based on the advertisers' keyword lists. AdSense
publishers may select channels to help direct Google's ad
placements on their pages, to better track performance of their ad
units. There are many different types of ads you can run across
Google's network, including text ads, image ads (banner ads), local
business ads, mobile text ads, and in-page video ads.
Google AdWords' main competitors are
Yahoo! Search Marketing and
Microsoft adCenter.
AdWords account management
To help clients with the complexity of building and managing
AdWords accounts
search engine
marketing agencies and consultants offer account management as
a business service. This has allowed organizations without
advertising expertise to reach a global, online audience. Google
has started the Google Advertising Professionals program to certify
agencies and consultants who have met specific qualifications and
passed an exam.. Google also provides account management software,
called
AdWords Editor.
Another useful feature is the My Client Centre available to Google
Professionals (even if not yet passed the exam or budget
parameters) whereby a Google professional has access and a
dashboard summary of several accounts and can move between those
accounts without logging in to each account.
The Google Adwords Keyword Tool provides a list of related keywords
for a specific website or keyword.
Recently, numerous complaints have been filed with the San Jose BBB
(http://sanjose.bbb.org/BusinessReport.aspx?CompanyID=214105)
regarding treatment small businesses have received from Google
Adwords customer service. As a result, the company now has a A-
rating with the San Jose BBB.
Click-to-Call
Google Click-to-Call was a service provided by
Google which allows users to call
advertisers from Google search results pages.
Users enter their phone number, Google calls them back and connects
to the advertiser. Calling charges are paid by Google.It was
discontinued in 2007.. For some time similar click-to-call
functionality was available for results in
Google Maps.
History
The original idea was invented by
Bill
Gross from Idealab who, in his turn, borrowed it from yellow
pages. Google wanted to buy out the idea but the deal would not get
closed. Google did not want to give up and launched AdWords in
2000.. AdWords followed Bill Gross' model to a significant extent.
In the course of legal action Google and Idealab settled the
dispute.
At first AdWords advertisers would pay a monthly amount, and Google
would then set up and manage their campaign. To accommodate small
businesses and those who wanted to manage their own campaigns,
Google soon introduced the AdWords self-service portal. Starting in
2005 Google provided a campaign management service called Jumpstart
to assist advertisers in setting up their campaigns. However, this
service is no longer available, so companies needing assistance
must hire a third-party service provider.
In 2005, Google launched the
Google Advertising Professional (GAP) Program to certify
individuals and companies who have completed AdWords training and
passed an exam. Due to the complexity of AdWords and the amount of
money at stake, some advertisers hire a consultant to manage their
campaigns.
Legal context
AdWords has generated lawsuits in the area of
trademark law (see
Google, Inc.
v. Am.
Blind
& Wallpaper Factory and
Rescuecom Corp. v. Google, Inc.), and
click fraud. In 2006, Google settled a click
fraud lawsuit for US$90 million.
Overture Services, Inc. sued
Google for
patent infringement
in April 2002 in relation to the AdWords service. Following
Yahoo!'s acquisition of Overture, the suit
was settled in 2004 with Google agreeing to issue 2.7 million
shares of common stock to Yahoo! in exchange for a perpetual
license under the patent.
Technology
The AdWords system was initially implemented on top of the
MySQL database engine. After the system had been
launched, management decided to use a commercial database (
Oracle) instead. The system became much
slower, so eventually it was returned to MySQL.The interface has
also been revamped to offer better work flow with additional new
features, such as, Spreadsheet Editing, Search Query Reports, and
better Conversion Metrics
Policy and restrictions
As of April 2008 Google AdWords no longer allows for the display
URL to deviate from that of the destination URL. Prior to its
introduction, Google paid advertisements could feature different
landing page URLs to that of what was being displayed on the search
network. Google expounds that the policy change stems from both
user and advertiser feedback. The concern prompting the restriction
change is believed to be the premise on which users clicked
advertisements. Users were in some cases, being misled and further
targeted by AdWords advertisers.
Google has other restrictions, for example the advertising of a
book by
Aaron
Greenspan called
Authoritas: One Student's Harvard
Admissions and the Founding of the Facebook Era, was
restricted from advertising on AdWords because it contained the
word
Facebook in it. Google's rationale was
that it was prohibited from advertising a book which used a
trademarked name in its title.
Allowed keywords
Google has also come under fire for allowing AdWords advertisers to
bid on trademarked keywords. In 2004, Google started allowing
advertisers to bid on a wide variety of search terms in the US and
Canada, including the trademarks of their competitors and in May
2008 expanded this policy to the UK and Ireland. Advertisers are
restricted from using other companies' trademarks in their
advertisement text if the trademark has been registered with
Advertising Legal Support team. Google does, however, require
certification to run regulated keywords, such as those related to
pharmaceuticals keywords, and some keywords, such as those related
to
gambling and
hacking, are not allowed at all.
These restrictions may vary by location. From June 2007, Google
banned AdWords adverts for student essay writing services. While
the move was welcomed by universities, there is no restriction on
such sites appearing in the regular Google Search results.
See also
References
- Inside Google's Michigan Office - Google -
InformationWeek
- An Inside Look At Google's AdWords HQ > >
Intelligent Enterprise: Better Insight for Business
Decisions
- Benjamin Edelman, Michael Ostrovsky, and Michael Schwarz:
"Internet Advertising and the Generalized Second-Price Auction:
Selling Billions of Dollars Worth of Keywords". American Economic
Review 97(1), 2007 pp 242-259.
- Hal R. Varian: "Position Auctions". International Journal of
Industrial Organization, 2006, doi:10.1016/j.ijindorg.2006.10.002
.
-
http://googlesystem.blogspot.com/2007/07/google-discontinues-click-to-call-and.html
- Google Milestones
- What is Jumpstart?
- Google, Yahoo bury the legal hatchet, Stefanie
Olsen, CNET News.com, August 9, 2004
- Xooglers: Let's get a real database
- Google's New Interface
- What do I need to know about the updated Display
URL policy? - Google Help Centre
- {{cite
web|url=http://www.marketwatch.com/news/story/silicon-valley-mild-mannered-specter-haunts/story.aspx?guid={DA2AE936-F19E-494B-B17B-CDBA3F2AF0BF}|title=Facebook
haunted by mild-mannered specter|author=Letzing, John|publisher=Dow
Jones Marketwatch|date=2008-07-12|accessdate=2008-10-29}}
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