The Democratization of Market Research Using the Power of Google Adwords

Introduction

Google started life in the information laboratory of Stanford University in 1996 and became a registered private company on September 4th 1998 before becoming a public company in 2004. The mission of Google is stated as follows… “Google’s mission is to organize the world’s information and make it universally accessible and useful.”

In Q1 2009 Google’s reported revenue was $5.51 Billion with 67% coming from its own website properties and 30% coming from Google’s partner websites (referred to as Adsense sites).

The vast majority of people see Google as a search engine when in fact it makes something like 97% of its revenues from selling advertising.

Google is one of the world’s largest media companies. Their advertising model, referred to as Google Adwords, is based upon both keyword based and contextual based search using Google’s powerful algorithms.

In summary Google sells advertising space to any type of organisation or individual. When a search query is performed Google automatically populates the search results page with targeted adverts based upon the keyword used to initiate the search query. Advertisers only pay Google when an advert is actually clicked. Contrary to conventional advertising Google does not charge for the display of an advert.

An in depth understanding of how Adwords works is the key to performing in-depth online market research in almost any field, on a macro or micro level quickly, accurately, over any time period and targeted to almost any language or country and even to specific geographical regions such as within a 50kms radius from Johannesburg and at an amazingly low cost.

This paper presents a case study to show how any individual or organisation can harness this system to effectively create valuable marketing information.

The Google Advertising Model in Brief

The Google Adwords model consists of 2 basic approaches to displaying ads. In both cases Google only charges the advertiser when an ad is actually clicked. Hence the term Pay per Click or PPC advertising. The display of an ad referred to as an “impression” is free exposure.

The Adwords approach which is most commonly used is the keyword based search. In this case a search query is entered into Google and the results of the search are displayed directly within Google…

Example of Search Results Display for Search Query “Maps”

The results of the display are what are known as free or organic search results while the results on the right hand side are actually paid adverts or sponsored links as Google refers to them.

Take note of how Google bolds the actually search query term in all the displayed results.

In simple terms the higher the ad is positioned on the right hand side the more the advertiser will pay Google when an ad is clicked. In practice the positioning in this results ladder is a function of numerous variables.

The second type of search Google uses to display ads is referred to as contextual search. In this situation Google places ads automatically on a partner website rather than on its own search site. The ads so placed are based upon the context of the page on which they appear. The following screenshot is an example… click to enlarge image

Google has “read” the contents of this page and placed appropriate ads on it automatically. If an ad is clicked on this page then the advertiser pays Google who then shares the revenue with the owner of the website… the partner site. This program is known as Google Adsense. Income from this model represents 30% of all Google’s income.

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