Have you heard about Google AdWords?

OK, this time I'm going to explain a bit about it.

First of all, you know as well that Google is still the #1 Search Engine in the net, leaving Overture at the second place. If you type a word or a phrase in Google's search box and press "enter", a large number of links will appear in front of you, related to the subject you've typed earlier.

Take a look at the right hand side of the main page. There should be another group of links complete with their descriptions, right? Only, these ones are much smaller than those main link results. What is the difference?

Do you see the subtitle.. Sponsored Links..? Those link results on the right hand side is called Google AdWords. People bid a certain price to Google to put their links on there everytime visitors search for related keywords. Those advertisers are only paying for the numbers of click-throughs to their links. This kind of advertising is called the Pay Per Click (PPC) advertising.

In order to reach a higher position in the link results, Google has set up a unique formula. Let's say you want to put your link in Google AdWords and you bid for "flowers" as your main keyword. You are not the only one who bid for that keyword. There are lots of people who also bid for it, since they also want to promote their "flowers" sites!

The unique formula of Google AdWords is that you can't reach the #1 position only by increasing your bidding price. Google also considers your Click Through Rate (CTR). CTR is a value that represents how many click-throughs (clicks on your ad) you get among your ad's impressions. Too many difficult words..?

OK, let's try it this way... Impressions is the frequency of your ad's appearance in the search engine's result page. If your ad appears 500 times, than your ad's impression is 500. But, of course you don't get a click everytime your ad shows up. From those 500 impressions, perhaps you only get 1 click. This makes your CTR = 1/500 = 0.002 = 0.2%

The better the CTR you have for an ad, the lower you have to bid for the same position.

That means, Google also rewards the good content of your ad. When your ad gets a lot of click-throughs, that means you have a good ad and Google rewards you for that! Your ad is good according to Google if your ad is relevant with the content of your site.

In Google AdWords, the rich ones don't always win... the smart ones do!

Of course there are still a lot of things we haven't touch regarding Google AdWords, but we have to do it later. After all, this is a quick overview for beginners, right?

Copyright 2005 Farid Aziz.