Google Adwords has permanently changed the advertising landscape. Prior to 1990, business owners were often heard to remark that only half their advertising worked; they just didn’t know which half. For decades, business owners spent advertising dollars on print Yellow Pages, newspaper display ads, classifieds, radio, and T.V.. Such advertising was expensive and unpredictable; one was never quite sure where the customer came from.
All that changed with the advent of Google Adwords. Adwords enables an advertiser to develop a short, clickable text ad which is placed by Google onto a network of websites whose content relates to the product or service the business is promoting. The advertiser pays nothing for the ad placement unless a site visitor clicks on the ad.
The benefits that Google Adwords provides in comparison to traditional forms of advertising are overwhelming. For starters, the site visitor is at the site looking for information similar to what the advertiser is providing. This enables the advertiser to target prospects at the very moment they’re thinking about buying those products or services. Also, there is no longer any guesswork about where the customer came from, because Google provides that information to the advertiser. The advertiser pays only for interested browsers who click on their ad. Such advertising is called Pay Per Click, or PPC.
Advertising prices are based on the value of the keywords used in a campaign. Keyword values are determined by competitive bidding; the more people who are interested in a particular keyword, the higher the price for that keyword goes. Keywords that are very popular are also very expensive. But, this enables an advertiser to buy their way onto first page placement on Google without having to rely on organic search results. Advertisers with big budgets can become an overnight success by dominating the Google Adwords placements.
In setting up a Google Adwords account, an advertiser indicates the maximum amount they are willing to spend per click and also the maximum amount they are willing to spend per month. Google will predict what sort of placement a certain budget will generate so that the advertiser knows what to expect from their campaign before they commit.
Of course, a website publisher can also be on the receiving end of those Google Adwords dollars. If you own a website, you can set up a Google Adsense account and become part of their network of publishers. Google will provide you with html code for your site. Simply choose the “insert html” button on your site builder, copy and paste the html code, and move the text box wherever you want it on the page. Google will scan the content on your page, and provide relevant Adword ads for your page. When visitors come and read your content, if there is an Adwords ad that appeals to them, they can click the ad and be taken to the advertiser’s site. When they click the ad, you get a percentage of the advertising fee.
Sites with outstanding content and lots of traffic can generate a modest passive income through the Google Adsense program. It is important to study the details of the program before signing up, though. Google monitors the program closely, and it is important to realize that the penalties for trying to scam the system are severe.
source: helium.com