Google 2008 Annual Report Download - page 24

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How We Provide Value to Our Advertisers and Content Owners
Google AdWords
For advertisers seeking to market their products and services to consumers and business users over the
internet, we offer Google AdWords, an auction-based advertising program that lets advertisers deliver relevant ads
targeted to search queries or web content across Google sites and through the web sites of our Google Network,
which is the network of online and offline third parties that use our advertising programs to deliver relevant ads
with their search results and content. The Google Network is also increasingly encompassing different forms of
online and offline media as well, including content providers who use our advertising programs to deliver ads in
online video, television and radio broadcasts. AdWords is accessible to advertisers in 41 different interface
languages.
Advertisers in our AdWords program create text-based or display ads, bid on the keywords that will trigger the
display of their ads and set daily spending budgets. AdWords features an automated online signup process that
lets advertisers quickly implement ad campaigns on Google properties and the web sites of our Google Network
members. Ads are ranked for display in AdWords based on a combination of the maximum cost-per-click pricing
set by the advertiser and click-through rates and other factors used to determine the relevance of the ads. This
favors the ads that are most relevant to users, improving the experience both for the person looking for
information and for the advertiser who is generating relevant ads. The AdWords program offers advertisers the
following additional benefits:
Return on Investment. Many advertising dollars are spent delivering messages in an untargeted fashion, and
payment for these advertisements is not tied to performance. AdWords shows ads only to people seeking
information related to what the advertisers are selling, and advertisers choose how much they pay when a
user clicks on their ad. Because we offer a simple ad format, advertisers can also avoid incurring significant
costs associated with creating ads. As a result, even small advertisers find AdWords cost-effective for
connecting with potential customers. In addition, advertisers can create many different ads, increasing the
likelihood that an ad is suited to a user’s search. Users can find advertisements for what they are seeking, and
advertisers can find users who want what they are offering.
Branding. We also offer Site Targeting, a service that lets advertisers target specific web sites with text, image
and Flash ads, so that they can more effectively reach specific sets of customers. In addition to targeting sites
by content, advertisers can choose placements on sites based on user demographic attributes. To protect
user privacy, we use only third-party opt-in panel data to map the demographics of sites in our networks. Site
Targeting is an auction-based system where bidding is based on a maximum cost per impression, and Site-
Targeted ads compete with keyword-targeted ads in the same auction.
Access to the Google Search and Content Network. We serve AdWords ads on Google properties, our
syndicated search partners’ web sites, and the thousands of third-party web sites that make up the Google
Network. As a result, we can offer extensive search and content inventory on which advertisers can advertise.
Apart from keyword-based ads targeted to search queries and Site Targeting, we also offer advertisers an
effective contextual advertising option—Content Targeting—that displays their ads on relevant content pages
across our network of partner sites and products. As a result, AdWords advertisers can target users on Google
properties and on search and content sites across the web. This gives advertisers increased exposure to
people who are likely to be interested in their offerings. The Google Network significantly enhances our ability
to attract interested advertisers.
Campaign Control. Google AdWords gives advertisers hands-on control over most elements of their ad
campaigns. Advertisers can specify the relevant search or content topics for each of their ads. Advertisers
can also manage expenditures by setting a maximum daily budget and determining how much they are willing
to pay whenever a user clicks or views an ad. Other features that make it easy to set up and manage ad
campaigns include:
•Campaign management. Advertisers can target multiple ads to a given keyword and easily track
individual ad performance to see which ads are the most effective.
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