From Wikipedia, the free encyclopedia
AdWords is Google's flagship advertising product, and main source of revenue. AdWords offers pay-per-click (PPC) advertising, and site-targeted advertising for both text and banner ads. The AdWords program includes local, national, and international distribution. Google's text advertisements are short, consisting of one title line and two content text lines. Image ads can be one of several different Interactive Advertising Bureau (IAB) standard sizes.
Contents[hide]
1 Pay-Per-Click advertisements (PPC)
2 Site targeted advertisements
3 AdWords distribution
4 Click-to-Call
5 History
6 Legal context
7 Ad blocking and Adwords
7.1 Search
7.2 Content network
7.3 Proxies
8 Technology
9 Competitors
10 See also
11 References
12 External links

Pay-Per-Click advertisements (PPC)
Advertisers specify the words that should trigger their ads and the maximum amount they are willing to pay per click. When a user searches Google's search engine on www.google.com, ads for relevant words are shown as "sponsored link" on the right side of the screen, and sometimes above the main search results.
The ordering of the paid listings depends on other advertisers' bids (thus the system is classified as P4P) and the "quality score" of all ads shown for a given search. The quality score is calculated by historical click-through rates and the relevance of an advertiser's ad text, keyword, and landing page to the search, as determined by Google. The quality score is also used by Google to set the minimum bids for an advertiser's keywords.[1]
The auction mechanism that determines the order of the ads has been called a "generalized second price" auction. It is a variation of the Vickrey auction.

Site targeted advertisements
In 2003 Google introduced site-targeted advertising. Using the AdWords control panel, advertisers can enter keywords of interest, and Google will recommend relevant sites within their content network. Advertisers then bid on a cost per mille (CPM) basis for placement.

AdWords distribution
All AdWords ads are eligible to be shown on www.google.com. Advertisers also have the option of enabling their ads to show on Google's partner networks. The "search network" includes AOL search, Ask.com, and Netscape. Like www.google.com, these search engines show AdWords ads in response to user searches.
The "content network" shows AdWords ads on sites that are not search engines. Google automatically determines the subject of the pages and displays ads for which the advertiser has specified an interest in that subject. The ads show in boxes resembling banner ads, with the designation "Ads By Gooooooooooogle." These content network sites are those that use AdSense, the other side of the Google advertising model. Click through rates on the content network are typically much lower than those on the search network and are therefore ignored when calculating an advertiser's quality score.
AdWords is used by publishers who wish to bring traffic to their websites. The biggest competitors are Yahoo! Search Marketing (following Yahoo!'s acquisition of Overture Services, Inc.) and Microsoft adCenter.

Click-to-Call
Google Click-to-Call[1] is a service provided by Google which allows users to call advertisers from Google search results pages.
All calls are free at Google's expense. However, if the call is made to a mobile phone, the caller may incur fees depending on the mobile phone plan and the location of the caller and the advertiser (if they are in different countries at the time of the call, the call will probably cost more).
Abuse of the service is easily achieved, making it questionable about how long it will continue to exist. As some individuals have pointed out in technology blogs, you can easily connect two different numbers who have no intention of talking to each other. This is easily accomplished by typing in the phone number of a company or other individual, which will then connect them to the directory listing selected.

History
The AdWords product was launched in 2000.[2] At first advertisers would pay a monthly amount, and Google would set up and manage their campaign. To accommodate small businesses and those who wanted to manage their own campaigns, Google soon introduced the AdWords self-service portal. As of 2005, Google provides a campaign management service called Jumpstart [3] to assist advertisers in setting up their campaigns.
In 2005, Google launched a program to certify individuals and companies who have completed AdWords training and passed an exam. Due to the complexity of AdWords and the amount of money at stake, many advertisers choose to hire a consultant to manage their campaigns.

Legal context
AdWords has generated lawsuits in the area of trademark law and click fraud. Google recently settled a click fraud lawsuit for US$90 million. [4]
Overture Services, Inc. sued Google for patent infringement in April 2002 in relation to the AdWords service. Following Yahoo!'s acquisition of Overture, the suit was settled in 2004 with Google agreeing to issue 2.7 million shares of common stock to Yahoo! in exchange for a perpetual license under the patent. [5]

Search
The ads are displayed on the top or right hand side of the natural search results. The ads are pure text, and thus difficult to block for normal ad-blocking software. However, the Mozilla Firefox extension CustomizeGoogle can remove them.

Content network
Advertisements on content websites are displayed via JavaScript-generated iframes and can be easily blocked, either by turning off JavaScript or using ad-blocking software such as Adblock.

Proxies
The search proxy Scroogle allows users to perform Google searches without receiving Google advertisements.

Technology
The AdWords system was initially implemented on top of the MySQL database engine. After the system had been launched, management decided to use a commercial database (Oracle) instead. As is typical of applications simultaneously written and tuned for one database, and ported to another, the system became much slower, so eventually it was returned to MySQL ([2])

[edit] Competitors
Yahoo! Search Marketing
Microsoft adCenter

[edit] See also
List of Google tools and services
Click fraud
Central ad server