Google is taking over the world.
No really – think about how many times in your own daily life you use a Google product or are impacted by Google in some way. Many of us use Google as our main search engine of course, but even aside from that… Is your email through Gmail? Do you get directions through Google Maps? How about the last time you watched a video on Youtube? Yep, Google owns that too!
Just admit it. Google is huge, it’s everywhere and it’s here to stay. So how did this company get so big? How did it make all its money? All of the Google products I just listed are free – so how did Google make so much money with free products?
Advertising? But I’m not required to watch a commercial or anything before I’m able to perform a search, what do you mean by advertising?
I mean Pay-Per-Click Advertising – the ability for companies to bid on ad space on Google’s results page and pay Google each time their ad is clicked. Because of these ads, Google made about $50.6B from advertising alone in 2013.
How Does it Work?
Let’s say you own a small business that sells baby clothes. Because you’re small compared to other stores that sell baby clothes, it will probably be very difficult for you to rank on the first page of Google results. Think about who also sells your product – not only do other baby clothing/supplies stores sell them, but also big department stores who have large websites and lots of authority. So you decide that since you can’t beat the online competition naturally, you want to invest in your business by spending money on advertising to get in front of more customers and increase traffic to your site.
Now traditionally, advertising has typically meant paying for ads in magazines/newspapers, buying TV commercial spots, or putting up billboards. But these traditional marketing platforms cost a lot of money for a very wide audience. It’s great to get in front of a lot of people but what if you could pick and choose who you wanted to get in front of? What if you could spend your money only on those people who were most likely to purchase from your site?
That’s what Google helps websites to do. Google is a search engine – meaning searchers come here to find answers or solutions to their problems. They are looking for information and by taking a look at their query, you can tell whether or not you would be able to help this person find what they’re looking for.
Google’s ads allow you to show up for all searches related to baby clothes and prevent yourself from displaying when people are searching for basketball hoops, TVs, party decorations, restaurants, etc. When you create a Google Adwords account, you specify when you want to show up and you only pay when that targeted audience ends up clicking on your ad. It’s a great way for advertisers to limit their marketing spend with highly targeted audiences.
Aside from the ads that show up within Google’s search results, there are also a variety of other ads that Google offers as well that display throughout the Google network (a collection of other websites that display paid ads from Google) including remarketing ads and display ads.
How Much Does a Click Cost?
The actual cost per click varies depending on many factors. Each advertiser sets a max bid for each keyword they want to show up for, which is the maximum amount they are willing to pay per click for that search. Essentially you and every other company bidding on the same keywords go into an auction together and are ranked based on how much each is willing to pay and who is most relevant to the search.
Paid ads are not a bad thing. Some people have formed the assumption that just because the company paid to be there, they must not be relevant. This is not always the case. It’s very difficult to rank naturally on the first page when there’s so much competition, so sometimes really great websites just can’t get there. Paid search is a way those websites can increase exposure. Plus, the paid ad is very strategic – based on your search query, a search marketer chose exactly which page of the site they think you should land on. This means that there’s a chance the paid ads can actually be better results for what you’re looking for. (Sometimes, not always). If a listing entices you, go ahead and click on it. Just understand that every time you click on a listing in the shaded box, that company is paying for your click. If you see the same company also listed organically, you can avoid the company’s added expense by just clicking on the organic listing instead.