Google Ads & How They Work - Part 1

 Tuesday, June 2, 2020

So you're aware of the success metrics of companies leveraging Google Ads. 

Possibly, you are thinking of getting started with this marketing tactic to drive more ready-to-buy consumers to your store. 

However, just like every other beginner, you don't know the basics of using Google Ads or setting up your first PPC campaign

No worries - we've got you covered. 

From understanding the what and how of Google Ads to launching an optimized ad campaign, we’ll keep you posted. Let's get started.

Note - This is Part I of our Complete PPC Management Guide. We’ll roll out a series of PPC-centric posts to help you understand the know-hows of this result-oriented marketing tool. 

What are Google Ads?

First things first. 

Google Adwords and Google Ads are the same thing. 

Until 2018, Google featured text ads only under the name Google Adwords. Later, it expanded its services to product listings, display, and video ads on YouTube, and hence the name Google Ads. These are the paid advertisements appearing on Google's SERPs using Google Adwords and ads appearing on other websites using Google Adsense. 

That is, two different Google networks govern the way Google Ads work. 

Google Search Network - contains advertising locations like the organic search results on Google, Google Maps, and the partner sites on Google, which show text ads. 

Google Display Network - focuses on non-text based advertising methods platforms like YouTube, Gmail, and other partner sites on Google. The image ads on the sidebar or headers of a website are the ads on Google's partner sites. It allows the ads to appear in the selected areas of a website. 

How do Google Ads work?

Now that you know what Google Ads are, you must learn how to capitalize on them. But first, let's understand the logic that works behind. 

It all starts with The Adwords Auction of keywords - the search terms that the people are most likely to use when searching for a product. 

What is Adwords Auction?

You'll make a list of relevant keywords and then bid on them. This bid indicates the amount you will pay to Google for each click that your ad gets. 

You have to set a budget and a bid amount (maximum $2). Google shows your ad on the SERPs if others are not bidding more than you. This is in accordance with the quality score that shows how well your ad will reach people. 

If your bid is the highest, Google counts your ad impressions and charges you per click (Cost-per-click). That is, Google reduces your spending to less than your maximum bid amount if your ad produces a good quality score. This, in turn, leads to higher exposure. 

So, what should the quality score have?


Your Google ad must be RELEVANT to the search query, your keyword must be RELEVANT to the ad group, and your ad must be RELEVANT to your landing page. 

Higher CTR (Click Through Rate)

Divide clicks by impressions, and you will get the CTR. That is, the actual clicks will be filtered out from the views. Higher the CTR, better is the keyword relevancy, and hence, the quality score. 

Account History

It's all about your landing page, where people will reach after they click on your ad. It has to be relevant and user-friendly, which tells Google that your service is legitimate and offers quality to the people. 

Now, this will decide your Ad rank (position of your ad on the SERPs) - quality score x your maximum bid amount. 

And, the CPC you're going to pay:

(Competitor Ad rank / Your quality score) + 0.1

To sum it up, you need to decide your budget and target relevant keywords for the ads. Optimize your landing pages well. 

This is not an end! There's more to explore in this comprehensive guide to set up a PPC campaign. 

Stay tuned with our blog; we’ll keep you updated! Also, if you want to leverage the benefits of Pay-Per-Click advertising, feel free to contact our team. Walibu’s PPC experts can create, run, and manage PPC campaigns that will bring more and more success to you. Know further details here

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Ben Paulsen