Google Advertising - The Basic Landscape of AdWords

Google makes the vast majority of it's money through advertising revenues. More specifically Google generates advertising revenue through there advertising program known as AdWords.


The heart and soul of Google's advertising success is the ability to target advertisements to the target market. When a consumer searches for a product or service the most applicable advertisements will be shown to that consumer. Thus Google has introduced an unsurpassed relevancy to advertising.

Google advertisements are distributed through two main channels. The first, most effective, and thus valuable is the search based advertisements. The second and ever growing source of Google advertisements is through the content network.


Two AdWords Distribution Channels

Advertisers can place ads on content websites or search engine result web pages.

Search

The search advertising or search engine marketing which is often abbreviated as SEM has and remains Google's bread and butter when it comes to revenue and advertiser success. The success of search advertising derives from the three R's of online marketing.

The ability to reach the interested consumer at the time of interest was never possible before AdWords. This ability to target both relevance, and peak interest is amplified by the ability to track the performance of almost every aspect of an advertising campaign. Advertisers can track almost anything whether it be time of day, location, demographic, search query, landing page, ad copy, or practically any other variable you can think of. This ability to track performance allows advertisers to hyper focus their advertising budget like never before.

Another big advantage of SEM is the notion that you only have to pay when a user clicks on your advertisement. Instead of the pay for display method of advertising Google search advertising only charges an advertiser if a user clicks on the ad.


Content

Google search advertisements are not always clicked on. In fact the majority of the time a search user will elect to click on a organic search listing. So what is an advertiser to do once the user has left google and found a site or online resource with the information that they are looking for? Google came up with a solution.

Google partnered with online publishers and content providers through a program called AdSense which allows advertisers to obtain an enormous advertising reach via the websites participating in AdSense. Websites that partner with Google through AdSense allow Google to place advertisements on their website. Google in return shares the advertising revenue with the websites.



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Hey Check out What Google is Advertising...

I was on Alexa or somewhere and saw a Google banner advertising this link....

http://20thingsilearned.com/


Have you guys seen this before? Is this old News?


Let me know what you think about it.

- Finance Guy

Online Advertising Spending Round Up

Well the overall economy, the housing market, and consumer credit may be struggling but there is one side of the economy who missed the recession memo.

The online advertising and marketing industry is popping like never before. The entire industry seems to be doing well. All the usual suspects are turning big gains in revenue, profits, and of course possibility.


In this post I want to take a look at the mechanics of what is driving the ever increasing online advertiser spending.


Display Advertising


Google has seen a huge jump in online display advertising. YouTube.com is operating at over 100,000,000,000 monetized page views annually. This means that they (my speculation) have another 700,000,000,000 page views to figure out how to monetize.

I would say things are looking pretty good on that end.

Display advertising overall for Google is projected to create 2 or 3 billion of revenue this year. Though this is maybe 10% or even less of total revenues for Google, the fact that it is even worth mentioning is a huge breakthrough for google who for the longest time was simply not competing in the display adverting market.

Overall Google profits jumped about 33% year over year.

Nice.

Break Down of the Display Advertising Market Online


Total Display Advertising Market is 8.6 Billion

• AOL  -  4% -  $344,000,000.00
• Google - 6% - $516,000,000.00
• FaceBook. - 10% -  $860,000,000.00
• Yahoo! - 15% - $ 1,300,000,000.00

What I think is particularly interesting about this break down is that the numbers imply that the giants of the online industry are only accounting for about 1/3 of the total display advertising market.

Other big ones I can name from off the top of my head are adbrite.com which is a network. See the display below...

AdBrite.com

Then there are some large websites such as hulu.com which have to make a dent.

Any how one thing for sure is that the display advertising dollars and industry have a lot of room to grow and have a lot of uncertainty in exactly who and what will work for the long term and why.

It is going to be an exciting ride.

I am sure that finance bloggers are going to be all over this thing.