Understanding the Google Adwords Program

If you’re just starting out with internet marketing, you’re probably curious about the Sponsored Links listed on the right-hand sidebar as well as across the top of Google search results.  In both cases, there are a series of ads listed and you can be among them if you’re willing for the placement.  The program is called Adwords and Google remains the market leader with this type of online advertising.

It’s important to understand that Google isn’t the only company providing such advertising opportunities.  Yahoo does the same thing and so do a variety of other search engines.  These programs are referred to as pay-per-click advertising because the advertiser only incurs a charge when someone actually clicks on their advertisement.  In other words, the advertiser only pays when someone has actually visited their website.  In effect, you’re paying for visitors.

It’s also important to understand that the primary search results listed in the left center portion of the search results page are NOT paid for positions.  Today’s search engines go through a lot of trouble ensuring the results they provide are the best possible resources given the search criteria entered by the user.  Companies like Google use complicated algorithms to assess the value of different website pages and their search results reflect those assessments.

Having said all that, the ads listed in the Sponsored Links section are paid for and anyone can have their ad show up on the first page of a search result if they’re willing to pay enough for it.  You see, the amount you pay is determined by an auction-style process where everyone looking to purchase a particular keyword bids on the price.  If more people are looking for the same word you’re looking for, the price will be higher.  If fewer people are looking for the same word you want, the price will be lower.

The interesting thing is that you don’t have to buy a single word.  You can buy an entire phrase.  And by doing so, you end up paying a lower price because there less competition for word phrases than for single words, and the people entering a word phrase as their search criteria are usually closer to a purchase decision anyways.  If they’re entering multiple words, they obviously know exactly what they want and those are precisely the people you want.  So by purchasing word phrases, you end up paying less for better leads.

The argument against buying word phrases is that you immediately eliminate a large percentage of the people who might enter the single word.  It’s indeed true that someone purchasing a single word to activate their ad will get a lot more traffic than someone purchasing a word phrase.  But again, the increased traffic will be less likely to buy anything and each click will cost you more.

The thing to do if you’re looking to get more traffic is to buy many different word phrases, each slightly different.  Google even has a free keyword tool that will provide a long list of related searches for any individual phrase you enter.  The tool will even tell you how often the different word phrases are entered by Google users as well as the competition for each phrase by other Adwords advertisers.

The world of pay-per-click advertising can be complicated at first.  But once you understand how the system works, you can quickly and easily purchase a series of low-competition word phrases and get visitors to your website at a low cost.  Go setup an account with Google Adwords.  It’s free.  Even if you never use it, your account will give you access to some great tools for process better than all your competitors.