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Real-Life Lessons in Using Google AdWords

Google AdWords is a pay-per-click advertisement system which allows advertisers to put out ads that will have a higher probability of reaching their target audience. The advertisers pay a fee according to how many clicks their ad link receives. While this helps to streamline the advertising process, (in contrast to television, radio, or newspaper advertising) there are many caveats to this service that advertisers should be wary of.

An internet ad can rack up clicks extremely fast, so it is wise for an advertiser to have a predetermined budget allocated towards internet advertising. Furthermore, there is not necessarily a strong positive correlation between the number of clicks an ad receives and the actual increase in revenue the ad brings about. The New York Times article gives an excellent example of using the keywords “iPhone repair” for an advertisement. Undoubtedly, this keyword was extremely popular and yielded many clicks for an iPhone repair ad. However, the vast majority of the people on the Internet were not willing to ship their phone to have it be repaired.

In light of this, the advertiser decided to localize his iPhone repair ad. Essentially, his ad would only show up for Internet users who searched up “iPhone repair” within a 50 mile radius. Not only did this lessen the advertisers expenses towards AdWords, it also increased net profit.

 

Reference: http://www.nytimes.com/2009/10/15/business/smallbusiness/15adwords.html

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