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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).
The first documented attempt at keyword advertising was 1996, by the search company OpenText, just a few years after the first attempt at banner advertisements. However, the project was soon abandoned.
In 1997 Yahoo!, through its partnership with Flycast Communications, successfully launched banner advertising based on keyword searches. Their concept originated from discussions in late 1996 with Chip Royce, head of online marketing for InterZine Productions of Boca Raton, Florida, who suggested that ads around keyword results would provide more effective results for advertisers. In 1997, Yahoo! obliged by placing targeted ad banners when the keyword "Golf" was searched by Yahoo! users. Yahoo! later turned this opportunity into a formal marketing program for its entire customer base and promoted this in a July 1997 article in the now defunct 'Internet Week' magazine.
In 1998, GoTo.com launched the first commercially successful keyword auction model, with a patent on the concept issued in 1998. [1] [2] [3]
In 2000, Google was the true one to benefit from it by creating AdWords. creating a way for companies to pay to have their advertisement on Google as well as bid for keywords. Finally, in 2002, the way we know how ads work today was created when Google started to promote companies based on how much they were willing to pay Google overall, not including the keyword bids. Solidifying the way advertisements are used and created on the web to this day and is constantly improving so that it’s getting smarter so that companies can get more customers.
Google Ads is the most well-known keyword advertising platform. Google displays search ads specifically targeted to the word(s) typed into a search box on the results page, and these keyword cause targeted ads also appear on content sites based on Google's system's interpretation of the subject matter on each page of the site. This is known as contextual advertising. Other search engines offering keyword advertising include Yahoo! Search Marketing, Bing Ads, and Looksmart, along with many others.
A less common type of keyword advertising hyper-links individual words within the text of a page to small pop-ups displayed by mouseover. Advertising of this type is offered by Kontera, Vibrant Media, and LinkWorth. Kontera's version is named ContentLink, Vibrant Media's version is called IntelliTXT [4] and LinkWorth's version is called LinkWords. They refer to their product as in-text placement. Advertisers choosing to test this type will want to exercise moderation to increase Internet user acceptance.
How Companies Use It:
Keyword advertising is a huge component of digital marketing, widely adopted by both small businesses and large corporations. It’s widely used by large companies like Google (Google Ads), Amazon, Microsoft (Bing Ads), and Facebook (Meta Ads) to reach specific audiences and optimize ad spend. These companies rely on keyword targeting to increase viewers, improve conversion rates, and stand out in competitive online marketplaces. With billions in ad spend on these platforms, keyword advertising is a central strategy for reaching targeted audiences and driving customer engagement in today's digital landscape.
Nike
How They Use It: Nike uses keyword advertising to promote specific products like running shoes, apparel, and new releases. They bid on keywords such as "best running shoes," "athletic gear," or even competitor brand names to increase visibility and drive potential customers to their product pages.
Platform: Google Ads, Bing Ads, and YouTube Ads
Airbnb
How They Use It: Airbnb focuses on keywords related to travel destinations and accommodation types. For example, they bid on keywords like "vacation rentals in New York" or "beachfront homes in Florida" to target people planning trips and looking for specific types of stays.
Platform: Google Ads, Bing Ads, and paid search within travel platforms like TripAdvisor.
There have been a number of trademark infringement cases brought by brand owners and companies concerned with how other keyword advertisers used their trademarks or brands in pay-per-click or keyword advertising. Courts in the U.S. and around the world have been slow to issue clear guidance on the issue of whether the use of trademarks as keywords constitutes trademark infringement. This lack of guidance, however, may be partially due to the fact that the majority of keyword advertising cases are settled out of court and do not proceed to trial. This leaves courts unable to make legal decisions on issues brought in these cases. As a result, there are still many unanswered questions on the issue of whether the sale or purchase and use of a trademark as a keyword to trigger Internet advertisements is trademark infringement. [5]
In 2013, the Tenth Circuit Court of Appeals held in Lens.com, Inc. v. 1-800 Contacts, Inc. that online contact lens seller Lens.com did not commit trademark infringement when it purchased search advertisements using competitor 1-800 Contacts' federally registered 1800 CONTACTS trademark as a keyword. In August 2016, the Federal Trade Commission filed an administrative complaint against 1-800 Contacts alleging, among other things, 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. [6]
[7] All the old Google AdWords logos along with the current one.
[8] How it the 1998 GoTo.com site page looked.
[9] Yahoo! search results from 1997.
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. It can place ads in the results of search engines like Google Search, mobile apps, videos, and on non-search websites. Services are offered under a pay-per-click (PPC) pricing model.
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.
An online advertising network or ad network is a company that connects advertisers to websites that want to host advertisements. The key function of an ad network is an aggregation of ad supply from publishers and matching it with the advertiser's demand. The phrase "ad network" by itself is media-neutral in the sense that there can be a "Television Ad Network" or a "Print Ad Network", but is increasingly used to mean "online ad network" as the effect of aggregation of publisher ad space and sale to advertisers is most commonly seen in the online space. The fundamental difference between traditional media ad networks and online ad networks is that online ad networks use a central ad server to deliver advertisements to consumers, which enables targeting, tracking and reporting of impressions in ways not possible with analog media alternatives.
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.
Microsoft Advertising is an online advertising platform developed by Microsoft, where advertisers bid to display brief ads, service offers, product listings and videos to web users. Provides pay per click advertising on search engines Bing, Yahoo! and DuckDuckGo, as well as on other websites, mobile apps, and videos.
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.
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.
Social network advertising, also known as social media targeting, is a group of terms used to describe forms of online advertising and digital marketing that focus on social networking services. A significant aspect of this type of advertising is that advertisers can take advantage of users' demographic information, psychographics, and other data points to target their ads.
Performance Marketing, also known as pay for performance advertising, is a form of advertising in which the purchaser pays only when there are measurable results. Its objective is to drive a specific action, and advertisers only pay when that action, such as an acquisition or sale, is completed.
Quality Score is a metric used by Google, Yahoo!, Facebook and Bing that influences the ad rank and cost per click (CPC) of ads.
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.
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.
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.
Lead validation is the process by which sales leads generated by internet marketing campaigns are separated from other types of conversions. Lead validation is crucial for effective internet marketing management; without it, companies can neither accurately evaluate the results of, nor efficiently improve, their SEO, PPC, display advertising, email, content marketing and social media campaigns.
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.
Advertising revenue is the monetary income that individuals and businesses earn from displaying paid advertisements on their websites, social media channels, or other platforms surrounding their internet-based content. In September 2018, the U.S Internet advertising market was estimated to be worth $111 billion, with market share being held mostly between Google, Facebook, Amazon, and Microsoft. These companies earn revenue through online advertising but also have initiated pathways for individual users and social media influencers to earn an income. Individuals and businesses can earn advertising revenue through advertising networks such as Google AdSense, YouTube monetization, or Outbrain.