Google AdWords is a form of Pay Per Click advertising. It enables you to place your ads in front of people looking for what you sell at the precise time that they are searching. This means that they are hot prospects.
If someone clicks on your ad, you pay Google. You do not pay Google just for getting your ad displayed. This means that you immediately know that you are only paying for advertising that has generated interest.
Once someone clicks on your ad they go to your website and it doesn't have to be the home page of your site. In fact in many cases it is better to drive traffic to a web page that is directly relevant to the search.
The amount you pay for a click will depend on a number of factors, the single most important one being how much your competitors are prepared to pay for a click too. If you operate in an area where the value of web traffic is high, such as insurance, then other businesses will be bidding aggressively to get their ads shown alongside your own. In such a case, you may need to be prepared to pay a lot of money per click. In other areas, clicks are very cheap and can often be less than 5p a time.
Broadly, the more you are prepared to pay for a click, the higher your ad will rank but there are several other factors that come into play too. You set how much you are prepared to pay for a click on a keyword by keyword basis. That is to say, you select which search terms or keywords will trigger the display of your ads and choose how much you are prepared to pay for a click when one of those keywords is entered as a search into Google. You can and should set different bid prices for different keywords because web traffic generated by different keywords differs in value sharply!
The AdWords system lets you target your advertising geographically too so if you want to advertise in central London and Fiji only, you can.
You can also control the time your advertising is active if you are only able to deal with sales enquiries during office hours.
Finally you can set very tight budget controls over your AdWords costs. For example you can limit your daily expendture to £1 or less. You can also set how much you are prepared to pay for a click - the bid price - and at any stage you can turn off your campaign altogether and not incur any future costs.
So that's the outline of the AdWords system but there are many, many additional features that you need to understand if you are to get best value out of it. For a start, you need to have some idea what web traffic is worth to your business - your visitor value.
You also need to understand how AdSense works, and Conversion Tracking, and how to use copywriting techniques to craft good AdWords ads that attract clicks from potential buyers and not from freeloaders. One other thing to think about is how to use AdWords in conjunction with Search Engine Optimisation because the two go hand in hand. Don't make the mistake of assuming the SEO is free! It takes time and effort and results are usually slow to come in which means that you will be missing out on valuable web traffic every day your site doesn't rank well.
