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Google Adwords

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Forget the hype about what the new cost-per-click AdWords program means for Google, in terms of competing with Overture. What's in the program for advertisers, and how does the cost per click pricing fit in with the existing cost per impression ads? Let's take a look.

The CPC-based program is officially called "AdWords Select," to distinguish it from the original CPM-based AdWords program. You can sign-up via the AdWords Select site listed below.

You can get started with a $5 activation fee, compared to the $50 deposit that Overture requires. However, unlike with Overture, that $5 won't be credited toward any of your ad clicks that you are charged for.

Minimum Bids A Moving Target

As with Overture, you pay by the click. If your ad appears and no one clicks on it, then you pay nothing. Also as with Overture, there's a $0.05 minimum bid amount for ads. You'll never be able to purchase an ad for less than this amount. That's where the differences end. Unlike Overture, Google may force you to pay a much higher minimum bid for terms.

Google sets higher minimum bid amounts for terms it considers to be popular. It makes sense for Google, because if there are only a few people bidding on a term, setting a higher bid amount helps ensure that the company gets the most return on a particular keyword. However, for the advertiser, it's not so great. If no one's bidding on a term, you still may have to pay a premium for it

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