Keyword advertising is a form of Internet advertising which is linked to specific words or phrases. The goal is to deliver targeted advertising which people are more likely to respond to because it addresses their interests and needs. Early instances of this advertising style appear to date to the mid 1990s, and it was quickly adopted by many Internet companies. One of the most famous keyword advertising programs is Google's AdWords, which delivers advertising on Google's sites and allows webmasters to use AdWords to sell ad space on their own sites.
In one form of keyword advertising, the ads are linked to terms someone types into a search box. When someone searches for “spices,” for example, ads for companies which sell species or accessories such as spice racks would be displayed on the page of search results. These ads may be clearly delineated from the search results, or included in the search results in the case of search engines which allow people to pay for placement in the results.
In another form, the advertising is keyed to the content displayed on the page. People exchanging emails about an upcoming surgery, for example, might see keyword ads for medical supplies and related things. Likewise, advertising on a weblog about parenting would be keyed to parents, with ads for products like diapers, toys, and so forth. Webmasters selling keyword advertising on their sites generally maintain information about the demographics of their site visitors, including age ranges, number of daily hits, interests, and so forth, so that advertisers can decide if the site would be a good fit for their needs.
In keyword advertising, advertisers select keywords and phrases which they think will be a good match, and pay for ad placement when these terms come up. Many companies have a payment system which is based on how many people click on the ads, with a set fee for each click based on the keyword itself. Choosing keywords can be challenging. A basic keyword like “bicycles” is often too generic, for example, in addition to being something which numerous companies are competing for, making it hard to buy in.
In the example of a bicycle company which wants to buy keyword advertising, instead of buying “bicycles,” the company might think about what distinguishes its products, and the type of market it wants to attract. A company which specializes in making bicycles for elite athletic competition, for example, might be interested in a different set of keywords than a company which makes basic cheap children's bikes. Many companies which sell keyword advertising offer consultations and advice to help companies pick the best keywords and phrases.