DIGITAL MARKETING:This presentation is about Digital Marketing and the Success story of Flipkart.com embracing it presented on March 19 at WASS PRESIDENCY COLLEGE CENTRE FOR MANAGEMENT STUDIES BY KISHAN chaired by respected director Dr.M J ARUL
2. DIGITAL MARKETING
• In simplistic terms, digital marketing is the promotion of
products or brands via one or more forms of electronic media.
Digital marketing differs from traditional marketing in that it
involves the use of channels and methods that enable an
organization to analyze marketing campaigns and understand
what is working and what isn’t – typically in real time.
4. Digital marketers monitor things like what is being viewed, how
often and for how long, sales conversions, what content works
and doesn’t work, etc. While the Internet is, perhaps, the
channel most closely associated with digital marketing, others
include wireless text messaging, mobile instant messaging,
mobile apps, podcasts, electronic billboards, digital television
and radio channels, etc.
5. What we want from Digital Marketing?
Visibility Awareness Engagement Branding Leads
You are there only if they can
find you
Provide information to engage
people ongoing basis.
Generate awareness of your
products or services
Build Trust & Credibility with
potential customer
Develop capability for people
to contact you online.
6. Implementation Scope
Website Micro site SEO PPC ORM Mobile
The digital marketing implementation plan will start with website, which is
engaging and interactive. The concept and the website will be promoted through
search engine optimization, social media marketing, Email marketing, SMS
marketing, mobile marketing, and paid ads at various related sites and social
networking platforms.
7. Offline / Online
Offline, bustling crowds pass by your place of
business. Some of the passerby traffic notices you
and walks in.
"Location, Location, Location"
Online, people search for information. Millions of
people. Each searches alone.
"Information, information, information"
8. Search Engines
•search engine will gather, sort & report information from the Internet, based on your topic of interest
•But, search engines also offers a lot more than search alone…
9. • Google – Searches 4,285,199,774 web pages in an hour
• 28% of Google searches are for a "product/service name", 9% are for a
"brand name" and 5% are searches for a "company name".
• 85%* of all Web site traffic and 70%* of all online purchases originate
from a search engine. (*Jupiter Research)
• Micro Commerce opportunities for new products and services will
generate an estimated $60 bln in revenue per year by 2015 according to
Gartner. A micro purchase is a purchase valued at less than $5 and
conducted electronically, where the settlement can be either prepaid, by
subscription, on-the-spot, or invoiced.
10. Definitions
• SE = Search Engine is a tool that enables users to locate
information on the World Wide Web. Search engines use
keywords entered by users to find Web sites which contain the
information sought.
• Web Directory = a search service that arranges the web pages
it knows about into categories and subcategories.
• SEO / SEM = A form of online marketing, Search Engine Optimization / Search
Engine Marketing is the process of making a site and its content highly relevant for
both search engines and searchers. Successful search marketing helps a site gain top
positioning for relevant words and phrases.
11. What is Targeted Advertising?
Your customers see your ad when they search
Your ad reaches users at the moment they
demonstrate interest
12. Search Marketing Defined
Improving the visibility of your website and increasing website traffic by placing your brand
in front of consumers when searching for relevant products and services in Search
Engines
Search Engine Optimisation
(SEO)
Search Engine Advertising
(SEA)
16. Search engine optimization/cont’d
How SEO elements affect organic listings
Title tag
Meta description tag (or first para of text if no
meta des has been added)
Keywords
17. The text ad is displayed on Google search results page under
“Sponsored Links”
The text ad is displayed on Google search results page under
“Sponsored Links”
User clicks on
the ad and is
brought to the
relevant
landing page
User clicks on
the ad and is
brought to the
relevant
landing page
User types in a search query on Google Search
PA
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Google Search
best mba colleges in bangalore
18. About 3,07,000 results (0.30 seconds)
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19. SEO: Search Engine Optimisation
SEO
Websites are ranked by relevancy
according to search engine
algorithms (i.e. a compliance
checklist)
Affected by website design.
20. Content Network
Theme Content
(Text Ads)
Video Targeting
Video Sites
Video Ads
Contextual Targeting - Gmail
Google shows Ads after evaluating the
context and the relevancy of its placement
Gmail Ads
Contextual
targeting
reduces the
cost of
conversion and
improves the
quality of lead.
There are 100’s of similar website
where the ads can be shown
21. Marketing Strategy- Through radius targeting
A) Understanding the targeted search of the
customer,
B) Understanding the geography on the basis
of search,
C) Radius targeting of the campaign and
navigating to the landing page,
D) Reducing the bounce rate and increasing
the relevant visitors
Defining geography of targeting
24. Keyword Research
When you begin the process of keyword
research, the first step is to think like your
target audience and how they would enter the
phrases for what they are searching for.
25. Keyword Research
Keyword research involves so much more than just looking
up search frequencies. Critical factors such as budget
restrictions, competition levels, and business strategy must
be considered in order to develop a results-driven search
marketing plan..
26. SEARCH ENGINE OPTIMIZATION
• Search Engine Optimization refers to a specialized form of
Digital Marketing activity whereby a company or business
achieves the best possible online visibility over the most
prominent and popular search engines like Google
,Yahoo,Bing. SEO is considered as one of the most cost
effective marketing strategies to promote any business, brand,
product or services to customers not just in a local region but
throughout the world.
30. GOOGLE ADWORDS
• Google Ad Words is simple and efficient. It allows businesses
to promote their products, services or brands. Google gives
businesses the option of paying for their ads on a CPM (Cost
per Thousand Impressions) basis or on a PPC (Pay Per Click)
basis. It also allows businesses to run, maintain, measure, and
track results from their paid campaigns.
31. What is AdSense?
.custom searchcustom search
Google AdSense is a program run by
Google that allows publishers in the
Google Network of content sites to serve
automatic text, image, video, or
interactive media advertisements, that
are targeted to site content and audience
32. ADWORDS
• Let’s say you have a webpage specifically on the topic of
“business insurance.” Once visitors arrive on your site, Google
AdSense immediately starts working, displaying relevant content
in ads. When visitors click on these links, two things happen:
• Google makes money through its AdWords program charging
advertisers a cost per impression or cost per click rate based on
the number of times users either see or click on the add.
• Publishers make money with a share of what Google collects
from the advertiser for the ads seen or clicked on from their
websites.
33. What is AdSense?
banner ad
banner adbanner ad
searchsearch
Publishers get
paid when
readers click
on ads –
Pay Per Click
CPM
34. adad
adad
How does AdSense work?
Publishers make
space for ads via display
(banners, text, video)
or custom search box
Google ad server
manages inventory of ad
spaces, giving publishers
access to large pool of
advertisers
ADVERTISERS
Google ad
partners bid for
those spaces via
real-time auction
PUBLISHERS GOOGLE AD SERVER
Real-time-bidding e.g.
35. How does Google optimize revenue for
Publishers?
• Think of Google’s AdWords and AdSense as two
complementary parts of Google’s advertising program:
• One allows businesses to signup and buy ads to be displayed
by Google across the Web alongside relevant content.
• The other lets Web publishers partner with Google to help
spread that advertising by placing it on their pages for a share
of the profit.
36. AdSense vs AdWords
• Google AdWords is for business owners mainly to
create advertisements to appear on search,
publishers and partner networks. Advertisers using
Google AdWords pay Google to increase traffic
and conversions on their sites.
• Google AdSense on the other hand is a
monetization tool and is free for content providers
and publishers that have already generated
significant traffic and want to monetize that traffic.
45. Introduction
• Flipkart- Worlds top 10 most visited E-commerce website in India with
regards to traffic.
• Multiple payment methods available for customers to make payment
more easy.
• Fastest growing e-commerce website in India
• It sells nearly 30 products per minute.
46. Founded in 2007 by Binny Bansal & Sachin Bansal.
Started with selling of Books,
Operation exclusive to India, with HQ at Bangalore, Karnataka
First book sold- “Leaving Microsoft to change the world” by john Wood
Later expanded business in other products like
• Electronic goods
• Apparels
• Home and kitchen appliances etc.
History
47. RISKING IT ALL ON THE LINE
There was huge risk taken by both the Bansal's as both of them got a
high profile job in the worlds biggest e-commerce website named
Amazon. Leaving Amazon to start their own company with just Rs.
4,00,000 involved a huge risk as there was no guarantee that their idea
would succeed or not.
It was result of this risk taking only that today Flipkart generates Rs 1.5
Crore a Day. It has a record user base of 1 Million in India only.
Flipkart claims to have 26 million registered users,
clocking over eight million daily visits.
48. BUSINESS RESULTS
• In FY 2013–2014, Flipkart crossed the INR7 billion (US$130million) mark
as Internet usage in the country increased and people got accustomed to
making purchases online. Flipkart projects its sales to reach INR50 billion
by year 2015. On average, Flipkart sells nearly 20 products per minute
and is aiming at generating a revenue of INR50,000 crores by 2015 end.
Flipkart has also set a target of shipping a billion units a month and
serving 100 million customers by 2018. As of now, Flipkart ships about
eight million units a month.
• It expects to sell about 25 million units(Products) per month and to add
100,000 Re sellers
• Taken 3 million sqft of Prime Office space with the embassy Group @
Bengaluru at an average rent of Rs.300 crores
49. • Flipkart is currently in growth stage
• Sales revenue is increasing every year
• The biggest deal in the consumer Internet space so far is Flipkart’s acquisition of Myntra at a staggering 370
Million dollars(Ind Rs.2300 crores)
50. Order Lifecycle
Attract users to the site(www.FlipCart.com/FlipKart)
Family, Friends, SEO, SEM,WoM, Brand Building
Provide selection
Make it easy to Find & Discover products
Provide details to evaluate a product
Description, Specifications
Price well
Have to be competitive to the most obvious options
Provide convenient payment options
Online, COD
Confirm payment
51. Order Lifecycle(contd)
Get the item
Procure from Supplier (Just-in-time) (Supplier selection)
Keep Inventory (Inventory Prediction, Planning)
Clean & Check for sanity
Pages missing, MRP printed lesser than told to you
Pack the item
Tamper proof, weather proof, breakage proof
Select courier & hand-over
Courier performances vary across regions a LOT
Get tracking id & communicate to customer
Follow-up for timely delivery
Take care of returns (faulty product/user changes their mind)
Minimize returns
52. This is Dhanda
No glamour – this is dhanda and very traditional at that.
Your competition is on SP road and Chandni Chowk.
Dealing with suppliers:
> Signing agreements with suppliers
> getting them to share data feeds
> getting them to fulfill your orders
Dealing with Payment Gateways
Setting up & operating large warehouses
Dealing with Couriers Now (e-cart)
People may not be as forthright & honest
53. Micro Analysis- Suppliers & Intermediaries
Supplier or merchants What merchant gets!!!
• Open platform for everyone to become merchant
• Required a product portfolio to get registered as a
merchant on Flipkart
• Product is placed depending on the category of the
product.
• Product undergoes a Quality check by the company itself
before getting live
• Brand name visibility
• Quick and easy access by the customers
• Increase in the sales by reaching out customers.
• Also brand presence on social networking sites.
54.
55. Myntra + Flipkart
• Flipkart’s Reason
Wanted apparel products specialization, deeper understanding of fashion, aesthetic presentation and
experience.
Fashion products to become the most popular category in the near future.
• Myntra’s Reason
To have a stronger distribution network with the present ratio being at 70:250
To foray into the mobile platform
To increase warehouse capacity by 4 times
58. Customer relationship management practices
A CUSTOMER CENTRIC APPROACH TO MANAGEMENT
Flip kart can be said to be the pioneer in initiating the skeptical Indian shopper into
online retailer.
Flipkart has built itself on the core foundations of reliability, quickness, credibility,
variety and quality. It uses Customer Relationship Management as its differentiating
factor.
Providing good customer service enables Flipkart to enjoy high levels of customer
satisfaction, generate repeat business and ensure positive word-of-mouth.
59. The customer is informed at every step through e-mail/text when the order has been
confirmed order summary & shipment details + tracker informing customer if order has⇾ ⇾
been delayed.
Easy to reach out to the customer service team through their social media channels as well as a
customer care number.
Customer complaints are quickly addressed and there are transparent return and exchange
policies.
Monday, March 23, 2015
63. Strategic CRM
Customer-management orientation
The company philosophy echoes in their tagline “making better our service promise”.
The founders believe that huge discounts alone cannot sustain a successful business,
customer satisfaction and preferences need to be addressed to keep the flame going.
Flipkart has built itself on the core foundations of reliability, quickness, credibility,
variety and quality.
Providing good customer service enables Flipkart to enjoy high levels of customer
satisfaction, generate repeat business and ensure positive word-of-mouth.
Senior management believes that as the retail sector evolves, customer satisfaction will
be a key driver of success for most brands and organization.
Monday, March 23, 2015
64. Technological Support At The Operational Level To facilitate
CRM: Sales Force Automation
SFA is the application of technology to support regular sales functions and includes tools that
are employed by users to perform administrative and other repetitive tasks.
SFA transforms repetitive and routine manual processes to automated processes, which helps
sales reps operate in a more efficient manner.
For example, applications such as quarterly automated sales reports and calendaring tools are
key elements of sales technology. The domain for SFA applications includes the attainment and
storage of information. SFA tools assist sales reps in formulating a professional sales encounter.
Sales reps can remain in contact with distant customers via e-mails and cell phones, thus
reducing travel hours. They can also receive and manage orders from customers in an easy,
timely fashion.
Addition-ally, applications like calendaring and routing tables help sales reps reduce downtime
and increase their own production during regular work hours.
Monday, March 23, 2015
65. Customer Knowledge Discovery
Flipkart has an amazing recommendation system at place to make product discovery faster and
seamless. The recommendation system used by Flip Kart predicts user’s intent and helps connect
them with products they need or perhaps be interested in an automated manner. They help users
in following ways :
Help find: similar products. Ex: recommendations to buy a apple phone when surfing Nokia
phones.
Help decide . Ex: people who viewed this ended up buying.
Complete the purchase experience Ex: cases for phones, laptop bags etc.
Excite or wow
Monday, March 23, 2015
66. Customer Demographic Analysis And Customer Behavior Modeling
Flip kart's customers fall in to the categories of youth, avid book readers, technology enthusiasts
and online shoppers. Therefore, it has carefully demarcated and segmented each of the
demographic categories and modeled the customer behavior to understand their needs and
preferences. It creates data models from the following sources:
Bought history
Browse history
Compare history
Bought items
Wish list items
Rated products
Cart additions
Monday, March 23, 2015
67. Customer Value Assessment
Value assessment at Flipkart is done through various metrics such as:
Click-through-rates
Relevance/ quality
Visibility
Click-to-order
Monday, March 23, 2015
68. Straightforward Return And Exchange
Policies
Flip kart allow its users to return products if unsatisfied within 30 day period with full refund
of money or exchange for another product.
This allows customers to shop online without worrying about the risks involved.
It uses the Wallet feature to debit the refund money that can be used to make a purchase from
the website.
Monday, March 23, 2015
69. InveINIIntory Management
Flipkart doesn’t believe in getting the product
once the order is placed. The products are all there
in the inventory itself. When one place the order
online, the CRM system sends the request to the
inventory store and the team ships it within 2hours
of receiving the request.
“Never promise something that you do not have.”
70. Flipkart Wallet
Add money and enjoy a hassle free shopping experience!
The Wallet is a prepaid instrument that enables you to shop on
Flipkart multiple times by making a one-time payment of a certain
value. This will be added to your Wallet as prepaid balance. When
you select the Wallet as the mode of payment for your order, the
corresponding amount will be deducted from your Wallet balance.
72. Latest Technology & Strategy In CRM
Customer Experience Management
Today, however, a shift is occurring towards thinking about customer relationship
management more in terms of the customer experience. Thus, customer relationship
management is becoming customer experience management. This transition is in large
part being driven by the previously discussed impact of social media.
Consider for example that it was very impressive when Microsoft got to 600 million
outlook users and dominated the email market in what was thought of at the time as
‘just a short’ 15 years. However, Facebook now exceeds 800 million users and reached
that milestone in half the time it took Microsoft to dominate the email market.
The lesson is that when a company places a greater focus on a great
customer experience and combines that with the modern mechanisms
to make those experiences go viral, stratospheric growth is possible.
Monday, March 23, 2015
74. Amazon
• World’s Largest Online
Shopping site founded in 1994.
• In India launched in June, 2013.
• Has one of the best delivery
networks in India.
• Site Rank: 10.
Ebay
• American E-commerce
company founded in 1995
• Better known for its Trading
facilities(Buy & Sell).
• Provides some of the amazing
deals which you can’t find on
any other sites.
• Site Rank: 26.
77. Recent news
• Flipkart had a big billion day sale on Monday 6th
october
2014 which had a sales top up of Rs 6 crores in 10 hours
• Fliplart targets $8 billion in online product sales in 2015
• Undeterred Flipkart gears up for next Big Billion-Day sale;
event to be many times bigger than the previous one
78. Flipkart's 'Big Billion Day': From behind the
scenes
• It took more than 700,000 man hours (six months of work put
in by 280 people over 14 hours every day) of planning to get
the back-end systems for The Big Billion Day ready
• As much as 50 tonnes of copper were moved across the
country for cabling. It meant more than 800 km to be ready
for the sale.
• Also, 50 km of fibre-optic cable — 30 km flown in from outside
of India — was laid.
79. Flipkart co-founders apologise for glitches
• A day after they claimed to have made history, Flipkart co-
founders Sachin Bansal and Binny Bansal reached out to
customers with a personal apology,
acknowledging glitchesduring the company’s ‘Big Billion Day’
sale ,In an email sent to each Flipkart buyer, the Bansals
addressed all these issues. “Yesterday was a big day for us. And,
we really wanted it to be a great day for you. But at the end of
the day, we know your experience was less than pleasant,” the
email said. “We did not live up to the promises we made and for
that, we are really and truly sorry.”
80. Snapdeal
• Founded in 2010.
• Since then it has been growing
at very fast rate.
• You can find everything on this
site from hat to shoe and from
bags to watches.
• Site Rank: 291(Globally)
15(India).
Jabong
• Indian fashion and lifestyle e-
commerce portal founded in
2012.
• Ships 14,000 orders on a daily
basis out of which 60% were from
small towns.
• Has set a record for sale in the
male fashion category in 2012.
• Site Rank: 301(Globally)
14(India).
81. • 2013, October:$160 Million from Dragoneer Investment, Morgan Stanley, Sofina, Vulcan Capital,
Tiger Global
• Flipkart, the poster boy of Indian e-commerce, is again in talks with investors to raise at least
$500 million. The Bengaluru-based company, which raised close to $2 billion in 2014, was
discussing fund-raising with existing as well as new investors, sources said.
INVESTMENTSINVESTMENTS
82.
83. • $12bn Flipkart's value
• $400mn Snapdeal is seeking, according to reports
• $2bn Flipkart raised in 2014.
• $1bn Snapdeal raised last year, $627 million came from SoftBank
• $8bn Flipkart aims to double gross merchandise volume (GMV)
to by 2015.
• $3bn Snapdeal has increased its GMV target to by March
89. Glowing reviews:
AMAZON
• 80 percent of Amazon’s product
reviews were positive. people who
received free products from
publishers, agents, authors, and
manufacturers.
FLIPKART
• The lesson: Encourage reviews of your
business, especially when you’ve got a
happy customer on your hands.
90. Niche Product
AMAZON (E-BOOK)
• People are reading more than ever
because of the ease of E-books. E-
books from Amazon are also popular
among those with iPads because of
Amazon’s expansive selection
FLIPKART
• Lesson: If you’ve got a niche product
that you’re known for, keep your focus
on it and maintain a wide selection
91. Value-added differentiation
AMAZON
• Amazon.com works hard to
achieve value-added
differentiation through customer-
focused information services.
Amazon.com's site retains customer
preferences and provides automated
customization for users
FLIPKART
• Lesson : should focus on the customer
preferences and give them advantage
of customization of product
92. Price Control
AMAZON
• Amazon still manage to get a hold on
its price differentiation when
compared to other physical or online
store
FLIPKART
• But with flip kart , they are still not
getting it. Customer still find a wide
gap in price b/w flip kart and other
online store.
93. 3 possible scenarios
Amazon buys Flipkart: (Probability: 40%) This is the dream Flipkart
founders /investors are hoping for day in and day out. The
question then will be about what the price will be. If we look at
history, it's similar to what Ramesh Chauhan of Parle soft drinks
faced when Coke was trying to enter India. He sold off 4 brands:
Thumsup, Gold spot, limca and one other for a price of 750 crores
when a reasonable value was more likely 275 to 300 crores. It's
rumored that Flipkart founders have already asked for 15 billion
USD which Amazon thought was ridiculous and turned down. This
is the kind of exits current investors are hoping for.
94. 3 possible scenarios
• Amazon crushes Flipkart: Amazon brings in its own expertise,
processes, patents, IP, brand and offers superior buying
experience thereby wiping flipkart out of existence. The
problem which flipkart has solved( Logistics) is a
commodity and can easily be replicated. I am assuming that
flipkart doesn’t have any IPR or patent ( In fact the founders
having worked with Amazon earlier might have exploited
Amazon's IPR ). The customers quickly switch to Amazon.
Finally, Flipkart is sold for a small amount to Amazon. It would
be disastrous for founders and investors.
95. 3 possible scenarios
• Flipkart does a Lagaan: (Probability: 10%) Amazon is not able
to find its feet in the country. Flipkart finds the battle tough. If
Bansals get the government to protect it. They influence the
Modi Govt / Make in India Sell elsewhere policy and either
drive Amazon out of India or, just like the Naukri Versus
Monster showdown, Flipkart becomes #1 and Amazon is
comfortable playing the second fiddle.
• Whatever happens THE WINNER IS DIGITAL MARKETING
96. Current Status of the company
• Started with a funding of INR 4,00,000 by the owners and now a billion dollar
company.
In 2013:
•Flipkart Raised USD 160 Million from private equity investor
• Flipkart is operating online since the beginning of the company
• First offline store opened in Bangalore named fliptomania
• Company is going ahead with more offline store in Metro cities like Delhi, Kolkata, etc.
97. Conclusion
• Flipkart, the first billion dollar Internet company from India(going by 2015
estimates )is by far the leading online store in the nation.
• Now that Amazon entered India in early 2012, this news becomes even
more significant, considering that Amazon has previously, and
unsuccessfully, tried acquiring the company, with Flipkart demanding a
very high buyout price.
• With online retail industry in India pegged to reach $1.5 billion (2015),
sources suggest that e-commerce is just hotting up in India and we may
soon seen many more Internet companies achieving similar success.
99. Research Questions
• How did Flipkart get on to the top of India’s e-shopping market in just 4 years?
• What were the strategies implemented by Flipkart to create online business in India?
• There are millions of retail websites and not many have achieved even a fraction of the
attention that Flipkart has. What is it that makes Flipkart standout?
• What does Flipkart have that makes its model so Robust?
• What is there future road map?
• What are the major threats for Flipkart?
Google is a search engine. A search engine is a website that gathers, sorts and reports information form the internet on a topic you specify. Google searches billions of documents, files, and websites in seconds. Google then provides a list of results with the most relevant information at the top. This list of files, documents, and websites is called the Google Search Results.
Google can be accessed on internet by typing the following web address into the address bar a the top of your internet browser: www.google.com. The Google homepage looks like this, with a search field prominently displayed in the center.
NEXT ANIMATION
Above the search field are a list of links for different types of specialized searches you can perform, such as images, news, and others.
NEXT ANIMATION
Below the search field are links to different Google programs, including the link on the left which leads you to the AdWords advertising program.
NEXT ANIMATION
In the center of the page is the search field, where you would type your topic of interest.
NEXT ANIMATION
After typing your topic of interest, you can select either the Google Search or I’m Feeling Lucky button. The Google Search button will take you to the Google Search Results. The I’m Feeling Lucky button will take you to the first website or document from the Google Search Results.
Next to the search results, ads can appear both on the right hand side of the page and occasionally above the search results. These are put there by Google’s online advertising product, called Google AdWords. Ads are triggered by the user query - this is called keyword advertising. On a following slide you’ll learn more about keyword advertising.
When you begin the process of keyword research, the first step is to think like your target audience and how they would enter the phrases for what they are searching for.
Keyword research involves so much more than just looking up search frequencies. Critical factors such as budget restrictions, competition levels, and business strategy must be considered in order to develop a results-driven search marketing plan.
Google AdSense is a way for publishers to earn money by displaying targeted google ads on their website. Site owners and publishers with significant amount of traffic can use Google AdSense to generate an additional source of income. Publishers make space on their web or mobile site for ads either via banners, text or videos. Google ad partners then bid for those spaces in real-time auction to reach out to site users. Publishers get paid when readers clicks on those ads. There categories of ads: Search, Display (banners & text), Mobile, Video, Gaming and Affiliates.
Google AdSense is a way for publishers to earn money by displaying targeted google ads on their website. Site owners and publishers with significant amount of traffic can use Google AdSense to generate an additional source of income. Publishers make space on their web or mobile site for ads either via banners, text or videos. Google ad partners then bid for those spaces in real-time auction to reach out to site users. Publishers get paid when readers clicks on those ads. There categories of ads: Search, Display (banners & text), Mobile, Video, Gaming and Affiliates.
The bid type is the way that advertisers bid in the auction for your ad space: cost-per-click (CPC) or cost-per-thousand impressions (CPM).