The concept behind AdWords

Today in the face of competition, businesses and individuals are looking at Google adwords or Yahoo adwords as the one strategy that will help them to remain ahead. It is easy to purchase adwords ads and anyone from businesses to entrepreneurs can do that. In adwords there are specifications on the type of business, the amount of promotional budget, or amount of revenue. All you need is a website. It is not necessary that you have website that sells products only or services only.

 

Adwords is a highly powerful weapon that can not only create visibility but also bring in revenue and build client loyalty. Visibility, revenue and client loyalty are all inter-linked and a part of the bigger revenue model. If you are thinking of marketing your website using the adwords campaign then you need to understand the concept first. A successful adword campaign consists of four major steps and they are:

1. You need to sign up with a service provider like Google, Yahoo or MSN for an AdWords account. You can create this account even before you finalize your budget or before you have created any advertisement. You can always activate your advertisements later.

1. You need to create an advertisement. These advertisements are quite unlike the banner ads that you see on various websites. These ads are in textual form minus the graphics and have a link to your website.

1. Research and choose keywords that will be inserted in your ad.

1. Lastly, you need to put a price for your ad and also take a decision on the overall adword budget.

Google adwords is a success story. When the Google top ten search page opens, you will find on right hand side, a couple of ads with hotlinks. These advertisements are adword campaigns. You have to assign a cost per click-through. Everytime someone clicks on your advertisement, Google gets paid and successful ads are placed higher on the page while the cost on the click-through gets reduced. Your success will be measured through the click-through rate. The click-through rate stands for the number of click-through each ad will attract as compared to its display rate.

 

If your ads have a high click-through rate then Google will reward you by lowering the effective CPC price that was assigned to your ad. This also means that your ad will be placed higher than the ad paying a higher CPC rate. The placement of the advertisement is dependent on a combination of the CPC price and click-through rate, although Google has never really shared its formula.

 

The only drawback is that if your ad doesn’t generate a certain number of click-throughs, which is normally 1% for new advertisers, then Google will reduce the rate at which it is being displayed. If you advertisement goes into the reduced circulation phase then you will get a notice from Google. At this moment Google will also provide you with tips and tools to improve your click-through rate. If your ads are pushed aside by Google three times then you will be required to pay $5.00 fee for reactivation.