Google Adwords
5.12.07
Two lessons about Google Adwords.
Gilkatho was an early adopter of the Google Adwords technology that displays relevant advertisements next to search results. It was real case study material to watch how Google followed the "build it and they will come" strategy. The first years of their company's development was all about growing the effectiveness of their search results. The founders were more interested in the technology than the money. It was only after they had the commanding market position in the search engines that they introduced advertising. Google did advertising differently though. In their usual low key way, they were better at targetting adverts to the search users. That meant two things:
1. The searchers were happier as they got the most relevant search results and the most relevant adverts
2. The advertisers were happiest as they only advertised to the right buyers thereby reducing advertising costs while getting better return on investment.
With our web analytics we were soon able to track our conversation costs of a Google referred web visitors compared to say the pathetic results from Yellow Pages online. Today people search in search engines not directories.
One expected side effect of the success of Google has been the increased costs of the pay-per-click advertising. As more people see the success of Google Adwords, more people use it. More people bidding for the ad space means higher prices. Adwords was probably incorrectly prices at the start...offering excellent value for a very low price. The built-in protections of the bidding system means you know you will always be paying the market price. Got a niche product with few advertisers? Google is cheap. Enter the fiercely competitive world of coffee and the prices are going sky high.
Now, why this insight? Did you know that one of the least successful ranking positions is the Number 1 Adwords position? The visitors are less profitable and more likely to spend less time on your site. They aren't reading the search results, just clicking on the first placing. The visitors who choose carefully from the advertisers, spend more time on the chosen website, visit more pages and are more likely to convert to a sale.
The first lesson, to get the best value from Adwords, bid to be in the top 2-4 places, reduce your costs and maximise the sales return....we do.
And the second lesson...buy GOOG shares....I did.
Gilkatho was an early adopter of the Google Adwords technology that displays relevant advertisements next to search results. It was real case study material to watch how Google followed the "build it and they will come" strategy. The first years of their company's development was all about growing the effectiveness of their search results. The founders were more interested in the technology than the money. It was only after they had the commanding market position in the search engines that they introduced advertising. Google did advertising differently though. In their usual low key way, they were better at targetting adverts to the search users. That meant two things:
1. The searchers were happier as they got the most relevant search results and the most relevant adverts
2. The advertisers were happiest as they only advertised to the right buyers thereby reducing advertising costs while getting better return on investment.
With our web analytics we were soon able to track our conversation costs of a Google referred web visitors compared to say the pathetic results from Yellow Pages online. Today people search in search engines not directories.
One expected side effect of the success of Google has been the increased costs of the pay-per-click advertising. As more people see the success of Google Adwords, more people use it. More people bidding for the ad space means higher prices. Adwords was probably incorrectly prices at the start...offering excellent value for a very low price. The built-in protections of the bidding system means you know you will always be paying the market price. Got a niche product with few advertisers? Google is cheap. Enter the fiercely competitive world of coffee and the prices are going sky high.
Now, why this insight? Did you know that one of the least successful ranking positions is the Number 1 Adwords position? The visitors are less profitable and more likely to spend less time on your site. They aren't reading the search results, just clicking on the first placing. The visitors who choose carefully from the advertisers, spend more time on the chosen website, visit more pages and are more likely to convert to a sale.
The first lesson, to get the best value from Adwords, bid to be in the top 2-4 places, reduce your costs and maximise the sales return....we do.
And the second lesson...buy GOOG shares....I did.
posted by Wayne Fowler | 4:38 PM
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