For less than the monthly cost of a typical Starbucks habit,  you can run a small advertisement on Google, the most popular search engine in the world. The company says that it displays results on 200 million searches per day through its own very popular website and distribution partners such as Yahoo, AOL, and Earthlink. The advertising program is called AdWords and we first recommended it in Feb. 2001 .

Two years later, the program is even better, and we continue to heartily recommend it for financial institutions of all sizes, but especially for smaller credit unions and community banks with small to non-existent online advertising budgets. We’ve used the program ourselves for more than two years and can attest to its ease of use. Although we don’t track actual sales results closely, we are pleased with the traffic generated.

AdWords is billed as self-service, and it is. Ten minutes after reading this paragraph you could have an ad running on Google. Then, whenever someone typed “yourtown” and “bank,” your ad would show right next to the search results.

AdWords spots appear on the right side of the search results and are clearly labeled as Sponsored Links. The first four or five appear “above the fold” depending on the size of your monitor and the screen resolution selected. A maximum of eight ads are shown on each page of search results.

How it Works

1.       Set up an account at <adwords.google.com>. Advertising costs will be billed monthly to a credit card.

2.       Type your ad copy into the template provided. You have 25 characters (including spaces) for your title, two 35-character lines for ad copy, and 35 more for the displayed URL.* A total of just 130 characters to be approved by marketing, legal, and compliance, a significant cost savings.

*You also have 1024 hidden characters for hyperlink

3.       Choose the keywords or phrases to trigger the display of your ad. Google allows very precise word/phrase selection so you aren’t buying impressions on “blood bank” searches. The company also provides tools to choose and estimate costs on appropriate keywords.

4.       Decide what you want to bid for placement of each keyword (you can either choose different bid amounts for each keyword, or use the same maximum bid amount for each). Note: It’s an auction environment similar to eBay. You specify a maximum cost per click (CPC) and Google automatically raises your bid to $0.01 above the next highest bidder.

However, the formula for ad position is not as straightforward as an eBay auction. The top bidder may not be shown first. Google uses a proprietary formula that weighs relevance, as determined by actual click-through history, when determining ad position.

Since Google is paid per click, it maximizes revenues by placing top-rated ads in the best slots. For example, if Citibank pays $0.25 per click to advertise under “online banking” and Joe’s Bank pays $5.00 per click, Citibank will likely get the top spot. Why? Citibank’s 1,000 clicks per day will generate $250 for Google, while the sole curiosity-seeker clicking on Joe’s Bank will only put $5 in Google’s coffers. Most other search engines, including Overture, use a pure auction environment, with placement determined solely by bid amount.

5.       Decide if you want to limit your ad to certain languages and/or countries.

6.       View an estimate of how much your campaign will cost each day/week/month.

7.       Enter the maximum amount you’re willing to spend per day and across the entire campaign (you can always add more; Google sends an email when you are within 10% of your budget maximum).

That’s it. No graphics, no copywriters, no media buyers, no monthly minimums, and no set-up costs. You’ll pay a minimum of $0.05 per click, but for common words you’ll be up against national competitors, so for hot areas such as mortgages, expect to pay as much as $1 or more per click.

We recently tested an AdWords buy for “mortgage” . For a top-placing ad (position 1 or 2), Google estimated costs of $2.71 per click for an 1,100 clicks per day; a total cost of $90,000 per month. And that’s just for one keyword. However, if you limited your ads to targeted niches, such as “mortgages New Jersey” (see below) you would still pay around $3 per click, but you might only get a few clicks per day, resulting in advertising costs of $200 to 300 per month.

The top Google AdWords ad on
 “mortgages New Jersey” (June 9, 2003).

Another side benefit: instant feedback on which keywords, headlines, and URL combinations attract the most click-throughs. You can change ads very simply just by choosing “edit” in the control center and typing new text. You can also use Wordtracker.com or Overture to research search-term popularity.  You can also mix and match using our keyword selection tool.

For more information

We highly recommend 21 Ways to Maximize ROI on Google’s AdWords Select, a 124-page ebook by Andrew Goodman of Page Zero Media. The $49 publication can be downloaded at www.page-media.com .