Who, exactly, clicks on Google sponsored ads?One response was:
the folks who are clicking on ads are the ones who don't realize they are ads and that, when they do, there will be hell to pay.Meaning that Google will go down in a ball of flames if people figure out that they are clicking on ads. I don't believe this, but it got me thinking.
So when do I click on ads, knowing full well that I am clicking on an ad? Well one in particular is if I'm looking for a particular website, say ebay for example, I will put the site name into my google toolbar and since it's the first thing that shows up at the top of the page, I may click the ad even though they are the first result in the regular search results. It's a shorter distance from the toolbar down to the ad link. This is obviously bad for the advertiser. Why advertise on a keyword where you are first anyways? Most likely because they don't want you to even think about going to a competitor.
The other time I click on an ad is when I'm shopping. I will search for the product I want and check out multiple sites from regular results (organic) and sponsored results (ads) to do comparison shopping. The site that looks very professional, has a solid business, AND has a good price will get my money. This is good for the advertiser. It gives the small guy a chance to get to the top of the list and it actually works. The ROI for a retailer using adwords is significant.
So how valuable is it to non-retailers? Now that's a tough question and it makes it even tougher because it is very hard to track whether a click on an ad turned into revenue. For online retailers, this is easy, you simply setup a web analytics product like ecommStats and you start seeing this information in real-time. You see how much revenue a particular ad brings in and you know the cost of the ad, so the ROI is the revenue - the cost of the ad (it's usually a bit more complex than that, but you get the picture). A non-retail business may advertise to get leads, to build their brand, or some other reason which may turn into a sale at some point in the future, but how do you know if it's from your Google Adwords? You may be able to an adword click to the lead and follow that through to a sale, but this is a very complex task requiring integration of various systems and can only capture a small portion of what's happening.
In any case, we know that Adwords is valuable because some companies base their entire marketing budget on it and it pays off. The relevancy of search engine advertising cannot be beat in any other medium... yet.
web analytics | adwords | seo | sem | advertising
