Business 2.0 – Magazine Article – Google’s Next Runaway Success
This is interesting: advertising is the necessary evil of media (more evil that necessary in too many cases). But the bright boys at Google have a new way of looking at the problem that works for advertisers and viewers within their parameters of text-only ads.
But AdWords Select’s real genius is the unheard-of value it provides to advertisers. They pay for actual clicks on their advertisements, not each appearance of the ad. The price of an ad, as well as its position on the page (top, middle, or bottom), depends in part on how often the ad is clicked by users. In effect, the better the ad, the less it can cost and the higher on the page it appears. Yes, that’s right. Google wants to make sure that advertising is relevant to searchers, so it rewards advertisers who draw clicks by giving them better positioning. Average clickthrough is about 2 percent, the company claims, five times that of comparable online ads.
Couple that with the online ad insertion system (a credit card and some keywords gets your ad placed without dealing with a sales type) and this is something we may see more of.