How Does Google AdWords Work?

You've probably already heard of Google Adwords, that's the reason you're here. But you may not yet know how Google Adwords generates customers for your business.

Google Adwords is hard to explain. Some people oversimplify it, and others overcomplicate it. Using Google Adwords might be the best decision you can make for your business. This is not an exaggeration.

Internet users use Google to perform 3.5 billion searches per day. Each search gives you the opportunity to get your brand in front of more usersThat means increased leads, conversions, and sales. That's where Google Adwords comes in.

Google Adwords allows you to advertise and promote your products and services when users search for relevant keywords. When done right, these ads have the potential to increase leads and sales.

Let's take a look at what Google Adwords is, how it works, and how to set it up for your business today.  

How Does Google Adwords Work?

Table of Contents

{tocify} $title={Custom Titles}  

What Is AdWords And How Does It Work?  

Google Adwords is a paid online advertising platform offered by Google. The search engine company renamed the service to Google Ads in 2018.

How it works remains essentially the same: when users search for a keyword, they get results for their query on a search engine results page (SERP). These results may include a paid advertisement that has targeted that keyword.

For example, here are the results for the term "fitness coach".

How Does Google Adwords Work?

You can see that all the ads are at the top of the SERP. They are also almost identical to the organic search results, except for the bold "Ad" at the top.

This is a good thing for the advertiser, as the top results on Google usually get the vast majority of traffic for search queries.

However, buying ads on Google doesn't necessarily guarantee first place. After all, you will likely have many other marketers competing for the same keyword through Google Adwords.

To understand these rankings, let's take a look at exactly how Google Adwords work. 

How Does Google Adwords Work    

Google Adwords works on a pay-per-click (PPC) model. This means that advertisers target a specific keyword on Google and bid on that keyword, competing with other advertisers who also target that keyword.

The bids you make are "maximum bids", which is the most you are willing to pay for an ad.

For example, if your maximum bid is $4 and Google determines that your cost per click is $2, you get the ad placement! If it determines that the cost per click is more than $4, you don't get the ad placement.

You can also set a maximum daily budget for your ad. You'll never spend more than a specific amount per day on that ad, so you'll have a better idea of how much to budget for your digital ad campaign.

Marketers have three options for their bids:

- Cost per click (CPC). The amount you pay when a user clicks on your ad.
- Cost per thousand (CPM). How much do you pay for 1000 ad impressions?
- Cost per engagement (CPE). How much do you pay when a user performs a specific action on your ad (sign up for a list, watch a video, etc.).

Google then takes the bid amount and combines it with a rating of your ad called Quality Score. According to Google:

"The Quality Score is an estimate of the quality of your ads, keywords, and landing pages. Higher quality ads can lead to lower prices and better positions in ads."

The score ranges from 1 to 10 - 10 being the best score. The higher your score, the better you will rank and the less you will have to spend to convert.

Your quality score combined with your bid amount creates your ad rank - the position of your ad on the search results page.

And when a user sees the ad and clicks on it, the marketer pays a small fee for that click (thus a pay per click).

The idea is that the more users click on a marketer's ad, the more likely they are to achieve the goals of the ad (e.g., become a lead, make a purchase).

Now that you know how Google Adwords work, let's look at the different types of Google Adwords you can use for your campaign.   

Google Adwords Types

Google offers different types of campaigns that you can use:

  • Search campaign
  • Display campaign
  • Shopping campaign
  • Video campaign
  • App campaign

Let's take a look at each type of campaign to see how they work - and which ones you should choose.  

Search Campaign

Search campaign ads appear as text ads on the results page for the keyword.

For example, here are the search campaign ads for the keyword "laptops": 

How Does Google Adwords Work?

These are the ads you probably know best. They appear on the search results page with the black "Ad" symbol next to the URL.

As you can see, text ads aren't the only type of ads on the Search Network. You can also have your ads appear in Google Shopping. This brings us to...  

Shopping Campaign

A shopping campaign allows you to promote your products in a much more visual way.

These ads can appear as images on the search results page: 

How Does Google Adwords Work?

And they can appear in Google Shopping:

How Does Google Adwords Work?

If you have a physical product, Google Shopping ads can get qualified leads by presenting your product directly to customers.

Display Campaign

The Display Network leverages Google's vast network of partner websites to showcase your ad on different websites all over the Internet.

And there are many different ways to display your ad. First, your ad can appear on third-party websites, such as :   

How Does Google Adwords Work?

You can also have a video ad appear in pre-roll before YouTube videos:

How Does Google Adwords Work?

Google also allows you to post your ad on its Gmail email platform: 

How Does Google Adwords Work?

Finally, you can have your ad appear in third-party applications on Google's application network:  

How Does Google Adwords Work?

One of the advantages of using the Display Network is its reach. Google partners with over two million websites and reaches over 90% of all internet users, ensuring that your ad will be seen by as many people as possible.

The ads themselves are also flexible in terms of style. Your ad can be a gif, text, video, or image.

However, they don't have all the drawbacks. Your ads can end up appearing on websites you don't want or in front of videos you don't want your brand associated with. This has never been more evident than with YouTube's various "Adpocalypses" over the past few years.

However, if you're careful about where you place your ads, the Display Network can be a great way to gather leads.  

Video Campaigns

These are ads that appear in front of YouTube videos as pre-rolls.   

How Does Google Adwords Work?

"Wait, didn't we already talk about this with the Display Network?"

We did! But Google offers the option to choose specific video ads, rather than a more general Display Network ad.

This is perfect if you have a great video ad idea you want to test out.

Video campaign ads come in many different forms. There are skippable video ads, like the one above. There are elusive ads like this one:    

How Does Google Adwords Work?

There are discovery ads that you can find on the search results page for specific keywords: 

How Does Google Adwords Work?

And there are various overlays and banners you can see above.

App Campaign

Like video ads, app ads are also included in the Display Network but can be used for targeted campaigns. 

How Does Google Adwords Work?

To do this, you do not design each individual app ad. Instead, they will take your text and assets such as photos and provide the ad for you.

The algorithm tests different combinations of assets and more often uses the one that gives the best results.

Now that you know the types of ads you can create with Google, let's look at their cost. 

Google Advertising Cost

The average cost per click in the United States is generally between $1 and $2.

However, the cost of your specific Google ad varies depending on a number of factors. These factors include the quality of your website and the amount of your bid.

As a result, the cost will vary from ad to ad.

To understand how much Google advertising will cost your business, you must first understand the ad bidding system.

When a user searches for a keyword you are targeting, Google automatically goes into auction mode and compares your ad rank with all other marketers targeting that keyword.

If you think that a large advertising budget with high maximum bid amounts will result in a good ranking, think again. Google's ad bidding and ranking system favor websites that help users the most with a high-quality score over weaker sites.

So your CPC may be much lower than that of a huge Fortune 500 company with a large advertising budget, simply because your ad was of higher quality.

Now that you know the cost, the types of ads you can do, and what Google Ads are, let's look at how you can optimize your ads with Google Adwords Keyword Planner.  

How To Use Google Adwords Keyword Planner For Your Ads

Google Adwords Keyword Planner is Google's free keyword tool to help you choose which keywords your business should target.

It works simply: Search for words and phrases related to your business in the Keyword Planner. It will then provide you with information about those keywords, such as search frequency.

It will also give you suggested bids for the amounts you should bid on the keyword as well as the competitiveness of certain keywords.

From there, you will be able to make better decisions about your Google Ads campaign.

Getting started is easy.  

Step 1: Go to the Keyword Planner

Go to the Google Adwords Keyword Planner site and click on "Go to Keyword Planner" in the center.   

How Does Google Adwords Work?

Step 2: Create your account   

How Does Google Adwords Work?

Make sure you are signed in to your Google Account. Once you are, click on New Google Ads Account in the middle of the page.

On the next page, confirm that your business information is correct by choosing your country, time zone, and currency. If everything looks correct, click Submit.  

How Does Google Adwords Work?

When you do, you will be directed to a congratulations page. Click on Explore your campaign.   

How Does Google Adwords Work?

Step 3: Go to Google Adwords Keyword Planner

This will take you to your Google Ads campaign dashboard. Click on Tools and Settings in the top menu. Then click on Keyword Planner.  

How Does Google Adwords Work?

This will take you to Google Keyword Planner. To find new keywords to target, use the Discover New Keywords tool. This tool allows you to search for relevant keywords and generate a list of ideas for new keywords you could target.   

How Does Google Adwords Work?

Let's take an example: Imagine you run a running shoe store. You might want to target keywords around running shoes and race training. Your keywords might look something like this:   

How Does Google Adwords Work?

When you click Get Results, you will get your list of keywords and the following information about them:

  • The average number of searches per month
  • Competition
  • Ad impression share
  • Top bid (low range)
  • Bidding at the top of the page (high range)

A list of google suggested keywords is also available.   

How Does Google Adwords Work?

There you have it. That's how you can start using the Google Adwords Keyword Planner. 

How To Advertise On Google (simple method)

There are several ways to advertise on Google.

If this is your first time advertising, you're going to go through a very handy process that will help you easily set up your Google Ad. If this is not your first rodeo and you already have a Google Ad account, skip this section and move on to the next.

If not, keep reading!

In order to advertise on Google, you must first have a Google account for your brand or business.

If you don't have one yet, that's okay! Follow this link to learn how to create one.

Once your account is created and up and running, you're ready to advertise on Google. 

Step 1: Set a winning goal

First, go to the Google Ads homepage. From there, click on the "Start Now" button in the middle of the page or in the upper right corner.  

How Does Google Adwords Work?

If you are sent to your dashboard, click on + New Campaign.

Next, you'll need to choose your campaign objective. Choosing this goal will let Google know the type of audience you want to target, as well as how they will receive your bid money.   

How Does Google Adwords Work?

There are a variety of objectives you can choose from. Once you do, it will help you define the type of ad that works best for you.

Tip: A solid, well-defined goal can mean the difference between creating a lead generation machine with your Google Ads campaign, and having your time and money wasted.

And to set good goals, you need to learn how to set SMART goals.

SMART goals help your business set up systems to achieve your Google Ads goals. To learn more, feel free to check out this article.   

Step 2: Choose your business name and keywords

Once you have chosen your goals, click Next. On the next page, you will need to provide a business name.   

How Does Google Adwords Work?

Click Next once you have added your business name. You can now add a URL that users will be directed to after clicking on your ad.   

How Does Google Adwords Work?

On the next page, you can choose the keyword themes that match your ad and brand. Remember the work you did with Google keyword planner? This is where it can come in handy.  

How Does Google Adwords Work?

Once you have chosen your keywords, click Next.  

Step 3: Choose your target audience

On the next page, you will be able to choose where you want to target your ad. This can be a specific address, such as a store or physical location. You can also choose regions, cities, or broader zip codes.   

How Does Google Adwords Work?

Choose the region you want to target. Once you have done so, click Next.

Step 4: Create a fantastic ad

Now it's time for the fun part: Creating the ad itself.

In this section, you'll be able to create the title of the ad as well as its description. All of this is made even easier with the ad preview box on the right side.

Google also offers helpful tips and sample ads to get you started with ad writing.  

How Does Google Adwords Work?

There's only one thing you need to know to write good ad copy: Know your audience.

That's it. There are no big secrets or tricks to writing good ad copy. Once you know your target market and know exactly what their issues are, you'll be able to create content that will have them clicking on your ad faster than you can say "Don Draper."

Step 5: Set up your billing

This part is very simple. Enter all of your billing information as well as any promo codes you may have for a discount.   

How Does Google Adwords Work?

Then click on Submit.

Congratulations! You've just created your first Google ad!

Don't get too excited just yet. You still need to learn how to track your Google ad with Google Analytics.   

How To Advertise On Google (advanced method)

This is the most convenient approach to creating a Google ad.

Note: this method assumes that you have already entered your payment information into Google Adwords. If you haven't done so yet, go to your Google Adwords dashboard and click on Tools & Settings.

Under Billing, click on Settings. You'll then be able to set up your payment information.

Step 1: Set your goals

First, go to the Google Ads homepage. Then click on the "Start Now" button in the middle of the page or in the upper right corner.   

How Does Google Adwords Work?

If you are sent to your dashboard, click on + New Campaign.

Next, you'll need to choose your campaign goal. Choosing this goal will let Google know the type of audience you want to target, as well as how they will receive your bid money.  

How Does Google Adwords Work?

Once you have chosen your goal, a window appears where you can select your campaign type. The options are as follows:

  • Search
  • Display
  • Shopping
  • Video
  • Smart
  • Discovery  
How Does Google Adwords Work?

From there, the instructions will change depending on the type of campaign you choose. However, the main steps remain the same.

Choose your campaign type, enter the specific information Google asks for that type, and then click Continue.

Step 2: Choose your targeting and budget

For this example, we'll opt for a search campaign to generate leads. 

Here you can choose the networks you want your ad to appear on.   

How Does Google Adwords Work?

And you can choose the location, languages and specific audiences your ad will reach. 

How Does Google Adwords Work?

It's natural to think that the bigger your reach, the more customers you'll get, but that's not necessarily the case. In fact, the clearer and more specific you are about who you are targeting, the more leads and conversions you will be able to get.

It's ironic, but the smaller the net you cast, the more fish you catch.

It also makes sense to target a smaller area if your business is primarily based in one city. For example, if you offer physical products or retail services in Chicago, you probably won't want to include Los Angeles in your target.

In the next section, you'll be able to set up actual bids and a budget for your ad campaign. 

How Does Google Adwords Work?

Enter the budget you want, as well as the type of bids you want to target.

In the last section, you can include ad extensions. These are additional elements that you can add to your ad to make it even better.   

How Does Google Adwords Work?

When you have completed this page, click Save and Continue. 

Step 3: Set up the ad group

An ad group is a set of ads that share the same themes and target. For example, you may have several ads targeting running shoes and race training. In this case, you can create an ad group for "running".  

How Does Google Adwords Work?

Add your keywords or enter your website URL and Google will provide them for you. Once you've added the keywords you want for this ad group, click Save and Continue at the bottom of the page.

Step 4: Create your ad

Now it's time to actually create the ad.

In this section, you will be able to create the title of the ad as well as its description. All of this is made even easier with the ad preview box on the right side. Here you will be able to see previews of your ad on mobile, desktop, and display ads.    

How Does Google Adwords Work?

Once you have created your ad, click Done and click Create New Ad if you want to add another ad to your ad group. Otherwise, click Done.

Step 5: Review and publish

On the next page, review your ad campaign. Make sure that any issues have been resolved. Once everything looks good, click Publish. That's it! You've just created a Google Ad campaign!

How To Track Ad Performance Within Google Analytics?

If you don't track and analyze your Google ad campaign, you won't get much out of it.

By analyzing your data, you will learn what changes you need to make to your future campaigns to make them more effective.

To do this, you need to link your Google Adwords to Google Analytics.

If you haven't set up Google Analytics yet, here's this article on how to do so in five simple steps.

Once that's done, follow these steps from Google to link the two services:

- Log into your Google Ads account.
- Click on the Tools menu.
- Click on Linked Accounts under Settings.
- Click on Details under Google Analytics.
- You can now see the Google Analytics websites you can access. Click on the Setup link on the website you want to link to Google Adwords.
- From here, you will be able to link to the Google Analytics view of your website.
- Click on Save.

You can now view key metrics such as costs and click data for your Google Ad on Analytics. This data is critically important for determining future campaign adjustments and measuring the success of your current campaigns.  

Tips For Running Google Advertising Campaigns

Want to run a quality Google advertising campaign? Follow our tips below to help you.

Optimize your landing page

Your landing page is where users go after clicking on your ad. As such, it is one of the most important parts of your potential customer's experience.

You want landing pages to have a clear and inviting call to action while keeping the entire page scannable. This means no large blocks of text and an obvious purpose.

Want visitors to sign up for your newsletter? Make sure the sign-up box is prominently displayed.

Want to increase sales? Include a few testimonials and plenty of links to buy your products/services.

Get the title right

Your headline is probably the most important part of your Google ad.

After all, it's the first thing potential customers see. And it needs to stand out from the other results on the first page of Google.

As such, you need to make sure your title is perfect.

There are several ways to create compelling headlines. Our main suggestion: Avoid clickbait. Not only will it frustrate your readers, but it also erodes your brand reputation.

FAQs About How Does Google Adwords Work?

What Is AdWords And How Does It Works?

AdWords is an advertising system that Google developed to help businesses reach target markets online through its search engine platform and partner sites. These partner sites host a text or image ad that appears on the page after a user searches for keywords and phrases related to a company and its products or services.

Is Google AdWords A Waste Of Money? 

The truth is: yes. Google Adwords will lose you money if you don't work according to an informed and strategic plan of action. It is far too common for individuals, or even inexperienced digital marketers, to misuse Google Adwords.  

Do Google Ads Work For Small Businesses?

Yes, Google Ads works. It works for small businesses as well as large ones. Paid ads are a great way for businesses to increase brand awareness, get more traffic to their site, and generate more sales, all while being able to track results. 

How Long Does Google Ads Take To Be Profitable?

Here's what you can expect: a successful Google ad campaign will take at least 3 months to mature, and then about 4 to 12 months to become a solid campaign.

How Many Keywords Should I Use In Google Ads?

The best rule of thumb is to use no more than 20 keywords per ad group. Sometimes it is possible to use a little more, but exceeding the 20 keyword limit is a sign that your ad text is not as closely matched as it could be to the keyword you are searching for.

SEO Help - Amin Educate
Previous Post Next Post