David Kirkpatrick’s insightful article on Fortune describes Google’s AdSense business model as one in which advertisers only pay for success.
Most advertisers seek to stimulate demand by reaching a certain group of people with their message. In order to do so, they figure out which demographic segments are likely to respond to their messages and craft the ads accordingly. Google throws this model out the door. For Google, the key to an ad’s success is not reaching the right demographic, but understanding the attributes of the product itself. When you can properly identify those attributes, you can buy links to keywords that describe or relate to them. The “demographic” is self-selecting. Anyone who seeks information about those subjects will see that ad. If it appeals to their interest, they click on it, see a message on the advertiser’s website, and Google gets paid.
