A Brief History Of Google Adwords


Google is the undisputed grandfather of Pay-Per-Click Advertising – a platform driven by it’s equally as unshakeable reign as king of the search engines. Worth a staggering $60 billion today, the story of Google AdWords’ 15 years in the business has certainly been filled with plenty of twists and turns. So as we prepare for October 23rd (the official birthday of AdWords) we dive into the days of Google’s past.

August 2000 – The launch of AdWords and Premium Sponsorship

The launch of AdWords (with just 350 advertisers) would be the first of its kind – offering a self-serve keyword bidding system following the roll out of a month-long beta test.
“AdWords offers the most technologically advanced features available, enabling any advertiser to quickly design a flexible program that best fits its online marketing goals and budget”.
– Larry Page, Google Co-Founder and CEO
However what’s not very well known if that AdWords was actually Google’s second advertising platform, the first of which was called Premium Sponsorships, which was released to the world shortly before AdWords in August 2010. Premium Sponsorships involved a human sales team managing premium sponsorship ads sold on a Cost per Impression basis. These ads would appear in the prime position of the search results, with the self-managed Google AdWords adverts appearing to the right hand side (where they’ve only just been eradicated). Despite AdWords position as underdog to the premium sales team, for years it would be preferred by users over and above Premium Sponsorships.

October 23rd 2000 – The launch of Google AdWords

Today Google churns out a plain amazing 40,000 searches per second, equating to 3.5 billion searches per day and 1.2 trillion each and every year. By comparison, life for Google at the turn of the century used to be so much simpler – with the engine processing just 20 million searches per day. Also complicating the landscape of today is the shift from pure desktop, over to mobile, tablet and across Google-owned platforms such as YouTube; mobile app adverts are delivered by a dedicated mobile app network (AdMob), while on-website ads are handled by the Google Display Network.
While Google holds on tightly to the exact details as to the breakdown of their income, it’s well known that AdWords and advertising across mobile devices is a significant force for Google’s growth quarter on quarter. As of 2016, the company posted an operating profit of $US6.8 billion on a revenue of $US21.2 billion.

February 2002 – In-steps CPC Pricing

Google AdWords was at first using only a CPM pricing model, however they soon came to realise that advertisers wanted a cost-per-click (CPC) model. This definitively set Google aside from the competition. For the first time businesses would only pay for advertising when someone interacted with their advert.
October 2002 – AdWords expands its physical locations and opens its second office in Sydney, Australia (with the first being in Tokyo, Japan). Their very first client would be eBay Australia.
March 2003 – Google AdSense is launched
April 2003 – Google acquired Applied Semantics, which had technology that advanced the AdWords service
August 2004 – Google filed its IPO of 19,605,052 shares of Class A common stock, valued at $85 (compared to today’s price of $993.27)
November 2005 – Google Analytics is launched, based on the technology behind Urchin, a company Google acquired in March 2005

2005 – The quality score is introduced

At first the quality score followed a simple two state structure…
Active Keywords: your bid was sufficient and your ad would be displayed.
Inactive Keywords: your ads wouldn’t run. You had two options to fix this: increase the bid, or improve your ad.
Before which time advertisers could simply spend money to get to the top, creating potential for low quality adverts and poor user experiences. In the years since Google has revised and updated its quality score numerous times over.
February 2007 – The quality score welcomes ‘Poor, OK & Great’ markers
June 2008 – Landing page load time is added to the quality score
August 2008 – The quality score is instantly calculated when the search query is ran
April 2013 – Enhanced campaigns are launched for cross device campaigns
May 2013 – The Keyword Planner launches, stepping in the place of the retired Keyword Tool in AdWords
June 2013 – Remarketing lists for search ads (RLSA) are launched for all advertisers following 12 months in beta
October 2013 – Estimated Total Conversions outlined
August 2014 – Website Call Conversions are announced
September 2014 – Ad customizers are introduced
February 2015 – Call-only campaigns announced
May 2015 – Google confirms the long awaited news that mobile search volume has finally surpassed desktop search volume for the first time, spanning 10 countries, including the United States and Japan
May 2015 – Universal App Campaign type is announced
September 2015 – Native Gmail Ads are launched
September 2015 – The innovative Customer Match feature is announced on the Advertising Week’s Times Center Stage in New York City
October 2015 – Remarketing Lists for Google Shopping are introduced
December 2015 – Google introduces Smart Goals
January 2016 – The Google AdWords app for iOS is launched

February 2016 – Google eradicates the right-hand rail of ads

Google has been pivotal in driving towards a truly mobile-friendly online experience. They started with warnings that non-mobile-friendly websites would be effectively marked down by the search algorithm, and then took the bold step of wiping out the right hand rail of ads.
July 2016 – Expanded Text Ads are officially launched
September 2016 – Facebook surpasses a milestone of 4 million advertisers – a figure that may be higher than those on Google AdWords
If true, this could signal a seismic shift in the world of online advising, yet this may not have been so surprising, given the social network’s growing power and incredibly advanced targeting abilities.
31st January 2017 – Standard text ads are replaced with expanded text ads
28th February 2017 – A Price Extension Update is rolled out

Looking to The future…
Google is renowned for continually pushing the envelope and as we look forward to the next 12 months experts are predicting:
– A growing importance for the Knowledge Graph and Instant answers, and as such SERPs will need to be understood and analysed on a far deeper level
– Personalised advertising will come to the fore
– Shopping ads will soon be bigger and come to hold more real estate in the SERPs
– An advancement in audience targeting options to rival Facebook
– An increasing number of marketers who use both Facebook and Google together – Facebook to drive awareness and Google to remarket to convert awareness to leads and sales.
Despite these predictions, the only thing that can ever be said with certainty about the future of Google AdWords is that it’s decidedly uncertain.
Here’s to another decade and a half of Google AdWords, in all its unpredictable glory!

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