Google AdWords Select
Search Engine CPC Cost Per Click Programs

Article Originally Posted 2002 October 04,
Revised 2006 May 12,
by Gord Collins - Bay Street Search Engine Optimization | Toronto, Ontario | Canada

The increasingly popular Google search engine introduced a cost per click (CPC) program called AdWords that is just a cut above the rest. This is not the usual "highest bidder wins scenario". They differentiated their service by adding a quality element. It means that those ads that receive a higher click through rate get a slight reduction in price. Some of my own ads produced a good reduction in cost so persuasive writing does make a difference.

Google's CPC program is complicated, even troublesome at times. However, it does have an automated feature called AdWords Discounter, that allows you to let them manage the bid price at a competitive level. Some of the more general and well used keyword phrases have a set minimum bid which makes some phrases very unattractive. That's why you won't see ads on Google for certain keyword phrases. It's just too expensive given the type of sales transaction that results from clicks on that phrase. The word free can sometimes be very expensive on Google AdWords.

To make matters worse, there are popular, general phrases that are less targeted. This means they develop less qualified visitors and thus a poorer sales conversion rate. Google's broad matching system means wide varieties of buyers are competing for the same phrases, even though they are selling completely different products or services.

This often results in bidding wars and demonstrates why you need to use a systematic testing approach is necessary for AdWords to perform well for you. If you don't have a system for discovering the best quality keyword phrases for you, you'll be spending a lot more money. On a large campaign it is essential to quickly discover what makes people click. Another reason is click fraud. There are estimates that 20% of all click-throughs are fraudulent, so expect 20% of your budget disappearing.

The AdWords Advantage

Google has the largest audience and their users spend much more time at Google than searchers do at other search engines comparatively. Google sets an example for choice, and users take this seriously by looking for better value. Google is available in many languages, giving you an opportunity to advertise to French, German and Spanish markets. It also has geo-targeting with up to 99% accuracy. My campaigns have shown Google produced about 80% more visits than the same expenditure on Overture.

Google has stated their click-through rates are 5 times higher than the industry standard. They serve ads to Earthlink, Ask Jeeves, Business.com, and AOL. Google's AdSense network additionally offers exposure on millions of web sites. If wide reach is what you need, you can choose to show your ads on this network.

So, total market exposure through AdWords could be very high. Your bids have to be among the top four in order to get listed on AOL. Up to ten ads may be shown on Google with ad placement at the top of the screen and downward along the upper right of the page in pink or green text boxes.

The Google AdWords Bid System and Guidelines

AdWord's bid prices and click through costs are not synonymous. That's because your bid could be on a variety of phrases and because their discounting system attempts to keep bid spreads from getting too large. Your specified maximum bid of $3.99 per click may actually result an average of only $2.65 per click instead.

Ads can contain 25 characters for the title, 70 characters for the ad text, and 35 characters for a display URI. America Online shows the title and ad text all on one line. You can view Google AdWords specific guidelines here...

• https://adwords.google.com/select/guidelines.html

The AdWords Program Interface

After you've opened your AdWords account, you'll be greeted with a screen where you'll name your campaigns and be able to create an ad. You'll fill the various fields that create the body of your ad on the left side. After this is completed, you move onto the next screen where you choose your keyword phrase to bid on. The keyword suggestion tool is there if you need it.

Finally, you input your bid, push the calculate button to see your average click costs. If your average position is too low, you can up your bid. Try to get up to 3rd or 4th position to ensure you get into the AOL listings. It's a little complicated, but basically, your rank is determined through this formula: CPC (your bid) x CTR% = Rank. Your bid is set only one penny above your nearest competitor when set at maximum.

Pay Per Click and Cost Per Click Services

1. PPC Pay Per Click Advertising Programs
2. Google AdWords Select Cost Per Click
3. Google AdWords Tips
4. Overture Pay Per Click
5. Other PPC Advertising Resources