AdSense & AdWords – Opposite Sides, Same Coin….

In the Adsense Alternatives introduction, I mentioned that Google were really the first company operating in the PPC market that cottoned on to the idea that there should be a balanced approach to PPC, that there are always two sides to every coin.

They realized that trying to attract advertisers was all very well, but that such advertisers needed somewhere to place their ads.

PPC advertising had first risen to popularity back in the ‘dot.com’ boom days of the 1990’s, but the technology at that time was not sophisticated enough to prevent rampant click fraud, so PPC was dropped by pretty much everybody as a valid advertising business model.

The only company that was willing to stick with the concept for the long term was one of the original PPC pioneers, GoTo.com. They later became (better) known as Overture.com who were in turn purchased in 2003 by Yahoo.

Google first launched themselves into the PPC business with their AdWords program in 2000 but it was only mildly successful until mid 2003, when they launched the ‘other side of the coin’ service, AdSense.

With both AdWords and AdSense in place, Google had thus become the first company to fully establish a balanced and profitable contextual advertising business model.

The AdWords programs allowed people and businesses to create two or three line text advertisements for their products and services. These adverts would contain key words or phrases that related to whatever it was that they were selling.

So far so good, but this was really what everyone else was doing too, and was only one half of the equation that needed to be addressed and solved.

Yes, it allowed people and companies to buy advertising space and to present their commercial message, but to whom?

How could Google ensure that these ads were being seen by the people that they were aimed at, potential buyers of the products or services that were being sold?

The key to the whole thing was the ‘other side of the coin’. That is, Google were focused on making sure that advertisers got the maximum ‘bang per buck’ by putting their ads in front of only the most targeted potential customers.

After all, if I am advertising dog food in my AdWords ad, I am going to make very few sales if the only people that see it are interested in buying a new car or house.

The answer that Google came up with was AdSense and ‘contextual advertising’. There is little doubt that it was this one program that catapulted Google to the position in which they find themselves today, still able to shake every available dollar out of the market.

AdSense was (and still is) a program where website owners register their site or blog for free, thereby agreeing to carry AdWords ads on their web pages.

The software that ‘drives’ AdSense then locates adverts that are most closely related or tied to the specific topic or subject of the website or blog in question, and then displays these targeted ads that match the topic of the site.

It was (and is) this element of targeting, of presenting only adverts that match the context of the site in question (hence, ‘contextual’ advertising) that really set what Google were doing apart from everyone else, thereby allowing them to grab the dominant position in the market.