AdWords
Encyclopedia
Google AdWords is Google
's main advertising product and main source of revenue. Google's total advertising revenues were USD
$28 billion in 2010. AdWords offers pay-per-click (PPC) advertising, cost-per-thousand (CPM) advertising, and site-targeted advertising for text, banner, and rich-media ads. The AdWords program includes local, national, and international distribution. Google's text advertisements are short, consisting of one headline consisting of 25 characters and two additional text lines consisting of 35 characters each. Image ads can be one of several different Interactive Advertising Bureau
(IAB) standard sizes. Google has also started a beta launch of a supplier directory at http://www.google.com/ads/supplierdirectory/.
Sales and Support for Google's AdWords division is based in Mountain View, California
, with major secondary offices 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.
s (CTR) for the ads are about 8% for the first ad, 5% for the second one, and 2.5% for the third one. Search results can return from 0 to 12 ads.
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 search-engine system calculates the quality score on the basis of 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. 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. Though Google has released a list of full guidelines for sites, 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 is 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).
(IP) address exclusion. This feature enables advertisers to specify IP address ranges where they don't want their ads to appear.
Frequency capping: Frequency capping limits the number of times ads appear to the same unique user on the Google Content Network. It doesn't apply to the Search Network. If frequency capping is enabled for a campaign, a limit must be specified as to the number of impressions allowed per day, week, or month for an individual user. The cap can be configured to apply to each ad, ad group, or campaign.
(CPM) or cost-per-click (CPC) basis for site targeting.
With placement targeting, it is possible for an ad to take up the entire ad block rather than have the ad block split into 2 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.
, Ask.com
, and Netscape
. Like www.google.com, these search engines show AdWords ads in response to user searches, but do not affect quality score.
The "Google Display Network" (formerly referred to as the "content network") shows AdWords ads on sites that are not search engines. These content network sites are those that use AdSense
and DoubleClick
, 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 display network are typically much lower than those on the search network and are therefore ignored when calculating an advertiser's quality score.
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 increase performance of their ad units. There are many different types of ads that can run across Google's network, including text ads, image ads (banner ads), mobile text ads, and in-page video ads.
Google AdWords' main competitors are Yahoo! Search Marketing
and Microsoft adCenter
.
In 2010, Yahoo formed a partnership with Microsoft, giving Microsoft the control over powering the Yahoo search marketing ads. Both accounts are now run through Microsoft AdCenter. When ads are displayed on Yahoo now, it is powered by Microsoft AdCenter and is run through the Microsoft software interface.
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 Center 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.
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
. In the Froyo release of Google's Android operating system, in certain advertisements, there is a very similar functionality, where a user can easily call an advertiser.
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. Google's Jumpstart program offers free telephone support from a Google specialist to help users start their online advertising campaign.
In 2005, Google launched the Google Advertising Professional (GAP) Program to certify individuals and companies who 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.
In 2008, Google launched the Google Online Marketing Challenge (http://www.google.com/onlinechallenge/), an in-class academic exercise for tertiary students. Over 8,000 students from 47 countries participated in the 2008 Challenge, over 10,000 students from 58 countries took part in 2009, about 12,000 students in 2010 and almost 15,000 students from 70 countries in 2011. The Challenge runs annually, roughly from January to June. Registration is at the instructor rather than student level.
In 2009, Google revised the AdWords interface, introduced Local Business Ads for Google Maps and Video Ads.
), fraud (see Goddard 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.
database engine. After the system had been launched, management decided to use Oracle
instead. The system became much slower, so eventually it was returned to MySQL http://eldapo.blogspot.com/2007/05/lets-get-real-database.html.
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.
As of December 2010 Google AdWords has decreased its restrictions over sales of Hard Alcohol. It now allows ads that promote the sale of hard alcohol and liquor. This is an extension of a policy change that was made in December 2008, which permitted ads that promote the branding of hard alcohol and liquor.
, are not allowed at all. These restrictions may vary by location. From June 2007, Google banned AdWords adverts for student essay writing services, a move which was welcomed by universities.
Google has other restrictions, for example the advertising of a book related to Facebook
was restricted from advertising on AdWords because it contained the word "Facebook" in its title — the rationale being that it was prohibited from advertising a book which used a trademarked name in its title.
Google
Google Inc. is an American multinational public corporation invested in Internet search, cloud computing, and advertising technologies. Google hosts and develops a number of Internet-based services and products, and generates profit primarily from advertising through its AdWords program...
's main advertising product and main source of revenue. Google's total advertising revenues were USD
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
$28 billion in 2010. AdWords offers pay-per-click (PPC) advertising, cost-per-thousand (CPM) advertising, and site-targeted advertising for text, banner, and rich-media ads. The AdWords program includes local, national, and international distribution. Google's text advertisements are short, consisting of one headline consisting of 25 characters and two additional text lines consisting of 35 characters each. Image ads can be one of several different Interactive Advertising Bureau
Interactive Advertising Bureau
The Interactive Advertising Bureau is an advertising business organization that develops industry standards, conducts research, and provides legal support for the online advertising industry. The organization represents a large number of the most prominent media outlets in the United...
(IAB) standard sizes. Google has also started a beta launch of a supplier directory at http://www.google.com/ads/supplierdirectory/.
Sales and Support for Google's AdWords division is based in Mountain View, California
Mountain View, California
-Downtown:Mountain View has a pedestrian-friendly downtown centered on Castro Street. The downtown area consists of the seven blocks of Castro Street from the Downtown Mountain View Station transit center in the north to the intersection with El Camino Real in the south...
, with major secondary offices in Ann Arbor, Michigan
Ann Arbor, Michigan
Ann Arbor is a city in the U.S. state of Michigan and the county seat of Washtenaw County. The 2010 census places the population at 113,934, making it the sixth largest city in Michigan. The Ann Arbor Metropolitan Statistical Area had a population of 344,791 as of 2010...
, the company's third-largest US facility behind its Mountain View, California, headquarters
Googleplex
The Googleplex is the corporate headquarters complex of Google, Inc., located at 1600 Amphitheatre Parkway in Mountain View, Santa Clara County, California, United States, near San Jose. "Googleplex" is a portmanteau of Google and complex, and a reference to googolplex, the name given to the large...
and New York City office. Engineering for AdWords is based in Mountain View, California.
Pay-per-click advertisements (PPC)
Advertisers select the words that should trigger their ads and the maximum amount they will pay per click. When a user searches on Google, ads (also known as "creatives" within Google) for relevant words appear as "sponsored links" on the right side of the screen, and sometimes above the main search results. Click-through rateClick-through rate
Clickthrough rate is a way of measuring the success of an online advertising campaign. The clickthrough rate of an advertisement is defined as the number of clicks on an ad divided by the number of times the ad is shown , expressed as a percentage. For example, if a banner ad is delivered 100...
s (CTR) for the ads are about 8% for the first ad, 5% for the second one, and 2.5% for the third one. Search results can return from 0 to 12 ads.
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 search-engine system calculates the quality score on the basis of 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. 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. Though Google has released a list of full guidelines for sites, 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 is a generalized second-price auction
Generalized second-price auction
The generalized second-price auction is a non-truthful auction mechanism for multiple items. First thought of as a natural extension of the Vickrey auction, it actually doesn't conserve some good properties of the Vickrey auction . It is used mainly in the context of keyword auctions, where...
.
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).
AdWords features
IP address exclusion: In addition to controlling ad placements through methods such as location and language targeting, ad targeting can be refined with Internet ProtocolInternet Protocol
The Internet Protocol is the principal communications protocol used for relaying datagrams across an internetwork using the Internet Protocol Suite...
(IP) address exclusion. This feature enables advertisers to specify IP address ranges where they don't want their ads to appear.
- Up to 20 IP addresses, or ranges of addresses, can be excluded per campaign. All ads in the campaign are prevented from showing for users with the IP addresses specified.
- Location-based exclusion is also offered as a method of narrowing targeted users.
Frequency capping: Frequency capping limits the number of times ads appear to the same unique user on the Google Content Network. It doesn't apply to the Search Network. If frequency capping is enabled for a campaign, a limit must be specified as to the number of impressions allowed per day, week, or month for an individual user. The cap can be configured to apply to each ad, ad group, or campaign.
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-impressionCost Per Impression
Cost per impression, often abbreviated to CPI or CPM for Cost per thousand impressions, is a phrase often used in online advertising and marketing related to web traffic. It is used for measuring the worth and cost of a specific e-marketing campaign. This technique is applied with web banners,...
(CPM) or cost-per-click (CPC) basis for site targeting.
With placement targeting, it is possible for an ad to take up the entire ad block rather than have the ad block split into 2 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 searchAOL
AOL Inc. is an American global Internet services and media company. AOL is headquartered at 770 Broadway in New York. Founded in 1983 as Control Video Corporation, it has franchised its services to companies in several nations around the world or set up international versions of its services...
, Ask.com
Ask.com
Ask is a Q&A focused search engine founded in 1996 by Garrett Gruener and David Warthen in Berkeley, California. The original software was implemented by Gary Chevsky from his own design. Warthen, Chevsky, Justin Grant, and others built the early AskJeeves.com website around that core engine...
, and Netscape
Netscape
Netscape Communications is a US computer services company, best known for Netscape Navigator, its web browser. When it was an independent company, its headquarters were in Mountain View, California...
. Like www.google.com, these search engines show AdWords ads in response to user searches, but do not affect quality score.
The "Google Display Network" (formerly referred to as the "content network") shows AdWords ads on sites that are not search engines. These content network sites are those that use AdSense
AdSense
Google AdSense which is a program run by Google Inc. allows publishers in the Google Network of content sites to automatically serve text, image, video, and rich media adverts that are targeted to site content and audience. These adverts are administered, sorted, and maintained by Google, and they...
and DoubleClick
DoubleClick
DoubleClick is a subsidiary of Google that develops and provides Internet ad serving services. Its clients include agencies, marketers and publishers who serve customers like Microsoft, General Motors, Coca-Cola, Motorola, L'Oréal, Palm, Inc., Apple Inc., Visa USA, Nike, Carlsberg among others...
, 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 display network are typically much lower than those on the search network and are therefore ignored when calculating an advertiser's quality score.
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 increase performance of their ad units. There are many different types of ads that can run across Google's network, including text ads, image ads (banner ads), mobile text ads, and in-page video ads.
Google AdWords' main competitors are Yahoo! Search Marketing
Yahoo! Search Marketing
Yahoo! Search Marketing is a keyword-based "Pay per click" or "Sponsored search" Internet advertising service provided by Yahoo!.Yahoo began offering this service after acquiring Overture Services, Inc....
and Microsoft adCenter
Microsoft adCenter
Microsoft adCenter , is the division of the Microsoft Network responsible for MSN's advertising services. Microsoft adCenter provides pay per click advertisements. This is a service aimed at people who want to advertise a product...
.
In 2010, Yahoo formed a partnership with Microsoft, giving Microsoft the control over powering the Yahoo search marketing ads. Both accounts are now run through Microsoft AdCenter. When ads are displayed on Yahoo now, it is powered by Microsoft AdCenter and is run through the Microsoft software interface.
AdWords account management
To help clients with the complexity of building and managing AdWords accounts search engine marketingSearch engine marketing
Search engine marketing, , is a form of Internet marketing that seeks to promote websites by increasing their visibility in search engine result pages through the use of paid placement, contextual advertising, and paid inclusion...
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 Center 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.
Google Click-to-Call
Google Click-to-Call was a service provided by GoogleGoogle
Google Inc. is an American multinational public corporation invested in Internet search, cloud computing, and advertising technologies. Google hosts and develops a number of Internet-based services and products, and generates profit primarily from advertising through its AdWords program...
which allows users to call advertisers
Advertising
Advertising is a form of communication used to persuade an audience to take some action with respect to products, ideas, or services. Most commonly, the desired result is to drive consumer behavior with respect to a commercial offering, although political and ideological advertising is also common...
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
Google Maps
Google Maps is a web mapping service application and technology provided by Google, free , that powers many map-based services, including the Google Maps website, Google Ride Finder, Google Transit, and maps embedded on third-party websites via the Google Maps API...
. In the Froyo release of Google's Android operating system, in certain advertisements, there is a very similar functionality, where a user can easily call an advertiser.
History
The original idea was invented by Bill Gross of Idealab who, in turn, borrowed the idea from the model of the Yellow Pages. Google wanted to buy the idea but a deal could not be reached. Not wanting to give up on this form of advertisement, the company launched its own solution, AdWords in 2000. AdWords followed a model that was significantly similar to Bill Gross' creation which led to legal action between the two parties. Eventually the dispute was settled out of court.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. Google's Jumpstart program offers free telephone support from a Google specialist to help users start their online advertising campaign.
In 2005, Google launched the Google Advertising Professional (GAP) Program to certify individuals and companies who 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.
In 2008, Google launched the Google Online Marketing Challenge (http://www.google.com/onlinechallenge/), an in-class academic exercise for tertiary students. Over 8,000 students from 47 countries participated in the 2008 Challenge, over 10,000 students from 58 countries took part in 2009, about 12,000 students in 2010 and almost 15,000 students from 70 countries in 2011. The Challenge runs annually, roughly from January to June. Registration is at the instructor rather than student level.
In 2009, Google revised the AdWords interface, introduced Local Business Ads for Google Maps and Video Ads.
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.Rescuecom Corp. v. Google Inc.
Rescuecom Corp. v. Google Inc. 562 F.3d 123 , was a United States Court of Appeals for the Second Circuit case in which the court held that recommending a trademark for keyword advertising was a commercial use of the trademark, and could constitute trademark infringement...
), fraud (see Goddard v. Google, Inc.
Goddard v. Google, Inc.
Goddard v. Google, Inc., 640 F. Supp. 2d 1193 , is a case in which Jenna Goddard alleged that she and a class of similarly situated individuals were harmed by Google as a result of clicking allegedly fraudulent web-based advertisements for mobile subscription services...
), and click fraud
Click fraud
Click fraud is a type of Internet crime that occurs in pay per click online advertising when a person, automated script or computer program imitates a legitimate user of a web browser clicking on an ad, for the purpose of generating a charge per click without having actual interest in the target...
. In 2006, Google settled a click fraud lawsuit for US$90 million.
Overture Services, Inc.
Yahoo! Search Marketing
Yahoo! Search Marketing is a keyword-based "Pay per click" or "Sponsored search" Internet advertising service provided by Yahoo!.Yahoo began offering this service after acquiring Overture Services, Inc....
sued Google for patent infringement
Patent infringement
Patent infringement is the commission of a prohibited act with respect to a patented invention without permission from the patent holder. Permission may typically be granted in the form of a license. The definition of patent infringement may vary by jurisdiction, but it typically includes using or...
in April 2002 in relation to the AdWords service. Following Yahoo!
Yahoo!
Yahoo! Inc. is an American multinational internet corporation headquartered in Sunnyvale, California, United States. The company is perhaps best known for its web portal, search engine , Yahoo! Directory, Yahoo! Mail, Yahoo! News, Yahoo! Groups, Yahoo! Answers, advertising, online mapping ,...
'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 MySQLMySQL
MySQL officially, but also commonly "My Sequel") is a relational database management system that runs as a server providing multi-user access to a number of databases. It is named after developer Michael Widenius' daughter, My...
database engine. After the system had been launched, management decided to use Oracle
Oracle database
The Oracle Database is an object-relational database management system produced and marketed by Oracle Corporation....
instead. The system became much slower, so eventually it was returned to MySQL http://eldapo.blogspot.com/2007/05/lets-get-real-database.html.
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.
Ad content 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.As of December 2010 Google AdWords has decreased its restrictions over sales of Hard Alcohol. It now allows ads that promote the sale of hard alcohol and liquor. This is an extension of a policy change that was made in December 2008, which permitted ads that promote the branding of hard alcohol and liquor.
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 hackingHacker (computer security)
In computer security and everyday language, a hacker is someone who breaks into computers and computer networks. Hackers may be motivated by a multitude of reasons, including profit, protest, or because of the challenge...
, are not allowed at all. These restrictions may vary by location. From June 2007, Google banned AdWords adverts for student essay writing services, a move which was welcomed by universities.
Google has other restrictions, for example the advertising of a book related to Facebook
Facebook
Facebook is a social networking service and website launched in February 2004, operated and privately owned by Facebook, Inc. , Facebook has more than 800 million active users. Users must register before using the site, after which they may create a personal profile, add other users as...
was restricted from advertising on AdWords because it contained the word "Facebook" in its title — the rationale being that it was prohibited from advertising a book which used a trademarked name in its title.
See also
- AdSenseAdSenseGoogle AdSense which is a program run by Google Inc. allows publishers in the Google Network of content sites to automatically serve text, image, video, and rich media adverts that are targeted to site content and audience. These adverts are administered, sorted, and maintained by Google, and they...
- List of Google tools and services
- Click fraudClick fraudClick fraud is a type of Internet crime that occurs in pay per click online advertising when a person, automated script or computer program imitates a legitimate user of a web browser clicking on an ad, for the purpose of generating a charge per click without having actual interest in the target...
- Search engine marketingSearch engine marketingSearch engine marketing, , is a form of Internet marketing that seeks to promote websites by increasing their visibility in search engine result pages through the use of paid placement, contextual advertising, and paid inclusion...
- Central ad server
- Performance-based advertisingPerformance-based advertisingWith performance-based advertising, the advertiser pays only for measurable results.With other forms of advertising they pay regardless of results....
- Search analyticsSearch AnalyticsSearch analytics is the analysis and aggregation of search engine statistics for use in search engine marketing and search engine optimization . In other words, search analytics helps website owners understand and improve their performance on search engines...