Is Adwords for you?

Adwords is Google's way of earning source of revenue. AdWords offers pay-per-click (PPC) advertising, and site-targeted advertising for both text and banner ads. It includes 5 lines consisting of the following: headline, 2 lines for the description of the headline, the url, and destination url.

Pay-Per-Click advertisements (PPC)
Advertisers specify the words that should trigger their ads and the maximum amount they are willing to pay per click. When a user searches Google's search engine on www.google.com, ads for relevant words are shown as "sponsored links" on the right side of the screen, and sometimes above the main search results.

The ordering of the paid listings depends on other advertisers' bids (pay for placement P4P) and the "quality score" of all ads shown for a given search. The quality score is calculated by historical click-through rates and the relevance of an advertiser's ad text, keyword, and landing page to the search, as determined by Google. The quality score is also used by Google to set the minimum bids for an advertiser's keywords.

The auction mechanism that determines the order of the ads has been called a "generalized second price" auction. It is a variation of the Vickrey auction.

Site targeted advertisements
In 2003 Google introduced site-targeted advertising. Using the AdWords control panel, advertisers can enter keywords of interest, and Google offers to place ads on what they claim are relevant sites within their content network. Advertisers then bid on a cost per mille (CPM) basis for placement. Advertisers can also enter domains directly. Google will provide a list of related sites that you can select along with your entered site.

Site targeting campaigns are mainly designed for branding purposes, as the ROI will almost always be considerably lower than a traditional content-targeted campaign. Your ad will take up the entire ad block (as opposed to being 1 of 4 ads in a traditional AdSense ad unit), which will make it more prominent but cost quite a bit more.

The minimum CPM you can set on a Site-Targeted campaign is 25 cents.

The Google adwords has tools for you to manage your campaign. You also have the freehand to control your budget per bid and per day. So, if you want to bring more traffic to your site and eventually convert this traffic to more sales, try google adwords and make sure to consider your advertising budget.

Source: Wikipedia