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What is Adwords?

Before answering this specific question, let's start with what search engine marketing is. Put simply, and the term is pretty much self-explanatory, it is using search engines to promote (also known as advertising and marketing) your business. Since search engine marketing is so long to type, you will more likely see its abbreviation, SEM. When spoken, each letter in SEM is pronounced individually and not as a word that sounds like "same".

Also, don't confuse SEM with affiliate marketing, which is something totally different. Affiliate marketing is simply promoting other people's products (referring those products) in exchange for a commission when those referrals buy the product. Most affiliate marketers make use of SEM to promote those products or generate traffic to their site.

Why use search engines? Since most people find web sites by going to search engines first, unless they already know where they want to go (they know the site), it makes perfect sense to use and leverage search engines traffic to help people find your site.

SEM is the umbrella term for the activities in marketing your site on the Internet. There are in fact two main activities in doing this. One is search engine optimization. SEO is simply trying to get the search engines to rank a page as high as possible for particular keywords. Keywords are the terms people type in search engines when looking for sites. When typing in "golden bird cage", they naturally expect to be shown results, a list of sites related to that subject.

Since people click more often on sites that appear high in the results, it makes sense to try to rank there. In fact, marketers use terms such as "ranking on the first page", the first page understood as the top ten results returned by the search engines, since most show ten results per page. You will also hear the terms organic rankings or natural rankings when talking about the results of SEO efforts.

SEO is seen as being free since you don't pay to be ranked. The truth of course is that counting your time and efforts to be ranked well means there is a cost involved with SEO activities. Some site owners hire SEO specialists and the monetary cost can be in the hundreds and thousands for just one page over the life of that page.

It is important to note that pages are optimized individually, not sites, and that SEO activities can take months before producing the desired results. There are also two distinct activities within SEO itself, on-page and off-page optimization which is simply getting other sites to link to yours or placing those links on other sites yourself such as in your signature when commenting in a forum. Many people call these backlinks.

The second major activity of SEM is pay-per-click advertising, or simply PPC. All major search engines have a self-serve PPC program where advertisers create ads and select the keywords they would like their ads to be triggered on. These ads are commonly called the sponsored results. Only when someone clicks on the ad is the advertiser charged. The amount depends on what you and competitors are willing to pay for the keyword. It can never be higher than the maximum you specify. In fact, you can bid a very high amount and pay much less, say bidding $10 and paying only $1.

Each search engine calculates this amount differently but most follow a Vickrey-style auction where the winning bid pays the amount of the next highest bid. In this type of auction, the winner may have bid $100 with the next lowest bid at $90, so the winner pays only $90. In pay-per-click auctions, the advertiser typically pays one cent more than the bid placed by the advertiser below him.

The position the ad is shown among other advertisers also depends on the search engine. Some are straight auctions where the highest bidder gets the top position and so on all the way to the last ad. Others, like Google, have systems taking into account the ad's click rate as a measure of quality. In fact all major search engines are now following Google's lead and reward the positioning of ads based on bid and click rate. How they do so depends on each engine's exact formula but the basic principle is the same.

Now the answer to the question, what is Adwords? Adwords is simply the name Google chose for its PPC advertising program. Yahoo has one called YSM for Yahoo Search Marketing and MSN (now Bing) also has one called Adcenter. There are literally dozens of other PPC programs offered by search engines, as well as social sites such as Facebook, but these are the "Big Three" as they command 90% or more of the search engine market.

Adwords should not be confused with Adsense. Adwords is for advertisers. Adsense is for publishers, the program where you, as a site owner, can display Adwords ads on your site. In return, Google pays you a portion of advertising revenues generated from your site.

In short, Adwords and all other PPC programs are a form of advertising.

Pay per click management services relieve you of that burden so you can concentrate on your business. Affordable prices. Call us to see what we can do for you.