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AdWords 101

July 5, 2011

Happy Independence day – July 4th, 2011 to all. In one of my last posts – where I explained how you can generate traffic to your site by not paying the search engines like Google etc. In this post I will explain how to maximize your $ spend when advertising on Google AdWords.

With pizza and beer as dinner I started playing with Google adwords trying to understand what it is and how can it help me. So far this adword campaign was being managed by one of my colleague and I just wanted to give it a shot. Before getting onto the specifics let me give you some numbers

As of March 5 2011, Google is processing 1,000,000,000 searches per day. Assuming 80% market share by Google and rest by other search engines we are looking at other 250,000,000 searches per day. As per the latest 10Q filings by Google 97% of its revenues ending in Mar 2011 is from advertising. Google has two main products – Google AdWords: auction-based advertising program that enables advertisers to place text-based and display ads on our websites and our Google Network Members’ websites. Google AdSense refers to the online programs through which we distribute our advertisers’ AdWords ads for display on the websites of our Google Network Members, as well as programs to deliver ads on television. (these definitions are from the 10Q filings)

As stated earlier I started my evening with a slice of Pizza from Pizza Hut and a chilled beer and started going through the AdWords site. This is the first picture I have seen

AdWords 101

I was amazed looking the numbers – so my ad was shown to different users around 90,000 times but I paid only $81.44. This is a true pay as you use kind of a model where advertisers like me pay only when Google generates traffic to my site and this is called the cost per click advertising. As you can see the avg. CPC (cost per click) is $0.84 and there is option for me to opt for cost per impression i.e. need to pay on 90,000 impressions that I got (obviously at a very low rate).

Key Words – What are they?

Key Words are those phrases that users type in to search for what they are looking for. This is the critical component of this business model – so I have to choose very specific words/phrases that my users might be using when searching for related products – in this case coupons. Note that these key words are supposed to be dynamic and one has to constantly look for them.


Once the key words are decided create a campaign that you want to run a campaign – these are the ads that are showed on the sides and at the top when users search for some relevant stuff. Again this is based on the relevancy of the key words which we talked above.


With Google AdWords one can customize up to nth degree – I could barely scratch the surface of how to manage the AdWords campaign. See below another screen of different options

One can choose which networks to expose one’s ad to, what kind of audience you would like to target and how Ad Words can be integrated with other Google products like Google Places etc. I will post some more learnings and my personal experiences as we go along.

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