Google AdSense together with Google AdWords is a brilliantly conceived advertising program. According to Google, “Google AdSense(TM) automatically delivers text and image ads that are precisely targeted to your site and your site content-ads so well-matched, in fact, that your readers will actually find them useful.” One only pays when an ad on one’s website or weblog is clicked subject to policy guidelines. This is called PPC or Pay Per Click advertising.
Adverts are designed with local classifieds the help of Google AdWords. According to Google, “With AdWords cost-per-click pricing, it’s easy to control costs–and you only pay when people click on your ad.” A lot of people are known to spend huge lots of money on this. Some achieve good CTRs (Click Through Rates) and earn very good income. This helps in letting people know where your website exists and what products or services you offer. Many people even use AdWords for affiliate marketing.
Why do many people lose in AdWords? Basically, one must understand the whole process properly. Once you bid a price and allocate a budget for a campaign (in AdWords), you expect to make a gain (in AdSense). Suppose your campaign gets ‘n’ clicks (in AdWords) spending ‘p’ dollars totally. Supposing these ‘n’ clicks lead to ‘n’ impressions of your site ( which may not happen always i.e., conversion may not be 100%). Now suppose your AdSense earnings at a CTR of 10% are ‘q’ dollars. Now for a gain ‘q’ must be greater than ‘p’. If ‘q’ is less than or equal to ‘p’ at a CTR (AdSense) of 10%, your CTR must increase in AdSense which depends on visitor behaviour and placement of ads at suitable places as well as the type of ads displayed by Google. Ultimately, it is the keyword density which comes into play.
If you are unable to go beyond ‘q’ earnings for a gain, the obvious choice is to reduce your expenditure in AdWords! One of the methods, often suggested, is to have a higher CTR in your AdWords campaign which means your ads should be attractive leading to more clicks. A higher CTR would lead to a better ‘rank’ even if your bid price is lower since it is the product of CTR and bid price that matters for a ‘rank’.
One of the easier methods to reduce the bid price without affecting your rank is to use image ads. Generally, some ‘experts’ discourage image ads presumably for obvious other reasons. In fact, the number of image ads used in AdWords campaigns are far less than the demand in AdSense pages. Some free sources are available on the net for making image ads. You can use softwares too. But the one I recommend is MS Excel plus MS Paint. A little effort is needed to make image ads of one’s choice – all free of cost! I have tried with the minimum currency and got good number of impressions and consistent CTRs. So go ahead and plan your strategy afresh.