AdWords is 15 years old. Launched on October 23rd 15 years ago with this press release, it's Google's largest source of income that fueled the company to become the titan it's known for.
Google is one of the few internet companies that changed how people see the web. With AdWords, the company was changing the landscape of digital marketing landscape using it's self-serve keyword biding system.
When AdWords was first launched, Google's co-founder Larry Page said of the ad product, "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."
Google was boasting 20 million searches per day on Google.com when AdWords was born. At that time, it had 350 advertisers. In 2015, its Search accounts to at least 3 billion queries per day, and it's having more than one million AdWords advertisers generating tens of billions of dollars revenue for the company.
AdWords was actually Google's second advertising program. The first was called Premium Sponsorships, and it was launched just months prior to AdWords. The system used a direct sales team that sold the premium sponsorship ads on a CPM basis.
AdWords was initially available only on the right sidebar. At the time, ad spots above the search results were only reserved for Premium Sponsorship ads. But as AdWords gained popularity and usage thanks to its self-serve system, in just a matter of years, it absorbed Premium Sponsorship and became Google's primary main source of income.
This propelled the company to become a multi-billion dollar business and a conglomerate company with Alphabet.
A Battle To The Top
Google has come a long way before becoming the company it is known for. When the internet was young, people have struggled to find the thing they want. Yahoo! debuted its well-known Directory to solve this issue, making it one of the first internet companies that became successful.
Internet directories were once the center of the web's empire. Yahoo! that was at the peak, was the "Google of the 1990s".
But as Google introduced its own search engines with ever-growing sophisticated algorithms, it's slowly but steadily changed how people search the web. This eliminated most of the needs of an internet directory. It didn't take long for Google to even make other search engines available at the time, its alternatives.
Read: Yahoo! Directory closes
In the first half of 2015, search advertising accounts for half of all internet advertising dollars spent in the U.S. with $27.5 billion. With Google competing with Yahoo! and Bing, it's still maintaining a healthy 64 percent of search share on desktop and 90 percent of mobile in the U.S..
While Google is winning by a large margin to its closest competitors, Google is still yet to manage its search dominance when the company is faced with an increasing demand from display advertising, particularly on mobile. Google started well on desktop, but when the trends changed to native advertising on mobile and social, The social giant Facebook has overtaken Google on mobile.
To save its source of income that is facing challenges from competitors, mainly those that target mobile users, Google armed AdWords in many ways. The two biggest changes to AdWords in recent years were its way to effectively target mobile users.
The first was the transition of product search to the paid version of Google Shopping in 2012, and the second was the transition to Enhanced Campaigns in 2013 which made mobile a must for advertisers.
With targeting mobile as a priority, Google succeeded in making product listing ads a significant portion of retailers' search spend on Google.
