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Vail, Colo.-Based Company Relies on Google Tool to Market Housewares

Posted on: Tuesday, 16 May 2006, 12:02 CDT

By Kimberly S. Johnson, The Denver Post

May 15--Gary Urdang stopped sending out catalogs for his housewares business two years ago to advertise solely online, based on results from the most popular search engine in the world, Google.

And though it's not widely known, Google -- based in Mountain View, Calif. -- is doing some of its work in Colorado. Google employs more than 20 people at a nondescript office in a building at 8310 S. Valley Highway in Englewood.

A mix of sales and technical associates are charged with maximizing its clients' advertising dollars.

"We're responsible for working with advertisers to drive results," said Tim Moynihan, regional sales manager for the mountain-states division of Google. "We have a team that has grown significantly."

Urdang uses Google AdWords to market his Vail-based business, Always Something Brilliant, on search-results pages. AdWords is Google's leading advertising tool, allowing companies to compete for placement in the "sponsored links" section, which is located on the top and right sides of its search-results pages.

Businesses select key words, or search terms, related to their products and services. They create small, text-based advertisements that are displayed when specific key words are searched. Although many companies come up with their own list of key words, Google's software generates thousands of search terms.

Always Something Brilliant uses 5,000 to 6,000 key words on Google, Urdang said.

One of those terms is "garlic crusher." If a user searches Google.com for that term, a listing for Urdang's company will appear along with other houseware vendors.

"We probably spend about 5 percent of what we used to spend (for the catalog) in terms of advertising costs," said Urdang.

Google determines advertising rates through an auction. The highest bidder for certain key words doesn't always get the top spot on the page. Placement on a Google search page is determined by an undisclosed formula that factors an ad's relevance to the search term. Another factor is its click-through rate, or number of times an ad is clicked on by users.

Although Moynihan said this secret formula "levels the playing field" for advertisers, Google's ranking process is controversial. In March, the company was sued by KinderStar.com of San Jose, Calif., which accused Google of not ranking it fairly in search results.

Another problem facing Google is click fraud. One version of click fraud is to repeatedly click ads of a competitor and raise its advertising cost.

In March, Google settled a class-action lawsuit for $90 million with advertisers alleging their businesses were the subjects of click fraud. Last week, advertisers involved in the case filed a lawsuit to stop the settlement, saying the amount is minuscule compared to most estimates of the click-fraud damage. An Arkansas judge has scheduled a two-day hearing in July on whether to approve Google's proposed settlement.

"We have a very strong effort against (click fraud)," Moynihan said. "We're very interested in making sure we're engaged with advertisers and our user base." In addition, Google is facing mounting pressure from Yahoo and Microsoft, which offer advertising on their search pages, and are introducing new software to lure Google's clients. Yahoo is expected to release its new multimillion-dollar search- advertising software called "Project Panama" this summer.

In March, there were 2.7 billion search queries performed on Google and 1.8 billion on Yahoo, with MSN-Microsoft lagging far behind, according to Comscore Networks, an independent research firm.

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Source: The Denver Post

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