Google AdWords is an online advertising service developed by Google, where advertisers pay to display brief advertising copy, product listings, and video content within the Google ad network to web users. [2] Google AdWords' system is based partly on cookies and partly on keywords determined by advertisers. Google uses these characteristics to place advertising copy on pages where they think it might be relevant. Advertisers pay when users divert their browsing to click on the advertising copy. Partner websites receive a portion of the generated income.[3]

AdWords has evolved into Google's main source of revenue, contributing to Google's total advertising revenues of USD $43.7 billion in 2012.[4] AdWords offers services such as pay-per-click (PPC) advertising and cost-per-acquisition (CPA) advertising.[5]

The AdWords program includes local, national, and international distribution. Google's text advertisements are short, consisting of two headlines with a maximum of 30 characters each, a description with a maximum of 80 characters, and a display URL of 40 characters.These are called Adwords expanded text Ads. These mimic what the average search result looks like on Google. Image ads can be one of the several different standardized sizes as designated by the Interactive Advertising Bureau (IAB). In May 2016, Google announced its reformatting of ads to help consumers and advertisers succeed in a mobile-first world. The new format, called Expanded Text Ads, allows for 23% more text. This new format is available on both the Google Search Network and the Google Display network. It features two headlines with 30 characters each, replacing the standard of a single headline with 30 characters. The display URL has been replaced with two 15 character paths, not including the root domain.

Sales and support for Google's AdWords division in the United States is based in Mountain View, California, with major secondary offices in Hyderabad, Dublin, Singapore, Ann Arbor[6] and New York City. The third-largest US facility is the Googleplex,[7] Google's headquarters, which is located in Mountain View, California. Google AdWords engineering is based at the Googleplex, with major secondary offices in Los Angeles and New York.

As of 2011, AdWords represented 96% of Google's revenue.[8]

Features and services

IP address exclusion

In addition to controlling ad placements through targeting audiences based on location and language usage,[9] ad placements can be refined with Internet Protocol (IP) address exclusion. This feature enables advertisers to exclude specified IP address ranges if they do not want their ads to appear there. Advertisers can exclude up to 500 IP addresses per campaign.

AdWords Express

Google AdWords Express is a feature aimed at small businesses that attempts to reduce the difficulty of managing ad campaigns by automatically managing keywords and ad placement.[10] AdWords Express was previously known as Google Boost.[11]

AdWords Express also supports small businesses that do not have a website by allowing them to direct customers to their Google Place page.[12]

Google Partners

Google Partners, originally known as Google AdWords Certification Program or Google AdWords Certification, is a Google AdWords partner certification program. To become AdWords certified, clients need to pass the AdWords Fundamentals exam and one of the other Advanced AdWords exams such as Search Advertising, Display Advertising, Video Advertising, Shopping Advertising, and Mobile Advertising.

It replaced Google Advertising Professionals in April 2010, with updates ranging from amended criteria for entries and changes to the exam requirements.[13] The program continues to certify consultants to help the increasing number of Google AdWords clients with AdWords campaigns. The program contains one fundamental exam and five advanced exams.

In order to be individually qualified, a person must pass the program exams. The AdWords qualifications received vary based on which advance exams the individual passes.[14] Google Partners must continue with their best practices by engaging with ongoing professional development. One accredited individual must be certified (two individuals for Google Premier Partners) and a minimum spend threshold of US$10,000 over 90 days must be maintained, with a higher spend threshold for Google Premier Partners.[15]

Placement-targeted advertisements (formerly Site-Targeted Advertisements)

In 2003 Google introduced site-targeted advertising. Using the AdWords control panel, advertisers can enter keywords, domain names, topics, and demographic targeting preferences. Based on this, Google places ads on relevant sites within the content network. If domain names are targeted, Google also provides a list of related sites for placement. Advertisers bid on a cost-per-impression (CPI) or cost-per-click (CPC) basis for site targeting.[16]

With placement targeting, it is possible for an ad to take up an entire ad block instead of splitting the ad into two to four ads. This leads to higher ad visibility for the advertiser.

The minimum cost-per-thousand impressions bid for placement-targeted campaigns is 25 cents. There is no minimum CPC bid.


Remarketing is an AdWords feature that allows marketers to show advertisements to users that have previously visited their website. This feature also allows marketers to create different audience lists based on the behaviors of website visitors in order to serve relevant ads to these segmented audiences. Remarketing Lists for Search (RLSA) via Google Analytics became available in Google AdWords in early June 2015, allowing for the use of standard GA remarketing lists to plan traditional text search ads.[17]

A more advanced subtype of remarketing is dynamic remarketing through which advertisers can show past visitors the specific products or services they viewed to further customize the ad experience. This subtype is especially used by e-commerce websites that foster a diverse range of products and services and need to have their remarketing messages relevant to users.[citation needed]

While remarketing is a mainstream practice, it remains to be perceived as an intrusive one to many users as they might feel annoyingly stalked all over the internet. So, it is recommended for AdWords advertisers to dive deep into optimization practices such as frequency capping so that their remarketing efforts won't backfire and build customer dissatisfaction and distress instead of brand awareness and sales.

Ad Extensions

Ad extensions allow advertisers to show extra information with their ads, such as a business address, phone number, or web page links. Ad extensions are created to improve ad visibility and attract clicks. They appear with the Search Network, above search results, and at time on the Display Network.

AdWords shows extensions when it calculates that the extensions will improve the advertiser's campaign performance, or when an ad is ranked high enough for it to appear.

Manual extensions

  1. App extensions - Allow advertisers to provide a link below the ad text directing users to a mobile or tablet app.
  2. Call extensions - Allow advertisers to include a clickable phone number in their ads.
  3. Location Extensions - Allow advertisers to show their business address, phone number, and map marker.
  4. Review extensions - Allow advertisers to showcase positive, third-party reviews from reputable sources.
  5. Sitelinks extensions - Allow advertisers to add additional links below their ads.
  6. Callout extensions - Allow advertisers to add additional descriptive text.
  7. Structured Snippet Extensions - Allow advertisers to add up to two predefined headers (product or service) like brands or degrees.
  8. Price Extensions - Allow advertisers to display prices for products or services.
  9. Click-To-Message Extensions - Allows advertisers to connect with advertisers via SMS apps.[18]

Automated Extensions

Adwords creates and displays automated extensions when the system predicts they will improve performance. Automated extensions include:

  1. Consumer Ratings
  2. Seller Ratings
  3. Previous Visits
  4. Dynamic Sitelink Extensions
  5. Dynamic Structured Snippets

Google Click-to-Call

Google Click-to-Call was a service provided by Google which allowed users to call advertisers straight from Google search results pages. Users entered their phone numbers and Google would connect the call to the advertiser. Google paid for the calling charges. The service was discontinued in 2007.[19] For some time, similar click-to-call functionality was available for results in Google Maps. In the Froyo release of Google's Android operating system, certain advertisements included a very similar functionality. In iOS, phone numbers are automatically recognized as such. Web developers can also provide direct links to the Phone application, providing similar functionality.

Google now offers a mobile click-to-call function which allows searchers to call a business directly rather than going to their website.

Google Adwords Customer Match

Due to the influence of brand messaging on consumer purchasing habits, Google expanded Adwords to include a Customer Match service. Customer Match allows advertisers to show ads to customers based on data they share with Google, as well as allowing advertisers to bid and create ads tailored to customers.

AdWords distribution

All ads on AdWords are eligible to be shown on Google's search engine. Advertisers also have the option of enabling their ads to show on Google's partner networks. This "search network" includes AOL search, Ask.com, and Netscape.

The "Google Display Network" (GDN), formerly referred to as the "content network," shows AdWords ads on sites that are not search engines. These content network sites use AdSense and DoubleClick, the other side of the Google advertising model. AdSense is used by website owners who wish to make money by displaying ads on their websites. Click-through rates on the display network are typically much lower than those on the search network and quality score for Display Network is calculated separately from Search network.[20]

Further, Google automatically determines the subject of pages and displays relevant ads based on the advertisers' keyword lists. AdSense publishers may select channels to help direct Google's ad placements on pages to increase the performance of their ad units. There are many different types of ads that run across Google's network including text ads, image or banner ads, mobile text ads, and in-page video ads. In February 2016, Google began removing right-hand side ads from AdWords on a desktop in favor of only showing text ads above and below organic search results. Product Listing Ads and the Google Knowledge Graph were unaffected, and can still appear on the right-hand side.

Google AdWords' main competitors are Yahoo! Search Marketing and Bing Ads (formerly Microsoft AdCenter).

AdWords account management

To help clients with the complexity of building and managing AdWords accounts, search engine marketing agencies and consultants offer account management services. This allowed organizations without advertising expertise to reach a global online audience. To help regulate Best Practices for AdWords Management, Google implemented the Google Partner Program and the Google Individual Qualification Program, both of which require individuals and agencies to meet benchmarks and pass exams.[21]

Google also provides an offline account management software, AdWords Editor.

The My Client Center feature is available to Google Professionals, regardless if they have passed the exam or budget parameters yet. With this feature, a Google professional has access to a dashboard summary of several accounts and can move between those accounts without logging into each account.

The Google Adwords Keyword Planner, formerly the Keyword Tool, is a free AdWords tool which gives estimated traffic-per-month for the mentioned keywords. It provides a list of related keywords expected to be equally successful for a specific website or keyword.

The Google Display Planner is an Adwords tool to identify display network keywords, placements, and topics. It helps in expanding the reach of display campaigns while targeting relevant users for a business.[22]

How costs are calculated in AdWords

The cost of a Google Adwords campaign depends on a variety of factors which include bidding strategies and organization goals. As a result, the amount that an organization needs to spend varies based on industry and the keywords on which they bid. Whenever a user conducts a search on Google, AdWords runs an auction to determine which search ads are displayed on the search results page as well as the ad's position.[23]


Google launched AdWords in 2000.[24] At first, AdWords advertisers paid for the service monthly, and Google would set up and manage their campaign. To accommodate small businesses and those who wanted to manage their own campaigns, Google soon introduced the AdWords self-service portal. In 2005, Google started a campaign management service called Jumpstart.[25]

In 2005, Google launched the Google Advertising Professional (GAP) Program to certify individuals and companies who completed AdWords training and passed an exam.[citation needed]

In 2008, Google launched the Google Online Marketing Challenge,[26] an in-class academic exercise for tertiary students.[27] Over 8,000 students from 47 countries participated in the challenge in 2008, over 10,000 students from 58 countries took part in 2009, about 12,000 students in 2010, and almost 15,000 students from 70 countries in 2011. The Challenge runs annually, roughly from January to June.

In April 2013, Google announced plans to add enhanced campaigns for AdWords to aid with campaign management catered to multiple-device users. The enhanced campaigns were described as aiming to include advanced reports about users. This move has been controversial among advertisers.[28]

In July 2016, Google unveiled "Showcase Shopping" ads. With this format, retailers can choose to have a series of images appear in search results related to various search queries and keywords.[29]

In October 2017, Google revised AdWords daily budget caps, which were previously set at a maximum of 120% of preset daily budgets, to a maximum of 200%. This change was rolled out on the same day it was announced, prompting criticism from paid search professionals, though Google later clarified that this change would affect only short-term campaigns of less than 30 days, and that for campaigns running more than 30 days, overage charges would be refunded.[30]

Legal context

AdWords has generated lawsuits in the area of trademark law (see Google, Inc. v. Am. Blind & Wallpaper Factory and Rescuecom Corp. v. Google Inc.), fraud (see Goddard v. Google, Inc.), and click fraud. In 2006, Google settled a click fraud lawsuit for US $90 million.[31] March 2010, Google was involved with a trademark infringement case involving three French companies that own Louis Vuitton trademarks. The lawsuit concerned if Google was responsible if the advertisers purchasing keywords violate trademark infringement. Ultimately, the Court of Justice of the European Union ruled that Google Adwords were “not a breach of EU trade mark 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.” [32] 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[33] has raised Right to Privacy concerns.[34]

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.[35]

In May 2011, Google cancelled the AdWord advertisement purchased by a Dublin sex worker rights group named "Turn Off the Blue Light" (TOBL),[36] 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.[37] 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 AdWord advertisement.[38]

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.[39]

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 AdWords and other 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 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.[40]


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. The system became much slower, and eventually, it was reverted to MySQL.[41] Eventually, Google developed a custom distributed Relational database management system (RDBMS) known as Google F1 specifically for the needs of the Ad business, which requires strong consistency, high scalability across data centers, and powerful SQL queries.

The interface has also been revamped to offer better workflow with additional new features, such as Spreadsheet Editing, Search Query Reports, and better conversion metrics.

Ad content restrictions

As of April 2008, Google AdWords no longer allows for the display URL to deviate from that of the destination URL. Prior to this, paid advertisements could feature different landing page URLs to that of what was being displayed on the search network. Google explained that this policy change stems from both user and advertiser feedback. The concern prompting the restriction change is believed to be the premise on which users clicked advertisements. In some cases, users were being misled and further targeted by AdWords advertisers prior to this change.[42]

As of December 2010, Google AdWords decreased restrictions over sales of hard alcohol.[43] 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.

Allowed keywords

Google has come under fire for allowing AdWords advertisers to bid on trademarked keywords.[44] 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[45] and in May 2008 expanded this policy to the UK and Ireland. Advertisers are restricted from using other companies' trademarks in their advertisement text if the trademark has been registered with Advertising Legal Support team. Google requires certification to run regulated keywords, such as those related to pharmaceuticals keywords.

Prohibited keywords

Some keywords, such as those related to hacking, are not allowed at all. From June 2007, Google banned AdWords adverts for student essay-writing services, a move which received positive feedback from universities.[46] Google has a variety of specific keywords and categories that it prohibits that vary by type and by country.[47] For example, use of keywords for alcohol related products are prohibited in Thailand[48] and Turkey;[49] keywords for gambling and casinos are prohibited in Poland;[50] keywords for abortion services are prohibited in Russia and Ukraine;[51] and keywords for adult related services or products are prohibited worldwide as of June 2014.[52][53] This has prompted debate among the adult industry with many questioning Google's position as a monopoly.

See also


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  2. ^ "How Google AdWords Works". adwords.google.com. 
  3. ^ "Display Ads, Video Ads, Search Ads & App Ads - Google AdWords – Google". adwords.google.com. Retrieved 2017-01-06. 
  4. ^ "Financial Tables". Google Investor Relations. Archived from the original on February 13, 2008. Retrieved January 31, 2013. 
  5. ^ "Cost per acquisition - AdWords Help". adwords.google.com. Retrieved December 1, 2015. 
  6. ^ Inside Google's Michigan Office - Google - InformationWeek Archived April 3, 2008, at the Wayback Machine.
  7. ^ "InformationWeek News Connects The Business Technology Community". InformationWeek. 
  8. ^ "96 percent of Google's revenue is advertising, who buys it?". 
  9. ^ "What is IP Address Exclusion? - AdWords Help". adwords.google.com. Retrieved June 16, 2010. 
  10. ^ "Google AdWords Express - Easy online advertising by Google". 
  11. ^ "Google relaunches Boost as AdWords Express". 
  12. ^ "Compare AdWords". 
  13. ^ "Google launches additional tools for AdWords clients". Web Pro News. Archived from the original on May 31, 2013. 
  14. ^ "About the AdWords certification - Google Partners Help". support.google.com. Retrieved 2016-11-07. 
  15. ^ How to earn the Google Partner badge, accessed 3 August 2017
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  17. ^ "About AdWords remarketing lists for search ads". Google. Retrieved 13 October 2015. 
  18. ^ Times, Tech (2016-10-21). "New Google Click-To-Message Ads Extension Connects Consumers To Companies Over SMS". Tech Times. Retrieved 2017-01-15. 
  19. ^ Chitu, Alex (July 20, 2007). "Google Discontinues Click-to-Call and Related Links". Googlesystem.blogspot.com. Retrieved June 14, 2013. 
  20. ^ "Quality Score: Definition - AdWords Help". support.google.com. 
  21. ^ "About Google Partners - Google Partners Help". support.google.com. Retrieved 2017-05-31. 
  22. ^ "Google Display Planner". support.google.com. 
  23. ^ "How costs are calculated in AdWords - AdWords Help". support.google.com. Retrieved 2017-05-31. 
  24. ^ "Our latest - Google". www.google.com. 
  25. ^ What is Jumpstart? Archived April 29, 2006, at the Wayback Machine.
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  27. ^ Rosso, Mark; McClelland, Marilyn; Jansen, Bernard (Jim); Fleming, Sundar (April 2009), "Using Google AdWords in the MBA MIS Course" (PDF), Journal of Information Systems Education, 20 (1): 41–49, archived from the original (PDF) on March 5, 2010 
  28. ^ "AdWords Evolves For Enhanced Multi-Device Campaigns". www.webpronews.com. Archived from the original on November 11, 2013. Retrieved May 2, 2013. 
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  33. ^ Fishman, Ross. "Bad Precedent: Lawyer Censured for Buying Google Keywords for Other Lawyers and Law Firms". The National Law Review. Retrieved March 5, 2014. 
  34. ^ "Robert L. Habush and Daniel A. Rottier, Plaintiffs-Appellants, v. William M. Cannon, Patrick O. Dunphy and Cannon & Dunphy, S.C., Defendants-Respondents." (PDF). Case No.: 2011AP1769. Court of Appeals of Wisconsin Published Opinion. February 21, 2013. Archived from the original (PDF) on May 14, 2013. Retrieved March 5, 2014. 
  35. ^ Google, Yahoo bury the legal hatchet, Stefanie Olsen, CNET News.com, August 9, 2004
  36. ^ Turn Off the Blue Light, website Archived June 2, 2013, at the Wayback Machine.
  37. ^ Paterson, Jody (June 24, 2011). "Google tramples sex workers' rights". Victoria Times-Colonist. Archived from the original on October 20, 2011. 
  38. ^ Cusack, Jim (August 7, 2011). "Google u-turn on sex worker group's advert". Sunday Independent. 
  39. ^ No Sex Party please, we're Google Sydney Morning Herald September 13, 2012
  40. ^ David O. Klein & Joshua R. Wueller, Trademark Enforcement and Internet Search Advertising: A Regulatory Risk for Brand Owners, IP Litigator, Nov./Dec. 2016.
  41. ^ Lembo, Phil (May 30, 2007). "eldapo: Let's get a real database". Eldapo.blogspot.com. Archived from the original on March 5, 2012. Retrieved June 14, 2013. 
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  43. ^ Change to the AdWords advertising policy on alcohol Archived March 12, 2012, at the Wayback Machine.
  44. ^ Rosso, Mark; Jansen, Bernard (Jim) (August 2010), "Brand Names as Keywords in Sponsored Search Advertising", Communications of the Association for Information Systems, 27 (1): 81–98, archived from the original on December 10, 2013 
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