Imagine doing web searches in a Google-less world. Pretty frightening, right? Google is used so frequently by surfers that it has even become a verb. So it probably comes as no surprise that the Holiday eSpending Report released in January by Goldman Sachs, Harris Interactive and Neilsen//NetRatings showed that 39% of on-line shoppers start their product searches on the portal. Accordingly, most e-tailers and toycos selling on the web have identified sponsoring links on Google as a key traffic-driving strategy. So how does it work?

Google’s search results page is split into two components: Unfiltered natural listings picked up by the site’s web crawlers appear on the left side of the page, and the sponsored links appear on the right. Basically, it’s a cost-per-click operation through which an advertiser selects the queries and keywords that they’d like their products to appear under.

Emily White, manager of the site’s Adwords sponsored-link service, says cost is determined entirely by the advertiser. It takes US$5 to create an account, and then the user defines their maximum cost-per-click – in other words, what they are willing to pay every time someone clicks on their link. Rank is determined by the highest cost-per-click and the ad’s relevance to Google users. The more clicks it gets and the more an advertiser is willing to spend per click, the higher the link will sit on the page.

To make a link relevant, White says advertisers need to ensure that keyword and/or query choices are as specific as possible. For example, if you choose Barbie as your keyword, you’re going to be one of thousands on the search results page. But if you narrow the parameters down to the specific model of Barbie you’re trying to sell, you’re more likely to get through the clutter.

The ad environment on Google operates like it does in a good magazine. White says there’s a clear division between church and state, and buying keywords on the site has no effect on natural, non-paid listings and will not impact rank or even guarantee that the advertiser link will appear there.