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How Does Google AdWords Work? The Basics of Google Ads

Google AdWords is a pay-per-click online advertising platform that allows advertisers to display their ads on Google’s search engine results page. Based on the keywords that want to target, businesses pay to get their advertisements ranked at the top of the search results page. Since the platform runs on pay-per-click (PPC) advertising, you have to pay only when a visitor clicks your ad.

The Google AdWords marketplaces work like an auction where people bid for clicks. However, it’s not necessary that the highest bid wins. Apart from money, Google also considers the quality score to ensure that the people clicking on the ads have the best possible experience.

What this article covers:

What Is Google AdWords?

How Do I Use AdWords?

How Does Google AdWords Charge?

Do Google Ads Really Work?

What Is Google AdWords?

Google AdWords is one of the largest online advertising platforms that helps businesses reach customers across the globe and grow their business. Through this pay-per-click network, advertisers pay Google to target users based on their keyword search, the country and device type and deliver their ads to users who are interested in their products or services.

Here’s what an ad may look like:

google results for basketball shoes

Source: https://adespresso.com/blog/google-adwords/

What Are Google Ad Networks?

Google AdWords allows businesses to target users on two main networks – the search and the display network.

On the search network, advertisers bid on the relevant keywords. This gives them a display their advertisements to users who enter those keywords into Google as part of a search query. The paid search results are usually displayed on the top and bottom of the page have a small ad icon next to them.

The display network, on the other hand, offers advertisers the chance to display their banner advertisements on the websites that are a part of Google network.

What Is Ad Rank?

The Google AdWords system is principally a live auction where advertiser places a ‘bid’ in the AdWords system to secure a particular ad position. Depending on the competition and price bid by other advertisers, the advertiser either gets the desired position or related to a lower position.

Your actual ad position is, however, determined by two factors, your maximum bid multiplied by your quality score.

While maximum bid is how much you’re willing to pay when viewers click your ad, quality score refers to how well an ad is optimized, the quality of landing page, your expected click-through rate and the relevance of your ad to the searchers. The better your ad rank, the higher your ad is displayed in the google search results.

High-quality ads and well-performing AdWords campaigns are also rewarded by Google with discounted per-click costs, higher ad ranking positions and are more likely to show in top placement above organic listings.

How Do I Use AdWords?

To use Google AdWords, follow the steps below:

  1. Establish your account goals. For example, if you are using your Google Ads for brand building, the account structure and the features that you use will be completely different if you use ads for lead generation
  2. Develop audience personas by determining who your ideal customers are, what they do, what are they searching for and on what device
  3. Conduct keyword research by using keyword tools, such as SEMrush, to discover, cost, competition and volume for the search terms at every stage of your search
  4. Structure your AdWords account into different ad campaigns and ad groups, each featuring relevant keywords and ads
  5. Once you’ve listed the keywords relevant to your business, you can place your ads in the search results by bidding on the keywords. If the competition is high for the keywords, your Cost Per Click (CPC) would be too high to bid. In this case, it’s better to get granular and bid for long-tail keywords that are relevant for business
  6. Create the ad copy. Make sure that you include relevant keywords, a compelling headline, a clear call-to-action and ad extensions
  7. Design a mobile-friendly landing page that focuses on the benefits and features of the product or service that you’re trying to sell, has good-quality images, a form and a clear call-to-action
  8. Place a Google Analytics code on the website for conversion tracking
  9. The key to a successful ad campaign is routine optimization and A/B testing all your ad copies and landing pages

How Does Google AdWords Charge?

The amount that Google AdWords charges advertisers depends on what they are advertising.

Since Google AdWords is a pay-per-click advertising program, your ads are displayed for free and you’re charged only when someone clicks on your ad on Google search results page. Also, the AdWords system is a live auction, therefore, the click prices are determined by the amount of competition, and how much they’re willing to pay for a click.

When done correctly, Google AdWords can drive high-quality traffic to the website at costs that are much more competitive as compared to other forms of advertising.

However, when you don’t know how to expertly manage the process, costs can rack up fast while you potentially drive low-quality traffic. The key to running a successful AdWords campaign is to understand the factors that play into how much each click costs you.

  • Keyword competition
  • Maximum bid and bid position
  • Your average monthly budgets
  • Click-through rates
  • The quality score of your keywords

If you’re targeting high-volume keywords with lots of monthly searches, you could be paying a hefty amount for that traffic, which can be anywhere between a few cents to over ten dollars for each click.

To manage your AdWords costs, set a daily budget at the campaign level. You’re free to make changes to this when you like. Ideally, beginning advertisers should start small with a low budget. Based on the insights and the quality of leads, you can determine whether you want to boost your budget or stop a campaign.

Do Google Ads Really Work?

Google Ads can work for all types of businesses – big and small. It’s an affordable form of advertising that can target qualified, in-market prospects when managed correctly.

  • The key to making Google Ads work for you is to understand the ins and outs of paid search, bidding strategies, keyword research, account structure etc.
  • Map out what you’re able to spend on each campaign, set your daily budget accordingly and keep track of the spend
  • Do your keyword research and bid on the phrase and exact keywords at higher bids to get more relevant clicks
  • While creating ads make sure they are relevant and enticing enough for the viewer to click
  • Optimize your landing pages by running A/B tests to try out variations of a page
  • Try remarketing to reinforce your brand

If you’re still wondering if Google AdWords is worth the money, it’s best to start small, adjust based on results, and double down if your campaigns are generating affordable and profitable sales.

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