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With the recent ‘Florida’ update on google & its impact on

the SERPs, typically on the commercial search phrases, it

has become imperative that we now examine paid advertising

scenario at google. For scores of merchants, now paid

advertising will be the only way to help them salvage their

holiday sales, as also future revenues. This will be a two

parts article, with the first part focusing on the google

paid advertising space & the second part on the best

practices thereof. However, before we start on googles

adwords & adsense programs a word or two on online

advertising industry performance in 2003.

Online Advertising Industry:

According to the Interactive Advertising Bureau (IAB), the

online advertising industry sales have been robust this

year with three consecutive quarters of growth witnessed

for the first time in last two years. Lets first look at

the yearly sales figures for last three years. Online

advertising climaxed in 2000 with $8 billion in revenue

(dot com boom) before declining to $7.1 billion in 2001,

and $6 billion in 2002. This year in the first three

quarters, the sales have been estimated at a healthy 5.07

billion (up 13% from the same period last year). The break

up of the quarterly sales figure is as under:

The first quarter sales have been at 1.63BUSD

Second quarter is pegged to have clocked 1.69 billion (up

14% from same quarter last year)

Third quarter is estimated to have done 1.75billion.( 20%

growth from this quarter last year)

From figures the emerging pattern is towards keyword based

text ads gaining popularity.

According to IAB, out of the 6bUSD figure of 2002, 15.4%

(or roughly 1 billion) can be attributed to Search term

related sales. This is up 200% from the figures of 2001.

The contribution of search term related ads has been

estimated to 31% of the second quarter figures. No break up

for third quarter figures is however available. Financial

firm Salomon Smith Barney expects the estimated $1.4

billion market in 2003, to grow 30 percent to 35 percent

per year, reaching $5 billion by 2008.

This Advertising space is dominated by two major players

(obviously): Google & Overture.

Google Adwords

Google has two services for its paid advertisers. Adwords &

Adsense. Lets start with Adwords.

This is a program run by Google in which it lets the

advertisers bid for a chunk of the real estate on the

search engine results page related to specific queries. The

ads appear as “sponsored listings/premium listings” next to

the organic search results. Along with getting exposure at

the googles own site, these ads are also syndicated at

Google’s partner sites like: America Online, Inc.,Ask

Jeeves ,AT&T Worldnet ,CompuServe ,EarthLink, Inc.

,Netscape ,Sympatico Inc. etc.

Currently, Google is supposed to have approx 150,000

monthly advertisers for its paid placement services.

Adwords Account Statistics:

Following are the statistics for every adword account

google has; One can set up 25 campaigns in every account.

Each campaign can have up to 100 adgroups in it; with each

adgroup capable of having up to 750 Keywords in it. The

overall limit on any account is 2000 keywords.

Adwords offers four kinds of Keyphrse matching namely:

Broad, Phrase,Exact & Negative. Recently, Google has

introduced expanded matching for its broad matches. More on

this later.

It lets you target your ads to specifically 14 languages,

250 countries or 200 states /regions in US. Google claims

99% accuracy for its IP tracking system to deliver the ad

effectively to the target audience.

Recent Features on Adwords:

Google has added three new features to its adwords campaign

in October. Those are:

Conversion Tracking

Expanded Matching

Increased Click Through Threshold

Conversion Tracking:

Google has introduced a conversion tracking feature for its

advertisers, wherein they can now track the conversions

resulting from their advertisement traffic. This conversion

tracking helps the advertisers by quantifying the ROI they

are achieving with their campaigns.

This feature works by introducing a cookie on the user

computer whenever someone clicks on an advertisement. This

cookie is connected to the conversion page if the user

reaches there. If it is matched, google records a

successful conversion.

Expanded Matching:

As a part of its broad matching of keywords, Google has

introduced a ’smart’ feature called expanded matching. With

expanded matching, AdWords system automatically runs ads on

highly relevant keywords, including synonyms, related

phrases, misspellings and plurals, even if they aren’t in

the original list of keywords that you submitted with

google.

For example if you keyword is ’software development’,

google system will try & guess alternate searches to

display your ads on. Some examples are ’software solutions’

or ’software services’ or ‘technical solutions’. Over time,

it will monitor the click through rates (CTR) for these

searches & ‘learn’ the relevance of these searches for you.

This will help it make expanded searches more specific.

Also, based on its mining the search queries, it will be

able to develop fresh combination of search terms which

will be relevant to the business.

In an effort to let you know what are the keywords it will

look to broaden your exposure to, google has for the first

time put out a Adwords keyword suggestion tool:

https://adwords.google.com/select/main?cmd=KeywordSandbox

This tool highlights the googles view of what other terms,

it ‘understands’ to be relating to your business. (Tip

:This tool works well for broad searches.)

This theme based adwords tuning, is in sync with googles

trend of trying to understand ‘available content’ & ‘user

queries’ & make ‘intelligent matching’ of the two.

Increased Click Through Threshold

The increased click-through threshold is designed to help

ads that may have struggled for traffic due to poor search

relevance. These include those related to contextual ads as

well.

Now for evaluating the Account performance evaluates each

account after every 1,000 ad impressions. If the CTR for

the account falls below a minimum required CTR (which

varies by ad position, geography etc but is 0.5% for the

top spot and slightly reduced for each subsequent position)

the ads will only be displayed occasionally for under

performing keywords.

Google Adsense:

Google AdSense is an offshoot of the Google Content-

Targeted Advertising program that was launched in early

March 2003.

This early program let large websites integrate Google

AdWords into their websites. Each deal was independently

negotiated with Google, and sites with less than 20 million

page views couldn’t participate.

The Google AdSense program democratizes the content based

text ad display process. Even small merchants,bloggers with

only a few thousand page views per month, can now apply to

the AdSense program.

The AdSense program allows Web publishers to apply for the

program online. After Google vets a site for popularity and

quality — a process the company estimates will take two to

three days — accepted applicants download a string of HTML

code to insert on Web pages on which they wish to carry

text-link ads.

Google draws the listings from its base of 150,000

advertisers, using its algorithmic search technology to

scan the content page and match it up with relevant links

that are displayed as either skyscraper ads on the right

side of the page or banners at the top.

Some of the large Googles partner networks are

:HowStuffWorks ,Mac Publishing (includes Macworld.com,

MacCentral, JavaWorld, LinuxWorld ,New York Post Online

Edition ,Reed Business Information (includes Variety.com

and Manufacturing.net) ,U.S.News & World Report online.

All the rules that apply to adwords listings also apply to

Adsense in respect of CTR, Positioning etc.