The Google Adwords online advertising program is a pay per click (PPC) advertising method that allows people to promote their products or services online. After a marketer has opened an Adwords account they can set up numerous advertising campaigns and pay Google a predetermined amount of money (set by the marketer) every time somebody clicks a link in one of their advertisements.

Google Adwords advertisers typically gain increased amounts of exposure by increasing the amount of money they pay for each click. Advertisers who are working in lucrative niches are often prepared to pay more money for their clicks; so marketers working in popular big-money niches, such as forex or remortgaging, have to compete with an abundance of competing Adwords users who are also prepared to pay more money per click. It’s a dog eat dog world so the cost per click (CPC) in these niches can be become very high because paying less per click normally results in little or no exposure across the Adwords advertising network. Less exposure=less clickthroughs= less traffic to the advertiser’s site or page—that’s not a formula for online success.

It isn’t all doom and gloom in the world of PPC marketing. Not all niches are so costly (some marketers pay pennies per click) and even in competitive niches the CPC can often be brought down by further defining the keywords and working in a tighter niche.

Although not all PPC marketers use Google Adwords to generate traffic to sales pages the majority of them do and if the revenue generated by clicks that convert to sales is high enough it can easily compensate for wasted clicks if the site has a poor conversion rate.

The PPC nature of Google Adwords can often leave newbie online marketers scratching their heads over its potential as a cost effective advertising option. If the total cost of the clicks received is higher than the total revenue the clicks generated the advertiser will lose money. It’s simple maths and cannot be argued with. But if money is lost the problem probably lies in the destination site’s ability to convert visitors to sales. It is also possible the advertiser may have set a CPC that is too high to be supported by any revenue generated.

Google Adwords is a powerful advertising method. It is also generally accepted to be the reigning (and all time) king of PPC. Many small businesses use Adwords advertising campaigns. Huge businesses do too —why?  Because they have discovered Adwords advertising works for them. It is also worth noting Adwords is Google’s main source of income. That says it all. Would anyone continue to pay for a system that does not work?