Adwords | AdSense | AdExchange

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I am pretty sure all of you must have come across different kind of Ads while browsing around the Internet. Many of you also must have wondered why the Ad pops up on every site they visit as if the Ad is literally following them. This blog post is an answer to all those doubts.

I assume you are a novice to the given topic. With this post, I want to give the readers a general overview of the most used Ad-serving Platforms over the Internet.

So, let’s dive In . . .

Overview

For starters, let me tell that these 3 platforms are the products of Google.

It’s said that Internet is not owned by anyone… But looking at today’s scenario I really do think that Internet does have owners. The Big Tech companies like Google, Amazon, Microsoft, and Facebook, are earning billions of dollars owing to the Internet.

If you look at these big names, most of them have the monopoly in their respective market. Not just that, but they have started to explore the other marketplaces as well. In such a scenario, where a user’s information is continuously being tracked and used for business purposes, it becomes a major necessity to have a basic intuition of working of these products that the companies are offering.

Google, undoubtedly is the leader among them all. It’s almost everywhere. I seriously have a feeling that in the next 10 years, we might be enjoying an ice cream on a Summer afternoon which has some intelligent chips as a hidden ingredient, which would go into our system and after tracking our information will send it directly to Google.

LOL… I know that might sound crazy, but the intense work that the company is doing each day, to produce something new and different for their Users, something that brings change, and also the amount of Money they are investing in the technologies of the future, from self-driving cars to Genomics to Bioinformatics, looking at all these aspects, I believe that they have got the potential to bring a big Revolution across the entire world.

Yeah, so coming back to the topic, what exactly are these platforms in the Title.


AdWords

Google, started as a search Engine but now over the decades, it has grown much more as a company, It has become a brand. People trust the site and believe in everything that the search engine displays them as their results. It has become a “GOTO” place for everyone for any of their doubts. Be it regarding education, or certain geographical information, physiological issues, even health-related issues which are better consulted with a doctor are being asked on Google. Obviously when there is so much of traffic coming in every day… Google would definitely want to Monetize it.

Not just that, as a user, I would like to get the best results for my searched query. In case I am not satisfied with the results than over the time my liking for the platform would decrease and I might opt for some other search engines such as Bing or Yahoo. Knowing this, obviously, the Company will not want to lose out on such valuable users, due to some faulty search results.

So There are two major Parameters

  1. Show the best Search Results for the User’s Queries on the Top, so they don’t have to keep tracing all the search result pages for their desired solutions.
  2. Monetize the Traffic.

Google balances both these points. All the Algorithms that go behind the Ad Display is designed with the same goal in mind.

Let’s start with an Example:

Suppose I am going on a holiday to Singapore in the upcoming month of May. So, I’d want to make all the arrangements before I actually go there rather than running everywhere at the end moment.
Things I need to do:

  • Book Air tickets (Two way)
  • Hotel Bookings
  • Plan a Trip around the city
  • Look for some good attractions
  • Know the active cabs around the city

So, now what would I do, I’d go to Google. Search on it. So my results would look something like in the below pics.

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In the first four Search Results, one can find an ‘AD’ symbol at the bottom left corner. These are called ‘Search Ads’. They are sponsored.

 

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Below those Paid Ads, usually the Best Search Results appear or Google puts up its own module as seen in the above pic. Google has shown results from its own flight services.

So, how do these search results come in? How they get filtered? How does Google decide which ones to give more priority and which ones to neglect? Even for a single query, there are multiple sources which can be considered ‘BEST’, then how does one rank this pages?

Web Scrawling – Whenever there is a Google Search, it goes through the whole network, scrawls over the all the relevant sites and after examining every page from top to bottom, it ranks the page based on its:

  • Content
  • Quality
  • Landing Page

These three characteristics together help the Search Engine to rank the pages and hence display it on the results Tab.

When I search for Air tickets for Singapore on the Internet, there can be millions of website that actually have a mention of these terms, for that matter even my blog is one of them. Still when one searches for it on Google, my blog won’t appear even in the first 100 pages of Search results of Google, BECAUSE the devised Algorithm understands the contextual and semantic placement of the words, that’s the reason that it knows that my website is irrelevant to someone who is actually trying to book a flight.

So, you know what Ads are and now you know how Google filters the search results.

Now the point is how are the Ads created?

As a user, whatever I search for, in most cases, I get the answer on the page 1 itself. It’s rare for me to even visit page 2, or later. So, given such a mindset, All the Product companies who want to sell/publicize their product, will want to be featured on the very first page of the Search Results, because that will increase the chances of a user visiting that website to clear his query. Once the user visits, then if the website is engaging enough, he/she can easily be converted and compelled to sign up for a letterhead / Make a Transaction, etc.

But what if the Quality of the page isn’t that good, in that case, one can BOOK a SPOT for themselves on the first page. That is Adwords for you.

Just like in real world, if a Seller wants to put up a big Banner in the most crowded zones of the city, He will have to pay to the Publishing Company who owns the space. As a seller, he will want to increase the Brand Awareness in general population. The Online Ads are meant to serve the same purpose. The flow starts with the Firms paying Google for getting featured on the top searches to attract more Audience.

Firms bet on certain Keywords which mostly their Target Audience would search for. Whenever a user would actually come and search for the same or related Keywords, the Ads related to the Company will be presented in front of the User.

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Searching the Term ‘iPhone Shops near Ahmedabad’ or ‘iPhone Flipkart’, ‘iPhone Amazon’ or something like that.

 

As one can see in the picture, when I searched for “iPhone Flipkart”, the first page of the Search Results is filled with Flipkart URL links. But one could find an ‘Amazon’ iPhone ad as well. This is shown because, Amazon has bought ‘iPhone Flipkart’ / ‘iPhone’ / ‘Flipkart’ / etc. Keywords. So whenever there is query related to this Keywords, ads for the Company are displayed.

PS: The above ‘iPhone Ads’ are known as Display Ads.

Now, you see two competing companies have bet on the same Keyword. i.e both Amazon and Flipkart have bought ‘iPhone’ Keyword. Hence whenever a user searches for these or related terms like ‘iPhone Prices’ / ‘iPhone Covers’ etc, one would be able to see the Ads from Both the companies.

So how would Google know which one to give higher priority?

It takes two major Factors:

  1. Quality of the Website ( Relevance of  Landing Page )
  2. Bidding Amount ( More the amount better it is )

When the given conditions are satisfied, that is the website has an attractive Landing page and the Bidding Amount is also high, then the particular Ad usually appears on the top search results.

The Platform is also known as PPC or Pay Per Click Platform.

You don’t pay for the Impressions ( When an Ad is displayed to a visitor, it is considered as one Impression ). Clients mostly pay for the number of time the users, having seen the Ad, click on it. In some cases where the CTR is low, their CPM ( Cost per thousand Impressions ) is considered as a standard parameter for calculating the Cost.

A Perfect Scenario would be

  • Low Budget
  • Low CPM ( Cost per 1000 Impressions )
  • Low CPL ( Cost per Lead )
  • High CTR ( Click through Rate )

In one of the above pictures, I had put up an example of a Display Ad. The main purpose of this Ad is not to generate Revenue, but it is to spread public awareness regarding the product. Even the Clients don’t expect a Display Ad to perform so well, but then it does leave an impression on User, who can later return to a site via an organic Search ( Google / Yahoo / Bing ).

Google has a dense network, millions of website come under its hood. Hence, if you somehow end up on some company’s Adwords Targeting List, then for sure, wherever you go around the Internet you’ll have to come across the Ad as Google shows it on all possible Ad Units in its Network.

 


AdSense

Suppose you are a Blogger, and you want to start earning from your site. The Best way is to put up Ads on the empty spaces on your site.

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The spaces on the website where the developer wishes to put up ads are known as an Ad Unit. As seen in the picture, one can see two Ad Units, one on the top right corner which is a wide Ad and then just below it which is a standard Square tile Ad.

I won’t go into the details into the process involving in linking your site with AdSense since it is beyond the scope of the post. But I’d like to introduce some key concepts that help Google to devise Algorithms for Ad Placements.

There could be ‘n’ Ad Units on a website. If a developer wishes to show similar kind of Ad on two Units, it can combine it to form a ‘Placement’. Such combinations of Ad Units and/or Placements make up an Inventory. One who wishes to put up the Ads, signing up for Google will create ‘Line Items’ which are analogous to ‘Orders’, along with it, one also has to put up a ‘Price’ for the Line Item, which is the amount that the Blogger would earn whenever a user encounters an Ad on its website. That’s how he can earn revenue.

Now let’s try to understand the Process. The company is unaware of the placement of the Ads, i.e. it doesn’t know where its Ads have been shown. It does the process discussed earlier i.e. It decides a Budget for a Campaign and a price that he is ready to spend per Click / Impression.

Now, when the User visits any website under the network, it looks for all the Line Items on that site. Based on the multiple factors such as Configuration of the Line Item, demanded Price, Traffic of the Website, Geographical location and all, it takes out the BEST Ad that could be shown to the user at that point of time.

For eg., If ‘Garnier’ has a new line up of products especially for Men in India. Then it would definitely target Men more than Women. Also, if a visitor is not from India, he would not want to show an Ad to them. These are the ‘Filters’ that the Client sets while signing up for AdSense. Once a Client has placed the Orders, there is not much that is left to do on their part, except paying the Bill.

 


AdExchange

AdSense and AdExchange are Siblings. In Fact, one needs to have an AdSense account to actually sign up for AdExchange. It’s also a platform made specifically for Publishers.

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The revenues generated from AdSense and AdExchange can be dramatically different. The process of signing up remains the same as in AdSense. But, Google AdX is a bit different. It is a true ad exchange where partners bid over inventory (usually providing better results for sites with ad inventory on these exchanges); however, Google is very protective of their ad exchange — and the impressions ads they serve.

There are two major competitors for a Line Item on any given Site,

  • The generic Client who has a higher CPM / CPL and the best Budget for serving the Ad among all
  • AdExchange Client

Whoever has a higher Bid, and passes all the Filters put up by the owner of the Website would be allowed to display their Ads. The main Aim is to display genuine Ads to visitors which help both the Publisher and the Advertisers to gain maximum revenues.

Google Ad Exchange revenue is often higher. First – it’s important to understand why this is. Google’s Doubleclick for Publishers Ad Exchange is Google’s real-time bidding environment for your ad inventory.  Each ad is sold in a lightening-fast auction, so you get the best price for every ad you sell via the exchange. This doesn’t mean necessarily Google CPM rates (cost per thousand impressions) are higher, but that doesn’t really matter anyway, it means that advertisers could be potentially bidding more for available inventory.

Putting your ads up for auction is a far more efficient method of monetizing ad inventory than the old way of giving all your ads to just one ad network (who would most likely just auction off what they cannot sell themselves anyway).

AdSense is undoubtedly the biggest ad network in the world.  So having AdSense ads compete for each ad impression (against other advertisers), is better than running AdSense on its own.  Creating a bidding war for high-value users means you get the right price for your ads and don’t miss out.

Publishers that want to know how to get Google AdX are probably in for a bit of bad news. This is not an option for some publishers unless they work with a Certified Publishing Partner or have a dedicated Google account rep who has offered this as a possibility. Getting a Google Ad Exchange account is not like signing up for AdSense.

 


This brings me to the end of this Post. Hope all you readers have a good understanding of the Platforms after reading the post. I tried to summarize all the major points that one needs to know for Getting Started.

Let me know if you still have any doubts or Questions, just post it in the Comments section below. If not then don’t forget to like the post 😉

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