Google Ads

Last updated

Google Ads
Other namesGoogle AdWords
Developer(s) Google
Initial releaseOctober 23, 2000;23 years ago (2000-10-23) [1]
Type Online advertising
Website ads.google.com

Google Ads is an online advertising platform developed by Google, where advertisers bid to display brief advertisements, service offerings, product listings, and videos to web users. [2] It can place ads in the results of search engines like Google Search (the Google Search Network), mobile apps, videos, and on non-search websites. [3] [4] Services are offered under a pay-per-click (PPC) pricing model.

Contents

Google Ads is the main source of revenue for Alphabet Inc., contributing US$224.47 billion in revenue in 2022.

History

Former logo of the service Adwords logo.svg
Former logo of the service

Google launched AdWords in the year 2000. [1] Initially, Google itself would set up and manage advertisers' campaigns. Google then introduced a self-service AdWords portal for small businesses that wanted to manage their own campaigns.

In 2005, Google started a campaign management service known as "Jumpstart". [5]

In 2007, Google acquired DoubleClick for $3.1 billion. The acquisition was strategically important for Google, providing access to DoubleClick's advanced ad-serving technology and established industry relationships. [6] This deal, while "transforming Google into a powerhouse", later attracted antitrust scrutiny, raising questions about its impact on market competition and digital advertising dominance. [7]

In 2008, Google launched the Google Online Marketing Challenge, [8] an in-class academic exercise for tertiary students. [9]

Google retired the DoubleClick and AdWords brands in 2018 to simplify entry points for advertisers and ad sellers. The core product was renamed Google Ads, providing access to inventory on Google Search, its YouTube video service, the Google Play app store, and AdSense website publisher partners. [10] [11] [12]

Functionality

Google Ads' system is based partly on cookies and partly on keywords determined by advertisers. Google uses these characteristics to place advertising copy on pages that they think might be relevant. In 2023, Google introduced Topics API, which allows targeting ads based on browsing history stored in browser, to Google Chrome. [13] [14] Advertisers pay when users divert their browsing to click on the advertising copy. [15] Adverts can be implemented locally, nationally, or internationally.

Google's text advertisements mimic what the average search result looks like on Google. [16] Offering text-only search ads initially, Google unveiled "Showcase Shopping" ads in 2016. With this format, retailers can choose to have a series of product images that appear in search results related to various search queries and keywords. [17] In May 2016, Google announced Expanded Text Ads, allowing 23% more text. [18] Image ads in the display network can be one of the several different standardized sizes as designated by the Interactive Advertising Bureau (IAB).

Besides the Google search engine, advertisers also have the option of enabling their ads to show on Google's partner network, [15] members of which receive a portion of the generated income.

Restrictions on ad content

The "Family status" of an ad ("family safe", "non-family safe", or "adult") is set by a Google reviewer and indicates what "audiences the ad and website are appropriate for". This will change at what time, on which page, and in which country an ad can appear. [19]

As of December 2010, Google AdWords decreased restrictions on sales of hard alcohol. [20] It now allows ads that promote the sale of hard alcohol and liquor. This is an extension of a policy change that was made in December 2008, which permitted ads that promote the branding of hard alcohol and liquor.

Some keywords, such as those related to hacking, are not allowed at all. [21] From June 2007, Google banned AdWords adverts for student essay-writing services, a move which received positive feedback from universities. [22] Google has a variety of specific keywords and categories that it prohibits that vary by type and country. [23] For example, use of keywords for alcohol related products are prohibited in Thailand [24] and Turkey; [25] keywords for gambling and casinos are prohibited in Poland; [26] keywords for abortion services are prohibited in Russia and Ukraine; [27] and keywords for adult related services or products are prohibited worldwide as of June 2014. [28] [29]

In March 2020, at the beginning of the Coronavirus crisis, Google blocked all face masks keywords from being eligible for ad targeting as part of a policy to prevent companies from attempting to capitalize on the pandemic. [30]

Cost

Every time a user conducts a search on Google, Google Ads runs an auction in real time determines which search ads are displayed on the search results page as well as the ad's position. [31] The cost of a Google Ads campaign therefore depends on a variety of factors, including the maximum amount an advertiser is willing to pay-per-click of the keyword, and the quality score of the ad (based on its relevance and click frequency and ad extensions).

Although an advanced bidding strategy can be used to automatically reach a predefined Cost per action (CPA), this should not be confused with a fixed CPA pricing model. [32]

Conversion tracking

In addition to tracking clicks, Google Ads provides advertisers an ability to track and report other conversions that happen after the click such as purchases, sign ups or calls. [33] Conversion tracking is implemented by sending an identifier to the advertiser's website as a URL parameter, which is then used by advertiser to send conversions to Google Ads, allowing Google Ads to trace conversion back to the original click for reporting. Google also allows advertisers to install a pixel on their website that sends conversions to the Adwords account. This allows advertisers to target their ads to drive conversions more effectively. For most traffic, Google sends a unique identifier for each click (in a gclid parameter), allowing to determine source of conversion precisely. To comply with tracking restrictions on Apple devices, anonymized identifiers that aren't associated with specific person are used (called wbraid and gbraid). Google Ads provides ability to report many of such anonymous conversions by using "modeled conversions" that combine additional customer details to deduce, which user to attribute the conversion to. [34] [35]

Google Ads can be integrated with Google Analytics 4 (GA4), [36] which can improve conversion tracking effectiveness. This integration allows for a more comprehensive understanding of user interactions across different platforms and devices. [37]

Google Ads introduced enhanced conversions to make conversion measurement more accurate. [38]

In 2018, Bloomberg News reported that Google had paid millions of dollars to Mastercard for its users' credit card data for offline conversion tracking purposes. The deal had not been publicly announced. [39] [40]

Technology

The AdWords system was initially implemented on top of the MySQL database engine. After the system had been launched, management decided to use Oracle instead but was eventually reverted to MySQL after the system became much slower. [41] Eventually, Google developed a custom distributed Relational database (RD) known as Google Spanner specifically for the needs of the ad business. The interface offers Spreadsheet Editing, Search Query Reports, and conversion metrics. [42]

Lawsuits

Google Ads have been the subject of lawsuits relating to Trademark Law ( Google, Inc. v. American Blind & Wallpaper Factory, Inc. and Rescuecom Corp. v. Google Inc. ), fraud ( Goddard v. Google, Inc. ), and click fraud.

Overture Services, Inc. sued Google for patent infringement in April 2002 in relation to the AdWords service. The suit was settled in 2004 after Yahoo! acquired Overture; Google agreed to issue 2.7 million shares of common stock to Yahoo! in exchange for a perpetual license under the patent. [43]

In 2006, Google settled a click fraud lawsuit for US$90 million. [44]

In May 2011, Google cancelled the AdWords advertisement purchased by a Dublin sex worker rights group named "Turn Off the Blue Light" (TOBL), [45] claiming that it represented an "egregious violation" of company ad policy by "selling adult sexual services". However, TOBL is a nonprofit campaign for sex worker rights and is not advertising or selling adult sexual services. [46] After TOBL members held a protest outside Google's European headquarters in Dublin and sent in written complaints, Google reviewed the group's website. Google found the website content to be advocating a political position and restored the AdWords advertisement. [47]

In June 2012, Google rejected the Australian Sex Party's ads for AdWords and sponsored search results for the July 12 by-election for the state seat of Melbourne, saying the Australian Sex Party breached its rules which prevent solicitation of donations by a website that did not display tax exempt status. Although the Australian Sex Party amended its website to display tax deductibility information, Google continued to ban the ads. The ads were reinstated on election eve after it was reported in the media that the Australian Sex Party was considering suing Google. On September 13, 2012, the Australian Sex Party lodged formal complaints against Google with the US Department of Justice and the Australian competition watchdog, accusing Google of "unlawful interference in the conduct of a state election in Victoria with corrupt intent" in violation of the Foreign Corrupt Practices Act. [48]

In December 2019, France fined Google €150 million for advertiser suspensions on Google Ads, arguing it had "abused its dominant position by adopting opaque and difficult to understand rules" which it was then free to "interpret and modify" at its own discretion. [49]

In early 2022, Google suspended all ad sales in Russia in response to the ongoing invasion of Ukraine. [50] Over 1,000 Russian businesses that had purchased pre-paid ads, which were neither delivered nor refunded, joined the bankruptcy proceedings of the Russian Google subsidiary. [51] [52]

Controversies

Trademarked keywords

Google has come under fire for allowing AdWords advertisers to bid on trademarked keywords. [53] In 2004, Google started allowing advertisers to bid on a wide variety of search terms in the US and Canada, including trademarks of their competitors [54] and in May 2008 expanded this policy to the UK and Ireland. Until 2023, advertisers were restricted from using other companies' trademarks in their advertisement text if the trademark has been registered with Advertising Legal Support team. [55]

In March 2010, Google was involved with a trademark infringement case involving three French companies that own Louis Vuitton trademarks. [56] The lawsuit concerned if Google was responsible for advertisers purchasing keywords that violate trademark infringement. Ultimately, the Court of Justice of the European Union ruled that Google AdWords were "not a breach of EU trademark law, but that the content of some advertisements that are linked by Google keywords may well be in breach depending upon the particular facts of the case." [57] Additionally, in some American jurisdictions, the use of a person's name as a keyword for advertising or trade purposes without the person's consent [58] has raised Right to Privacy concerns. [59]

In 2013, the Tenth Circuit Court of Appeals held in 1-800 Contacts, Inc. v. Lens.com, Inc. that online contact lens seller Lens.com did not commit trademark infringement when it purchased AdWords and other search advertisements using competitor 1-800 Contacts' federally registered 1800 CONTACTS trademark as a keyword. [60] In August 2016, the Federal Trade Commission filed an administrative complaint against 1-800 Contacts alleging that its search advertising trademark enforcement practices have unreasonably restrained competition in violation of the FTC Act. 1-800 Contacts has denied all wrongdoing and is scheduled to appear before an FTC administrative law judge in April 2017. [61]

IT support ban

In 2018, Google implemented a policy change that restricts the advertising of consumer technical support, including services related to troubleshooting, security, virus removal, internet connectivity, online accounts (such as password resets or login support), or software installation", [62] [63] Google's Director of Global Product Policy, David Graff stated that the policy was intended to "address abuse" and "fraudulent activity" from third-party technical support providers, and that a verification program for legitimate providers would be rolled out "in the coming months". [64] This is yet to manifest, resulting in an effective ban on all IT support and repair related services on the Google Ads platform. [65] Commentators have expressed concerns that this is an attempt by Google to stifle consumers' right to repair electronic devices. [65] [66]

Use by fossil fuel companies for greenwashing

Fossil fuel companies, funders and public relations agencies including ExxonMobil, Shell, Aramco, McKinsey, and Goldman Sachs are among the largest customers of Google Ads. One in five Google Ads for climate-related terms (e.g. net zero, carbon storage, carbon capture and energy transition) were paid by fossil fuel companies. A study by The Guardian and InfluenceMap found that Shell's ads appeared on 86% of searches for "net zero". Over half of users in a 2020 survey could not tell the difference between a normal Google result and a Google Ad. [67] One of the study's authors, InfluenceMap stated "Google is letting groups with a vested interest in the continued use of fossil fuels pay to influence the resources people receive when they are trying to educate themselves. The oil and gas sector has moved away from contesting the science of climate change and now instead seeks to influence public discussions about decarbonization in its favor." [67]

Anti-abortion clinics

A report conducted by the Tech Transparency Project found that women from low-income areas in US cities are more likely to be targeted by anti-abortion crisis pregnancy centers than women in wealthier areas of the city. Many of these crisis centers have portrayed themselves as abortion clinics while advocating anti-abortion measures for pregnant women. [68]

The research was conducted in Atlanta, Miami, and Phoenix with women from three different income brackets, using the phrases "abortion clinic near me" and "I want an abortion." According to the results, Phoenix showed a 16% increase in crisis center recommendations from low to middle income, while there was a 49% difference when compared to high-income areas. [69] [70]

See also

Related Research Articles

Affiliate marketing is a marketing arrangement in which affiliates receive a commission for each visit, signup or sale they generate for a merchant. This arrangement allows businesses to outsource part of the sales process. It is a form of performance-based marketing where the commission acts as an incentive for the affiliate; this commission is usually a percentage of the price of the product being sold, but can also be a flat rate per referral.

Google AdSense is a program run by Google through which website publishers in the Google Network of content sites serve text, images, video, or interactive media advertisements that are targeted to the site content and audience. These advertisements are administered, sorted, and maintained by Google. They can generate revenue on either a per-click or per-impression basis. Google beta-tested a cost-per-action service, but discontinued it in October 2008 in favor of a DoubleClick offering. In Q1 2014, Google earned US$3.4 billion, or 22% of total revenue, through Google AdSense. AdSense is a participant in the AdChoices program, so AdSense ads typically include the triangle-shaped AdChoices icon. This program also operates on HTTP cookies. In 2021, over 38.3 million websites use AdSense.

Click fraud is a type of fraud that occurs on the Internet in pay per click (PPC) online advertising. In this type of advertising, the owners of websites that post the ads are paid based on how many site visitors click on the ads. Fraud occurs when a person, automated script, computer program or an auto clicker imitates a legitimate user of a web browser, clicking on such an ad without having an actual interest in the target of the ad's link in order to increase revenue. Click fraud is the subject of some controversy and increasing litigation due to the advertising networks being a key beneficiary of the fraud.

Yahoo! Native is a native "Pay per click" Internet advertising service provided by Yahoo.

Pay-per-click (PPC) is an internet advertising model used to drive traffic to websites, in which an advertiser pays a publisher when the ad is clicked.

Online advertising, also known as online marketing, Internet advertising, digital advertising or web advertising, is a form of marketing and advertising that uses the Internet to promote products and services to audiences and platform users. Online advertising includes email marketing, search engine marketing (SEM), social media marketing, many types of display advertising, and mobile advertising. Advertisements are increasingly being delivered via automated software systems operating across multiple websites, media services and platforms, known as programmatic advertising.

Search engine marketing (SEM) is a form of Internet marketing that involves the promotion of websites by increasing their visibility in search engine results pages (SERPs) primarily through paid advertising. SEM may incorporate search engine optimization (SEO), which adjusts or rewrites website content and site architecture to achieve a higher ranking in search engine results pages to enhance pay per click (PPC) listings and increase the Call to action (CTA) on the website.

Contextual advertising is a form of targeted advertising for advertisements appearing on websites or other digital platforms, such as content displayed in mobile browsers. Contextual targeting involves the use of linguistic factors to control the placement of advertising material. The advertisements are selected and delivered by automated systems, taking into consideration the context of a user's search or browsing behaviour. As advertisers and marketers increasingly prioritise brand safety and suitability, contextual advertising has emerged as a crucial aspect in safeguarding the reputation and value of a brand.

Keyword advertising is a form of online advertising in which an advertiser pays to have an advertisement appear in the results listing when a person uses a particular phrase to search the Web, typically by employing a search engine. The particular phrase is composed of one or more key terms that are linked to one or more advertisements. The most common form or keyword advertising, focused on payment methods, is pay per click (PPC), with other forms being cost per action (CPA) or cost per mille (CPM).

In Internet marketing, search advertising is a method of placing online advertisements on web pages that show results from search engine queries. Through the same search-engine advertising services, ads can also be placed on Web pages with other published content.

Keyword research is a practice search engine optimization (SEO) professionals use to find and analyze search terms that users enter into search engines when looking for products, services, or general information. Keywords are related to search queries.

Zedo is a US and India-based advertising technology company that provides several online advertising products and services to Internet publishers, advertisers, and agencies. The company was founded in 1999 by Roy de Souza.

<span class="mw-page-title-main">Targeted advertising</span> Form of advertising

Targeted advertising is a form of advertising, including online advertising, that is directed towards an audience with certain traits, based on the product or person the advertiser is promoting.

Quality Score is a metric used by Google, Yahoo!, Facebook and Bing that influences the ad rank and cost per click (CPC) of ads.

<i>Google, Inc. v. American Blind & Wallpaper Factory, Inc.</i> Legal case

Google, Inc. v. American Blind and Wallpaper Factory, Inc., No. 5:03-cv-05340, was a decision of the United States District Court for the Northern District of California that challenged the legality of Google's AdWords program. The court concluded that, pending the outcome of a jury trial, Google AdWords may be in violation of trademark law because it (1) allowed arbitrary advertisers to key their ads to American Blind's trademarks and (2) may confuse search-engine users initially interested in visiting American Blind's website into visiting its competitors' websites.

<i>Goddard v. Google, Inc.</i>

Goddard v. Google, Inc., 640 F. Supp. 2d 1193, is a case in which Jenna Goddard ("Plaintiff") alleged that she and a class of similarly situated individuals were harmed by Google ("Defendant") as a result of clicking allegedly fraudulent web-based advertisements for mobile subscription services ("MSSPs"). The United States District Court for the Northern District of California held that the action was barred by Section 230 of the Communications Decency Act ("CDA") and dismissed the complaint without leave to amend.

<i>Rescuecom Corp. v. Google Inc.</i> American legal case

Rescuecom Corp. v. Google Inc. 562 F.3d 123, was a case at the United States Court of Appeals for the Second Circuit, in which the court held that recommending a trademark for keyword advertising was a commercial use of the trademark, and could constitute trademark infringement.

In pay-per-click advertising (PPC), negative keywords prevent advertisements from displaying for particular keyword phrases. The process of adding in negative keywords to a paid search account is an important part of the optimization process, as it allows for eliminating search queries which are unlikely to convert into a sale. For example, an individual may want to advertise for "hotel in Toronto," but does not want to display ads for the keyword "hotel jobs in Toronto." In this instance, the term "jobs" would be added as a negative keyword. There are few automated tools to predict the negative keywords and make the process simpler. Taking help from tools helps to save time and avoid the possibility of human error.

<i>Rosetta Stone Ltd. v. Google, Inc.</i> U.S. court decision

Rosetta Stone v. Google, 676 F.3d 144 was a decision of the United States Court of Appeals for the Fourth Circuit that challenged the legality of Google's AdWords program. The Court overturned a grant of summary judgment for Google that had held Google AdWords was not a violation of trademark law.

Google France SARL and Google Inc. v Louis Vuitton Malletier SA (C-236/08), also known as Google v. Louis Vuitton was a landmark decision in which the European Court of Justice (ECJ) held that search engines operators such as Google do not themselves infringe trademark rights if they allow advertisers to use a competitor's trademark as a keyword.

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