AdWords is Google’s flagship advertising product and main source of revenue. AdWords offers pay-per-click (PPC) advertising, and site-targeted advertising for both text and banner ads. The AdWords program consists of local, national, and international distribution. Google’s text advertisements are short and contain one title line and two content text lines whereas Image ads can be one of several different Interactive Advertising Bureau (IAB) standard sizes. Main competitors of Google AdWords are Yahoo! Search Marketing and Microsoft adCenter. 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 or the relevant local/national google server ads for relevant words are shown as “sponsored links” on the right side of the screen, and sometimes above the main search results. These ads are also known as creatives by Google.
The ordering of the paid-for listings depends on other advertiser’s bids and the “quality score” of all ads shown for a given search. The quality score is calculated by historical click-through rates, relevance of an advertiser’s ad text and keywords, an advertiser’s account history, and other relevance factors as determined by Google. The quality score is also used by Google to set the minimum bids for an advertiser’s keywords. The minimum bid reflects on the quality of the landing page also, which includes the relevancy and originality of content, navigability, and transparency into the nature of the business.
All AdWords ads are eligible to be shown on www.google.com. Another option available for advertisers is 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. These content network sites are those that use AdSense, the other side of the Google advertising model. AdSense is used by website owners who want to earn money by displaying ads on their websites.