MGCR 331 Chapter Notes - Chapter 14: Search Engine Marketing, Adwords, Click Fraud

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Published on 20 Apr 2013
Chapter 14 - Google in three Parts: Search, Online Advertising, and Beyond
Key Info and Terms
- Advertising drives Google’s profits
o Has grown to earn more annual advertising dollars than any U.S.
media company
- 76% of the search advertising business + AdSense network + DoubleClick =
the firm controls the majority of all online advertising dollars.
- Market capitalization: the value of a firm calculated by multiplying its share
price by the number of shares --- > makes Google the most valuable media
company on the planet.
- Majority of revenue comes from advertising, but the firm is also now engaged
in a “wide-ranging multi-front war” – mobile, browsers, etc.
- Success of existing business = massive cash horde --- > fuels experimentation,
innovation, tolerate failure, acquire aggressively, and patiently build new
- Google uses PageRank to rank relevance of websites
o Google does not accept money for placement of links in search results
o Web pages that have more pages linking to them are ranked higher
- Search engine optimization: the process of improving a page’s organic
search results
- Link fraud: creating a series of bogus web sites that link back to the pages
they’re trying to promote (and making the website appear higher on
- Not searching the entire web, searching a copy of the web that is made by
Google an index - uses software to uncover as much information as they can
find spiders, Web crawlers, software robots.
- Can add firewalls, code, or corporate firewalls to keep Google out
- Three factors driving online ad growth trends
o 1. Increased user time online
advertisers are simply following the market
o 2. Improved measurement and accountability
impressions: each time an ad is served to a user for viewing --
- > now companies can track how effective their advertising
instead of guessing. Can see the clicks and the product
purchases or other Web site activity that comes from those
o 3. Targeting
can target consumers based on how they respond to ads
- search engine marketing: the practice of running and optimizing search
engine ad campaigns.
- Google uses mainly text ads keyword advertising: they’re targeted based
on the words in a user’s search query.
o Show up when a user has a purchasing intent -- > makes the ads much
more effective than standard display ads like those on FB.
o Advertisers only pay for results --- they are pay-per-click / cost-per-
click, where advertisers don’t pay unless someone clicks on their ad.
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