How Does Google AdWords Really Work?

February 21, 2024

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The goal of Google AdWords is to bring new traffic, eyeballs, and purchases to your products or services through search queries. Google AdWords can seem complicated at first, but once you understand the basics, it’s not hard to dip your toes into the water and get started with this highly effective digital marketing strategy. For every dollar spent on a Google AdWords, businesses see two dollars in ROI.

Companies of all sizes can use Google Ads, and not only does it work to bring increased traffic to your online store, but you can also use Google AdWords to increase foot traffic to your local business, too. So, how do Google AdWords really work? Let’s find out below.


Why don’t more people invest in a Google AdWords online marketing campaign?

Despite its effectiveness, many people are hesitant to get started with Google AdWords. For one thing, it’s one of the most challenging digital marketing platforms to grasp. There are so many options for setting up campaigns, and campaigns also need to be continuously monitored and tweaked. It can be all too easy for people who don’t understand the basics to quickly spend all of their hard earned money on a campaign that isn’t working. The metrics can be challenging to establish, but it can be done with an understanding of the basics of Google’s premier advertising platform.

Your Google ads will show up on the search results page or the Google display network. Google ads will show up based on what keywords and phrases someone enters into the Google search bar.

When someone goes to Google and enters a keyword or phrase, they are looking for something specific. It’s one of the reasons why AdWords are so profitable because viewers are already looking for your product or service.

How are Ads on Google AdWords priced?

Google AdWords is a pay-per-click advertising platform that gets your website at the top of the organic search results page. In essence, Google AdWords works like an auction.

You only have to pay when someone clicks on your ad. With Google Adwords, marketers will bid on specific keywords that are relevant to their products and services. Prices can vary significantly for each keyword, and some industries will have higher keyword prices than others. For example, insurance keywords and keywords related to the legal field are some of the most expensive keywords you can bid on.

Also, you can set up negative keywords for your AdWords ads. A negative keyword means that Google will not display your ad for certain words or phrases.

For example, if you own a law firm and are looking to increase local foot traffic, you could put the word “free” as a negative keyword in your Google AdWords account.

If a searcher were to enter “free legal advice near me” you could prevent your law firm from showing up on the search results page for viewers who search for the word “free.”

What is Google quality scoring?

The price of your Google AdWords ads varies based on your quality score. The quality score is a score that Google uses to determine the quality and the relevance of your keywords and the ads you’ve created. The score will determine your cost-per-click (CPC) and will multiply your maximum bid amount to determine your ad rank in the ad auction process. Certain factors will go into determining your quality score, include the following:

  • The relevance of each keyword to the ad group that it’s assigned.
  • What your click-through-rate (CTR) is.
  • How relevant and high-quality Google thinks your landing page is.
  • How relevant your ad copy is.
  • How well your AdWords account has historically performed.

Outside of Google, no one knows precisely how much each factor weighs into the final scoring outcome. But seasoned digital marketers understand the importance of tweaking these factors to get the best quality score for your ads. However, the CTR is the most important factor in the quality score, because Google uses it to determine how helpful your ad is to viewers. If you have a good CTR and high-quality score, Google will reward you with the following benefits:

  • Lower CPCs
  • Higher ad ranks

Optimising your quality score will improve the performance of your ads and give you a better return on your investment.

Where will the ads display?

Your AdWords ads can display on two different places, either directly on the search results page (SERP), or on the Google Display Network, or GDN. If you choose to have your ads displayed on the GDN, your ads will show up as banner ads that get sent out and displayed across the Google Adsense network, which is a collection of two million websites that run Google Ads. The GDN can reach up to 90% of online viewers.

Where should you target your ads?

Targeting your AdWords ads to either the SERPs or the GDN depends on your business goals and where your target audience members are most likely to see your ads. Running an AdWords campaign on the SERPs is a good choice if:

  • You have a limited budget. AdWords ads on the search network tend to drive more direct conversions and are easier to measure.
  • You are selling an emergency product or service. Users who are looking for a product or service on an as-needed basis are more likely to be on the SERPs and will be able to see your offering when they search for specific keywords to solve their problem.

However, if you have a bigger budget and are looking to promote brand awareness, advertising on the GDN may give you the best results and help you reach your specific business goals.

Can We Help?

Google AdWords is one of the most effective and sophisticated digital advertising platforms in the world. You can increase your conversions and your fan base with a well-run Google Adwords campaign. At Australian Internet Advertising, we’ve been helping small and local businesses grow their brand awareness, sales numbers, and even their in-store foot traffic with optimised Google AdWords campaigns. Contact us today to see what we can do for your business.

Billy P.

About The Author

William Polson founded Australian Internet Advertising in 2013 and has over 12 years of experience immersed in Digital Marketing.

With an in-depth level of digital marketing knowledge, William has been sort after by and worked for, many large national brands including Subaru, Blooms The Chemist, and Nova 96.9.

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