Google adds pay-per-click AdWords

(Feb 20 2002) Google has for quite some time offered so-called AdWords, which are basically colored text ad boxes put in the column to the right of the regular search results.

Unlike Overture's search results (which you find on nearly all of the major search sites), the Google text ads have so far been based on a cost-per-view and not on a cost-per-click model.

However, Google is now challenging Overture in its core area, and a mighty challenge it is, indeed. Google is after all one of the most popular search sites on the Web, and as search engine marketing experts can tell you, it brings in a lot of visitors.

Moreover, Google has started syndicating AdWords to other search sites and portals that use Google search results (like Earthlink and Sympatico), making Google a de facto competitor in the pay-per-click market.

"Millions of users around the world rely on Google's objective search results to find the information they need," says Omid Kordestani, Google's senior vice president of worldwide sales and business development.

"AdWords Select brings the same quality and relevancy to Google's sponsored links that our users have come to expect from our non-commercial search results. This combination of unbiased and commercial results provides an even more valuable search experience for our users."

AdWords Select

In the new AdWords Select system, you only pay when a customer clicks on your ad, regardless of how many times it is shown. This, of course, applies to all pay-per-click search engines.

Google has added a nice detail, though. The AdWords discounter sees to it that you never pay more than necessary to get the position you want.

You can set the same maximum cost-per-click for all keywords, and the AdWords discounter will charge you the lowest cost-per-click necessary to maintain your position for each keyword.

This will save webmasters a lot of time keeping track of their bids and listings. Moreover, Google will automatically disable any keywords with less than 0.5% click-through rates.

The amount you bid is not the only factor determining your position in the list of text ads. "Your click-through rate and CPC together determine where your ads are shown," Google says. "So better ads rise to the top. That means no one can lock you out of the top position."

This is an incentive that forces advertisers to add relevant ads and to write ad copy targeting the interests of the searcher. If an ad is irrelevant to users, they will not click on it and it will move down the page. Cost-per-click times click-through rate (i.e. the percentage of times your ad is clicked on by users) gives you the position of your ad.

Google obviously trust this systems so much that they do not control the ad before publishing it. Once your account is created, it appear within minutes.

Furthermore, you may add many ads to the same search keyword phrase. In this way you may more easily determine what ad copy works best. These ads will rotate. You can set a maximum price for this particular group of keywords or create many different Ad Groups, each at a different price.

Another strength of this program compared to others is the possibility to target specific countries or languages. Not only does the advertiser save money this way, the ads will also be more relevant to the searcher.

The new program has been received favorably by the SEO community, although some webmasters complain about high prices. The minimum cost-per-click is 5 cents, but in order to be listed you often have to pay much more. This means that webmasters have to keep a close eye on the conversion rate (i.e. how many visitors buy a product or become a returning visitor).

Google is one of the Web's few profitable search companies. This new offer certainly won't hurt that position. The question now, of course, is whether they will go public.

Google AdWords FAQ

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