Internet 101 — Google AdWords
Yesterday I wrote about some simple techniques for finding what a blog or conventional web site might be worth … or what Google thinks it is worth.
What Google thinks about a site is extremely important … no matter whether the site owner uses methods to monetize via Google, because Google is the Internet’s number one source of visitors to almost any site … often by a very large margin.
I talked about the principle of known to unknown in teaching folks how things work, and then I went ahead and violated the principle right in the same article. Google, and in particular the two major money-oriented programs of Google, AdWords and AdSense are, to many folks, nothing more than bunch of Googley-goop. A great majority of bloggers and web writers, including me … sorry … seem to go around thinking people have a grasp of these programs … and the simple truth is, many folks do not …so trying to teach techniques to use the programs is sort of like trying to teach advanced knot tying to someone who hasn’t yet even felt a rope in their hands.
Let’s straighten that issue out and get you started on the road to understanding Google, and it’s close competitors, in a way that even some highly experienced "Internet barons" don’t seem to understand.
We’ll look at AdWords first, because in the study of nearly any complex business process, the real understanding comes from a basic knowledge of where the money is … and Google does almost no business that brings in revenue except via AdWords.
Did you read a newspaper this morning? (if not, borrow one or stop by the local library and read one). Now riddle me this … how did that newspaper make money … money to stay in business, pay the reporters, editors, compositors, pressmen, etc. … all the folks who make a newspaper happen?
If you said via the money you paid to the paper boy for your subscription, or the change you handed over to the convenience store clerk … Bzzzzzzz. Wrong. Newspaper subscriptions and newsstand sales seldom even cover distribution costs of the newspaper. A general circulation newspaper would go broke in a month on just their home subscription collections … that money goes to pay the carriers and the other costs of distribution … but it wouldn’t even pay the costs of ink, let alone the paper.
A garden-variety newspaper makes money from advertisements … those little two-inch ads for Tom’s private detective agency, the full page ads for Wal*Mart, even the Sunday entertainment "Supplements" an their paid editorial content. Everyone from Tom the detective through Northwest Airlines to Mutual of Omaha Insurance wants their ad in front of your eyeball, in hopes that you will part with some of your money for their product.
Google AdWords is essentially just one big, gigantic Sunday newspaper … with an important difference. Let’s take a look at our detective friend, Tom. He can pay $500 a week for his little display ad and some of the hundreds of thousands of folks who read the local paper will notice it. Perhaps some of those who notice it will have some need for Tom’s services and give him a call. And if Tom can close the sale on a phone inquiry, Tom will have a client. If one client pays for services that make Tom $500 profit, the ad has paid for itself … Tom got a return on his investment. If he gets two clients out of the ad, Tom’s kids even eat that week.
Now let’s imagine that this week Tom decides to surf over to adwords.google.com and instead of paying his money to the Daily Bugle, to buy himself a little Google ad for his services. How much will it cost Tom to get his ad displayed on Google? The thrifty among you will like this … nothing. nada. Not one red cent. Tom can put up an ad, have it seen by everyone online in the world, or everyone surfing in a certain country, or region or state. Tom submits the ad and Google displays it, millions of times per day (via Google AdSense ads) but charges Tom nothing unless someone clicks on (clicks through) that ad and goes to the location Tom has set up for the ad … typically Tom’s web site sales or "landing" page.
You can see the similarity to the newspaper model, but you can also see the huge advantages to Tom. For $500 he can get as many as say 5,000 "qualified" … that is people who want to know something about his services … viewers of his ad and he will only be charges one by one by the people who makes the ‘trip’ to his sales page. he never pays a penny for people who aren’t interested in learning about his business offerings.
He can also change the ad as often as he wishes … even changing it on different days of the week, or running 6 different ads and keeping detailed records (Google does this for him. free) as to which of the 6 work the best.
Fantastic tool, AdWords, and something you, as a blogger or web site owner need to understand, even if you never run a single ad.
Enough for now, we’ll talk next about the "other side" of AdWords, the publishers who provide the "virtual" newspaper pages where Tom’s ads get displayed.
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