If you conduct Google AdWords campaigns, this article may be of interest to you. It shows how to use Ruby on Rails to build a reporting system that will help you keep the costs down when bidding on a selection of keywords. It is excerpted from chapter 13 of the book Practical Reporting with Ruby on Rails, written by David Berube (Apress; ISBN: 1590599330).
Tracking Your Ads with Google AdWords (Page 1 of 6 )
According to a 2005 report by PricewaterhouseCoopers, $385 billion dollars are spent on advertising annually. This report estimated that by 2010, worldwide advertising spending will exceed $500 billion. As you can imagine, such a gigantic flow of money requires a similarly gigantic infrastructure. Of course, the most common advertising formats--print, radio, and television--have a relatively long history, with a very entrenched methodology for analyzing how money is spent. On the other hand, web advertising is a relatively new phenomenon, and many organizations do not have a coherent system for tracking Internet advertising.
Perhaps the most popular online advertising system is Google AdWords, which allows people to buy text advertising space in small blocks to the right of Google's main search results. Additionally, Google allows Google AdWords ads to be placed on other web sites using the Google AdSense program, which further increases the potential market of Google AdWords advertisers.
Ads in Google AdWords are priced on a per-click basis, so the more your ad is clicked, the more you pay, and you pay only when people click your ad. Each advertisement has a list of keywords for which it will appear, and a maximum per-click bid on each keyword. (You can find out more about AdWords at http://adwords.google.com.)
Because Google AdWords is a type of Vickrey auction, you pay only what the second-highest bidder paid, so you can bid your maximum without fear of overpaying. However, a number of ads can appear on a single page, with progressively lower bidders receiving progressively lower locations. Some Google AdWords advertisers attempt to bid as low as possible while still having their ad appear on the search results page.
Additionally, advertisers often attempt to purchase obscure keywords or misspelled keywords. In reality, such attempts are often stymied by the fact that keywords without competition usually do not receive many search results, so the total amount of clicks available for purchase is likely low. As a result, advertisers attempt to construct the most attractive ad possible, so they can get more clicks for obscure, and therefore cheaper, keywords.
Obviously, conducting an effective Google AdWords campaign requires some strategy. This chapter's example is a reporting system that will help you optimize a selection of ads, so that each click is as cheap as possible.