How EXACTLY does Google Adwords work?

[kael]

Can someone please explain how Google Adwords works.

You can't see what others are bidding per keyword/phrase, but does Adwords deliver top positions for adwords with the highest CPC or with the most relevant keywords/terms within the advert., or a combination of both?
Unfortunately I couldn't find anywhere were you could see what $ others are bidding on the keyword.

Anyone have any insight to this?
Thanks

[hopkinted]

Google uses a combination of the max CPC you set in the system, and the click thorugh rate on your ad to determine where your ad will rank on the page. Unlike Overture, ranking of ads is not based soley on how much you pay for each click. That's why it's impossible to determine exactly how much you're competitors are bidding. It's possible for someone to be paying a lower CPC and still appear higher than you on the page if their ad has a high click through rate. Google does this to give maximum exposure to the most relevant ads with the highest clicks throughs. Theoretically this improves the user experience.

Check this site out for a good overview of how the different PPC search engines work:

http://www.pay-per-click-advertising-guide.com/Search_Engine_Reviews.html

[nikko952]

Kael: I would agree with HopkinTed. I use Google Ad Words and in the beginning of a fairly recent campaign, I had to raise my pay per click to 50 cents .... in order to get enough exposures to establish a high CTR. My experience is that you have to start out higher in Google (for my key words anyway) than you do in Overture, where you can simply outbid your competitors. Over time, my CPC has come down. On this same campaign, now that my CTR on this campaign is about 17%, my average CPC is 17-18 cents. And my average position is 1.5. I've lowered my max amt to 35 cents, but haven't gotten anywhere near this amt in weeks.

I may be in the minority here, but I've found Google Ad Words to be one of the most cost effective type of advertising or promotions that I've used anywhere in the scope of my business. .

[barcky42]

I am very new to the AdWords scene, and I was wondering if someone could help explain the very basics of using AdWords with out a website. I am unfamiliar with acquiring an affiliate site, if it's still profitable or even possible (and affordable, come to think of it). My understanding of this system is that I will start an AdWords account, and bid on certain keywords. Once I get these keywords, I will be able to find organizations that may be associated with the keywords I 'own', and may be interested in advertising through me? Once this is accomplished, am I responsible for creating the actual advertisements myself? I would imagine this is the case, but again, I am inexperienced. From there (assuming I don't have a website of my own to post these ads on), I'm assuming that my next task would be to find some (or just one? what's the norm for this?) affiliate(s) who would want to use my advertisements.

Any advice? Thanks in advance for any replies.

[SixDeep]

Originally Posted by barcky42

I am very new to the AdWords scene, and I was wondering if someone could help explain the very basics of using AdWords with out a website. I am unfamiliar with acquiring an affiliate site, if it's still profitable or even possible (and affordable, come to think of it). My understanding of this system is that I will start an AdWords account, and bid on certain keywords. Once I get these keywords, I will be able to find organizations that may be associated with the keywords I 'own', and may be interested in advertising through me? Once this is accomplished, am I responsible for creating the actual advertisements myself? I would imagine this is the case, but again, I am inexperienced. From there (assuming I don't have a website of my own to post these ads on), I'm assuming that my next task would be to find some (or just one? what's the norm for this?) affiliate(s) who would want to use my advertisements.

Any advice? Thanks in advance for any replies.

Well first things first, you will definitely need a website. The ads that are generated in Adwords basically work like this;

Lets say you own a website about hot dogs. your website address is www.myhotdogs.com

You sign up for an adwords account and create an ad that says "Quality hot dogs, best prices for parties all sizes". Now on your website as well as in Adwords, you're wanting to have keywords that gel with each other pretty well. So in adwords you are allowed to designate these keywords or keyphrases that you think someone would search for in google, thus your ad will show up in the results pages (with no guaranteed position), as well as on sites running the google adsense campaign that are complimentary somehow to your keywords. So a website selling ketchup and mentions hot dogs might end up having your ad appear on it. Don't let the word BID fool you. You are basically allocating funds dedicated to those keywords. The more funds put into it, the more your ad can appear per month all over the net. What I would suggest however is to head over to googles website and learn aobut how this works. READ. RE-READ. Grasp the concepts and guidelines and make an informed decision on how to integrate this into your marketing plan for the short and long run.

https://adwords.google.com/select/main?cmd=Login&sourceid=AWO&subid=US-ET-ADS&hl=en_US

[anjanesh]

But whats the point in bidding if we arent allowed to view the competitors bid ? If I input $100 for a keyword and the current maximum bid is $1000 then I would like to know that the highest is $1000 so that I can place a new one of $1001. Shouldnt bids be placed like that ?

[SixDeep]

Because that would make the playing field a little too competitive and render the whole system as somewhat hostile and riddled with favortism to the highest bidder. Google wont shoot themselves in the foot like that.

Its just my opinion, but dumping a ton of money into your adwords is at best futile depending on the keywords. What you would rather do is to take that amount of marketing money and spread it out over multiple Adwords "campaigns" that are less searched terms thus allowing you to pay less and get better placement. Research research and then research those keywords.

[shoaeeb]

You can get higher rankings for your ads for your nice combination of relevant creatives and ppc bids.

[shogun208]

Sooo. I'm also very new at this at trying to get an e-commerce site set up. Are you paying each time your ad is shown or when the potential customer clicks on the advertising link? Are you paying your bid price each time it's shown or clicked on? Thanks.

[tobilove23]

good info guys