How Pay Per Click Advertising Changed Google Forever

When it comes to pay per click advertising, Google is the undisputed king. It is, in fact, the search engine major which has changed the way marketing is done. But how did pay per click advertising change Google? Worth USD 60 billion presently, Google AdWords, which is the Google’s pay per click advertising offering has seen plenty of twists and turns right down to its present avatar. October 23 is, in fact, the official birthday of Google AdWords which was launched in 2000, just 18 years ago.

  • Started with Just 350 Advertisers

Pay per click advertising at Google started with just 350 advertisers. It was slated to be the first of its kind, providing a self-managed keyword bidding system following the long of a beta test. Pay per click advertising solution AdWords offered the most technologically advanced and complex features, enabling advertisers to design a flexible programme, that fits the online marketing goals and budgets, according to Google co-founder Larry Page.

What’s not so well known is the AdWords was released after another advertising platform called Premium Sponsorships, which involved a human sales team managing the ads. But this soon lost out to Google AdWords. With this PPC advertising solution, Google clocks around 40 thousand searches in a single second, equating 3.5 billion searches in a single day and annually, around 1.2 trillion. Consider that at one point of time, Google just clocked 20 million searches per day. Now, it is the undisputed king of search engines thanks to this PPC solution.

  • AdWords Adds Profits

Google’s revenue from AdWords and ads across mobile devices is a reason for its Q-O-Q growth. In 2016, the search engine giant posted an operating profit of USD 6.8 billion on a revenue of USD 21.2 billion. Additionally, Google AdWords was the first to use a CPM model. But it soon realised the advertisers wanted a cost per click model. This is what set Google apart from the rest of the gang. For the first time in the history of PPC advertising, businesses would only pay for ads, when someone interacted with their advertisement.

In just a span of two years since its inception, Google AdWords expanded to Tokyo and Sydney, where their first client was eBay Australia.

  • AdSense is Born

In March, 2003, Google launched AdSense. It all began when Google acquired Applied Semantics, which advanced the AdWords service technologically. In just one year after that, in 2004, Google filed an initial public offering of Class A common stocks amounting to over 19 million valued at USD 85 each, compared to the present price of USD 993 approximately.

  • The Launch of Google Analytics

In November, 2005, Google Analytics was launched based on technology by Urchin, a Google acquired company which merged with the search engine giant that same year. In 2005, the quality score was introduced as well. In the years that followed, Google revised and updated the quality score several times over. Rather than just limiting it to keyword analysis, landing page load time was also added to the quality score in June 2008.

In August of the same year, the quality score ran automatically for every search query.

2013 further saw the launch of enhanced campaigns for cross-device campaigns, Keyword Planner and remarketing lists for search ads. In October 2013, estimated total conversions were outlined. A year later, website call conversions and ad customisers were launched. Finally the call only campaigns were announced. This was followed in 2015 by the Universal app campaign type, and Native Gmail Ads. Then September 2015 saw the Innovative Customer Match feature, launch of remarketing lists for Google shopping and Smart Goals. With each advance in technology, Google’s PPC offerings did not remain behind. The Google AdWords app for iOS was also launched. 2016 saw the launch of expanded text ads and 2017, the replacement of standard text ads with expanded text ads. In February 2017, a price extension update was also launched.

  • Looking to the Future

With every step forward, Google  became as intricately complex and personalised as its PPC offering. Google is continually known for pushing the envelope, what with Instant Answers, the Knowledge Graph and SERP analysis at deeper levels. Personalised ads also are set to change not just PPC, but marketing as well. Shopping ads are also set to hold more real estate in the SERP positioning.

Google is also evolving with changing customer requirements. An advancement in audience targeting options rivalling Facebook are in place. AdWords remains the king of online ads and propels Google to become a billion dollar business and in 2014, Google reported ad revenues totalling more than USD 62 billion.

Overall, search advertising accounts for more than half of the internet ad spend. It topped USD 27.5 billion in 2015 in the US, according to IAB. This includes ad spend on Yahoo and Bing. But thanks to its PPC offerings and massive hold on the audience, Google maintains close to 64% of search share on desktop and close to 90 percent of mobile in the United States.

In just a span of 15 years, Google has grown AdWords base from 350 in beta stage to more than 1 million. Google’s pay per click advertising model did not spring fully formed. It was iterated and tested constantly and has become the dominant ad paradigm of its time. In 2001, the Google ad revenue hit USD 85 million. At that time PPC models allowed advertisers to buy their way to the listing’s top. Google realised that irrelevant ads at the top made no sense, because no one clicked or made money from advertising. Relevance in PPC ads was a paradigm change that impacted Google too.

Google introduced a CTR as a measure of the ad relevance into the ranking algorithm. Forcing an economy of profit and relevance to the pay per click advertising model was a contribution that shaped not just marketing in general, but Google specifically as well. It turned Google into a money spinner. Concepts like Page Rank and introducing relevance in the pay per click advertising model were the turning points in the history of Google. It also shaped the search engine giant into the market leader it is today.