Adwords

Google AdWords, a pay-per-click system of delivering contextually relevant adverts, is Google's core advertising service and its main source of revenue.

The adverts appear as 'Sponsored listings' on Google's search engines, both above and to the right of natural search engine results. They are identified as sponsored links to clearly separate them from the unpaid and impartial natural listings.

Companies bid on the sponsored listings, with positioning being determined by company preference, bid amount, Google quality score and factors such as location. Adverts are automatically placed by the system, with payments being made for each clickthrough until the allocated budget for the day has been used.

The cost of AdWords can vary dramatically depending on the competitiveness of the keywords targeted; from almost negligible fees to amounts in excess of £50 per clickthrough for terms relating to mortgages or lucrative legal claims, e.g. "mesothelioma lawyers".

Many businesses operate their own AdWords accounts, although for the benefit of those companies wishing to use an external agency, Google offers a Qualified Professionals program whereby experienced account managers can achieve official Qualified Individual status.

Under the AdWords terms of service there are several keyword areas which are banned from the service, including pornography and tobacco-related keywords. In May 2008 Google relaxed its rules slightly to allow UK advertisers to bid on trademarked names (for example, one retailer could bid on the another's name).

AdWords is often criticised for being an expensive advertising option; particularly for companies which do not understand methods of limiting their expenditure and increasing ROI, such as using negative keywords in campaigns (identifying words for which you do not want click for, e.g. "payroll software" might be desirable, whereas "free payroll software" might not.

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