The History Of Adwords

The Internet was invented, more or less, back in the sixties, by this guy who thought that it would be useful if scientific and military computers could talk to each other. So, with a bit of help from some of his friends, he started the ball rolling.

People came along and came up with ways of making it better, but until 1990, unless you knew where to look, you couldn’t actually find a website.

Then this other bloke invented something called “Archie”, the world’s first search engine. It wasn’t really intended to be a big commercial thing, he only wanted to find some bits and pieces for himself, but within a few days, there were twenty or more people using it. By 1993, it was handling over 100,000 requests per day.

Then, in 1994, two other blokes created Yahoo! (they were originally going to call it “Jerry and David’s Guide to the World Wide Web”, but decided it wasn’t catchy enough). The timing was really quite good - in 1994, Pizza Hut started accepting online orders (from hungry nerds), the world’s first online bank opened (for rich nerds), you could order flowers (for conscientious nerds) and adult sites started appearing (for… erm… never mind).

The Internet was becoming a good place to sell things, and more and more people were hooking up online.

Then, in 1998, a company called GoTo (which later became known as Overture), decided it could make a big pile of cash by letting businesses bid for positions in its search results. Rather than try to compete with the established companies like Yahoo!, they decided to stick their adverts on the results pages of other search engines. Their biggest client was, funnily enough, Yahoo!

As a result, both GoTo and Yahoo! made a lot of money, since these adverts were usually more relevant than the search results - you wouldn’t spend money on a term that wasn’t relevant to what you did, would you!

Also in 1998, a company called Google was created by two young gents at university. It was a bit different, because it looked at the number of back-links to a website to decide how reliable that website was. This led to Google providing very useful and helpful results, and the uncluttered page with just a search box and a button made it very popular, very quickly.

In 2000, Google saw how well the Pay Per Click (PPC) model was working, and gave it a go themselves, calling their system Adwords. Over the years, they slowly and quietly gained on their rivals, overtaking Yahoo! to become the market leader in 2005.

They’ve really moved on since then, and in the US, Google picked up 64% of the total market share (Yahoo! had 22%) according to Hitwise in April 2007.

The reason? Generally, people seem to find their results to be ‘better’. That is to say, more relevant. It’s interesting then, that often, up to 40-50% of these people click on the paid search results.

So, why is Google’s paid search so good, then? The main reason is that they don’t just put the highest bidder top any more - they reward ‘good’ adverts and penalise ‘bad’ adverts. The result is that users get a better set of adverts, in theory at least.

Google

And it’s that point that forms the basis of this book. Anyone can advertise on Adwords, but to do it effectively, you need to convince Google that your adverts are exactly what the searcher is looking for.

Page last updated by Steve Baker on May 11, 2008 at 7:06 pm.

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