Individual Assignment no. 1

Google AdWords is a quick and simple way to purchase highly targeted cost-per-click (CPC) advertising, regardless of user’s budget. AdWords ads are displayed along with search results on Google, as well as on search and content sites in Google’s growing ad network, including AOL, EarthLink, HowStuffWorks, & Blogger. With more than 200 million searches on Google each day and even more searches and page views on our ad network, exact Google AdWords ads reach a vast audience.
When user creates a Google AdWords ad, he chooses keywords for which his ad will appear and specify the maximum amount he is willing to pay for each click. The user only pay when someone clicks on his ad.
There's no minimum monthly charge -- just a $5 activation fee.

Google AdSense is a fast and easy way for website publishers of all sizes to display relevant, text-based, un-obtrusive Google AdWords™ ads on their website's content pages and earn money. Because the ads are related to what your users are looking for on user’s site, he'll finally have a way to both monetize and enhance his content pages.
Simply put, Google provides the user with AdSense HTML ad code to place on the web pages on which he wants to display AdWords ads. Then, Google takes care of the rest by leveraging award-winning and proprietary Google search and page-ranking technologies to deliver relevant AdWords ads to those content pages.
The user gets paid whenever someone on his site clicks on one of the AdSense ads. Advertisers can also bid to appear on user’s site on a CPM (cost per thousand impressions) basis. Both CPC and CPM bids compete in Google’s AdWords program to ensure that user optimizes his ad revenue.

Google’s income from Advertising:
($ in thousands, except per share amounts)

Revenue 2002 2003 2004 2005 2006 2007Q1 2007Q2
(unaudited)
Total ads. revenues 410,915 1,420,663 3,143,288 6,065,003 10,492,628 3,627,450 3,838,341
Y/Y Growth rate 514% 246% 121% 93% 73% 63% 58%
Q/Q Growth rate NA NA NA NA NA 14% 6%

Source: http://investor.google.com/fin_data.html
P.S. Sorry tried several times, but can't import chart here.

My opinion is that both these programs are the most beneficial for small and middle-sized companies. One if the reason is: the search for the products usually is done per key word, which is the name of the product – not brand. So companies with unknown brands (small and middle-sized) and not expensive products are searched. If people need product of a big sized company they go straight to its website as its repeats the name of the company and usually well-know.

The most important difference from TV advertising is in customer orientation of the services provided. The users will be offered the only type of advertising that they are looking for (not the whole range of different products like in TV advertising). The second advantage is that advertisers can limit their target auditorium to specified location (state, city, etc.) when is much harder to establish in TV advertising.