The funny thing about Adwords

I currently use AdWords and AdSense.  For those that are uninitiated, AdWords you pay and AdSense you get paid (kind of).  What I'm starting to figure out is that I still haven't figured it out.  Needless to say, Google is making a ton of money and I must say that AdWords, although it hasn't paid off yet for my company is about as effective as direct mail.

There are 2 kinds of campaigns you can run with Adwords.  The first consists of "pay per click".  This is where you get charged a nominal fee every time someone clicks on your ad.  Since Aug 31, 2005 I've had 14 individuals "click" on my ad based on the keywords I setup in my campaign.  Those clicks came from 6,018 impressions (times my ad was displayed).  It cost me roughly $0.40/click.

The second type of ad I ran was the "cost per 1000 impressions" ad.  This is much more expensive to run, but can be targeted at specific sites, (fortune.com, etc.) based on your marketing requirements.  I didn't run the ad as long, but ended up paying (for the test) about $38 to reach 6,400 impressions.  30 people clicked on the ad which cost over $1.25 per click.  Cost per 1000 impressions was $5.90.

In essence, I dropped over 12k mail pieces for about $43 of which 44 people opened the piece and threw it in the trash.  Not a good measure of success by any standards.

The questions I have are simple, yet complex moving forward. 

1. Is it more effective to target an ad (cost/impression) or allow an ad to "appear" based on perceived need, i.e. topic on a blog, search engine, etc?
2. Are ads becoming the new "white noise" on the net?  Where they already?
3. Does it make sense to continue any of the programs?

I know most of this requires some insight into what we do and our market, ad quality, etc., but I'm sure marketers and CEO's everywhere are struggling with this issue.

The final question:  Is anyone making money on Ads, specifically on blogs?  For any average blogger the thought of making money off of advertising via AdSense is a pipe-dream, for me it's an experiment as a couple bucks a month don't equal revenue.

Comments

[Sarah]

It seems to be repeated over and over. Blogs aren't where people go looking for ads. My directory gets 10% of the traffic my blog gets, but generates 30x the revenue. Not that it's much but it all helps.

[Neal Patrick]

I've been doing Direct Marketing for 10 years, and have been looking at the history of the business, and we will often have the same questions you have.

We focus on results, so if CPC is where the revenue is, then that's where the ad $ should go.

As far as ads being white noise, I think that's been a problem since they were first invented - it's always about having a unique product, and promoting it uniquely.

Finally, running a small business, I'm sure you have a limited supply of either money or time - the answer to question 3 is based on your limitations.

Good luck.