Google Adwords and a Blonde joke

By Rajesh Setty on Fri 04 Jul 2008, 8:58 AM – 5 Comments

What has a blonde joke got to do with Google Adwords?

First, the blonde joke:

A blonde and her friend were driving past a gas station. The friend remarked – “These gas prices are going through the roof like crazy. Are you also upset?” The blonde responded immediately – “Actually, I don’t know why people are making a big deal about it. I always put gas for $20 every time. So I don’t have any problem”

Now, the brilliance of the Adwords model:

Companies can advertise on Google Adwords and bid higher to be placed higher on the ad stack. When one or more competitors try to outbid them, they can increase the bid even higher to ensure that they hold the place. If you think about it, every advertiser for a keyword is competing with everyone else to PAY MORE TO GOOGLE than the other player. You can almost visualize them as screaming “Allow me to pay more to you Mr. Google” and we will fight like crazy to ensure that we are the highest payers for using your service.

Now, the connection:

In the last couple of weeks, at three CEO friends told me that they have been advertising on Google Adwords for the last few years. Today they can only buy half of what $10K would have given them two years ago.

Now, the real question:

Unlike the blonde near the gas station, the CEOs know that they are getting less for the same money and they definitely want to explore alternatives. The real question therefore is “What are those alternatives?”

Photo courtesy: Tortuga One via Flickr

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