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  1. What Is
March 27, 2017

What is Google AdWords?

The revenue source of one of the biggest tech beasts explained.

By Joao Lima

Google AdWords is an online advertising service.

Google AdWords lets advertisers set a budget for advertising, with the advertiser only charged when the ads are clicked or when a conversion or impression goal is met. The service lets users target web users based on predefined keywords chosen by advertisers.

The service offers a choice of advertising options – pay-per-click (PPC), cost-per-acquisition (CPA), cost-per-thousand-impressions, or cost per mile. There are also options for site-targeted advertising for text, banner and rich-media ads, as well as remarketing services.

Advertising via AdWords has become one of Google’s main sources of revenue.

 

How are the costs of AdWords calculated?

The cost of AdWords depends on the advertising strategy chosen by an organisation. Those using AdWords can focus on clicks, impressions or conversions, with the cost of running an ad based on an ‘auction’. Every time a search is made on Google, the tech giant runs an auction to determine the ads that show on the results page. If it is a popular search term, the cost of the ad goes up.

AdWords was launched in 2000, and the service initially allowed advertisers to pay monthly. Google would then set up and manage their campaign. Google then introduced the AdWords self-service portal to accommodate small businesses and those who wanted to manage their own campaigns.

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