AdWords

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, ads for relevant words are shown as "sponsored link" on the right side of the screen, and sometimes above the main search results.

The ordering of the paid listings depends on other advertisers' bids (thus the system is classified as P4P) and the "quality score" of all ads shown for a given search. The quality score is calculated by historical click-through rates and the relevance of an advertiser's ad text, keyword, and landing page to the search, as determined by Google. The quality score is also used by Google to set the minimum bids for an advertiser's keywords.

The auction mechanism that determines the order of the ads has been called a "generalized second price" auction. It is a variation of the Vickrey auction.

Site targeted advertisements

In 2005 Google introduced site-targeted advertising. Using the AdWords control panel, advertisers can enter keywords of interest, and Google will recommend relevant sites within their content network. Advertisers then bid on a cost per mille (CPM) basis for placement.

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. Google automatically determines the subject of the pages and displays ads for which the advertiser has specified an interest in that subject. The ads show in boxes resembling banner ads, with the designation "Ads By Gooooooooooogle." These content network sites are those that use AdSense, the other side of the Google advertising model. 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.

AdWords is used by publishers who wish to bring traffic to their websites. The biggest competitors are Yahoo! Search Marketing (formerly Overture) and Microsoft adCenter.

Click-to-Call

Google Click-to-Call is a service provided by Google which allows users to call advertising from Google search results pages.

All calls are free at Google's expense. However, if the call is made to a mobile phone, the caller may incur airtime fees depending on the mobile phone plan and the location of the caller and the advertiser (if they are in different countries at the time of the call, the call will probably cost more).

History

The AdWords product was launched in 2000.[2] At first advertisers would pay a monthly amount, and Google would 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. As of 2005, Google provides a campaign management service called Jumpstart [3] to assist advertisers in setting up their campaigns.

In 2005, Google launched a 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, many advertisers choose to hire a consultant to manage their campaigns.

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