How To Understand Google AdWords

Google AdWords is probably today’s leading pay per click program on the web. If you learn how to use it right, your online profits can raise skyhigh. This article aims to give you a quick starting point in using pay per click advertising.

Pay per click (PPC) programs are the easiest way to advertise your business online. Done right, it’s deadly effective, too. Let’s see how it works.

What is PPC?

PPC is an advertising system by which you lead targeted audience to your website, through a search engine. For each click on one of your ads you have to pay a certain amount of money to the search engine. This sum is called cost per click (CPC).

On most search engines CPC varies with your position. In case you want to rank higher, you bid more money. Few search engines have fixed CPC — such as LookSmart — that charges 15 cents per click.

PPC is an alternative to SEO (optimizing your site for better search engine listings). With PPC:

you get listed instantly
you have great control over your listing position
you can get listed for all the keywords you want

How PPC works

PPC advertising works on simple principles:

Build a list of keywords.
Write some ads for every class of keywords.
Bid for your position on each keyword.
When people make searches using your keywords, the search engine displays your ad on the results page.
Some people click on your ad (you pay for those clicks).
Some of those people buy your product/service

The big players

Google AdWords and Yahoo’s Overture (the early GoTo.com — first PPC search engine ever) are the largest pay per click programs on the market. There are also smaller players such as:

FindWhat.com
Kanoodle.com
Enhance.com
ePilot.com
goClick.com
Search123.com
7Search.com
SearchFeed.com
LookSmart.com

Google AdWords vs. Overture (a.k.a Yahoo Marketing)

We’re not going to tell you who beats who. Let’s just analyze the data in the following comparison table:

	AdWords	Overture
Minimum monthly spend	no min.	$20
Initial deposit to open an account	$5	$50
Account set-up	Instant. Your ad appears online within minutes	3 to 5 working days
Ranking	Depends on CPC and CTR (relevance)	Depends on CPC
Change campaign details	Unlimited changes in effect within minutes.	Changes must be approved first. It may take a few hours to run them online.

Which one is best for you? We’d say AdWords because it has worked better for us, but we think you should try them both. Overture has steadier rules than AdWords, and it’s easier to learn. On the other hand, the bidding prices are higher, and it does not reward you for relevance. But you may have the surprise to convert better for certain keywords, though. In this case, why say no?

AdWords benefits

Here’s what makes AdWords special:

Your advertising is HIGHLY TARGETED. You choose the exact keywords that your ad displays for and also the keywords that your ad doesn’t display for.
You are urged to produce RELEVANT ads. Relevance leads to click-throughs. The more click-throughs your ad generates, the higher it ranks. That means more targeted visitors (and more customers) at the same cost.
YOU control the COST. AdWords campaigns are 100% under your control. You decide how much you can afford to pay for each click (the maximum bid), and how much to spend overall (daily budget).
AdWords MINIMIZES your costs automatically. Suppose you set “blue gadgets” as a keyword and bid $0.10 per click, but there’s no one bidding on this keyword. In this case, AdWords charges you only $0.05 the click (that is the minimum bid).
You REACH more people. According to Media Metrix (December 2003), with Google AdWords you gain access to as much as 80% of Internet users
You can CHANGE anything, at any time: there’s no timing and no limit for changes.
You benefit from state-of-the-art GEOGRAPHICAL and LANGUAGE TARGETING options

Taking advantage of all these benefits requires that you take some time and learn how to properly use them.

Tip: If you’re an AdWords beginner, you should subscribe to : Perry Marshall’s 5-day email course. This is an easy, frustration-free starting point offered by the renowed “Pay-per-click Guy”. And it’s free, too.

But before getting to the starting line, there are some things to take care of.