AdWords works by selecting targeted keywords and related search phrases (technically known as Latent Semantic Indexing or LSI) into ads created by companies. The advertisements are assigned a bid, based on a dollar amount chosen by the advertiser.
“Small advertisers are big bread and butter for Google but, to date, haven’t flocked to mobile due to the complexities of running search campaigns on multiple devices. On Day 1 of this change, Google will see a huge influx of small business advertisers run on their mobile inventory for the first time. This change will simplify the process … of running on mobile devices and allow them to more easily scale their campaigns beyond simply PC-based paid search,” states Jared Belsky, the vice president of the digital marketing firm 360i.
The search engine’s annual revenue from its approximate 1 million advertisers is $40 billion. But over the last several quarters, Google has seen a steady decrease in its cost-per-click (CPC). In December of 2012, it incurred a 6 percent decrease.
Enhanced campaigns, as the new platform will be known, will give businesses substantially more control over their ads, including pricing and inclusion or exclusion from mobile and desktop devices. The search engine hopes this move will lure more businesses and help to retain current advertisers.