Harness the Google AdWords marketplace to guesstimate the value of a keyword or phrase in online advertising.

Google AdWords create what can only be termed an advertising marketplace. You can choose to pay more to acquire more prominence on a results page, or pay less and still see your fair share of eyeballs and clicks until your daily budget is spent. By offering to pay a little more for each click-through, you’ll move yourself up a spot or two in that list of 8 to 10 Sponsored Links on Google results pages.

Surely, then, you could just be sure to pay enough to keep your ad in the top spot? Not so, actually.

In addition to the cost-per-click (CPC) you’re prepared to pay, AdWords pays close attention to the click-through-rate (CTR), the proportion of how many times your ad is shown versus how many times people actually click on it. By carefully balancing the price and effectiveness of ads, Google makes sure the top spots belong to the most relevant and targeted ads, not just those with the deepest pockets.

Now, this might appear at first blush to be a game of poker, and to a certain extent it is. That said, the AdWords Traffic Estimator (see Figure 7-7, later in this hack) is like a silent partner, advising you on your bets (sorry, bids) and guestimating your average position (1.0 is the top spot, 2.0 is the second, and so forth) in that list of ads.

The AdWords Traffic Estimator is an incredibly useful tool for experienced online advertisers and newbies alike. ...

Download Determine the Worth of AdWords Words

PDF format, 1.1MB, 14Pages.

Google Hacks
Tips & Tools for Smarter Searching
Tara Calishain & Rael Dornfest
With a New Foreword by
Craig Silverstein, Director of Technology, Google

Google Annual Report 2008

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