How Google Ads Make Money

April 18, 2019

How Google Ads Make Money | AIA Book in a free 30 minute strategy session

You work tirelessly to create a product that meets your audience’s needs and helps them solve a problem. Your website is all set up, your social media is up and running, and you are ready to conquer the world. You launch with excitement and…crickets. You have to scroll all the way to the seventh page of search results to find your website. You know online marketing is a slow process and you are in for the long run. You’re creating quality content, optimizing your pages, and engaging with the few readers you have hoping to move up the Google ladder.

We’re here to tell you about a shortcut and teach you how to boost your small business (and your revenue) with Google Ads.

Using Google Ads to Make Money

We’ll have to be honest: you are not going to learn how to use Google AdWords after reading one article on the internet. We’ve written numerous articles about the ins and outs of this platform and we encourage you to study them carefully if you want to dive dipper in the pay-per-click world. If you just want to get a general idea of what to expect and some general tips, then you’ve come to the right place.

  • The Keyword Is King

What you need to know about Google Ads is that the keyword is the king and will dictate the profitability of your campaigns. Sure, the ad copy, CTA, and the quality of your landing page add to the experience too and are factors that Google considers when determining if it should place your ad in the search results. But, it all starts with a Google search. The keyword will determine the cost per click, the quality of your leads, and the return on investment.

Here’s an example: let’s say that you are a small business selling whole and fresh roasted Brazilian coffee beans. You set up a Google Ads campaign and came up with “coffee beans” as a search term that you thought people will use when looking for your products or services. But, soon after, you realized that the keyword is too broad and you are getting clicks from people who aren’t necessarily interested in buying coffee beans, but who want to know if it is safe to eat them or who want to learn about their health benefits. You are losing money instead of making a profit. If a prospect clicked on your ad, then you will have to pay regardless if they converted or not.

So, you change your keyword and start targeting “buy fresh roasted Brazilian coffee beans” and “buy whole Brazilian coffee beans” instead. You get fewer impressions and clicks, but those that select your ad also take action, be it subscribing to your mailing list, following you on social media or buying your products.

Before you do a happy dance and go running to tweak your keywords and work on your ad copy and landing page, there’s one more thing that you need to go through before you can start generating a profit with Google Ads.Google Keywords

  • The Bidding War

After extensive keyword research, you found the terms your audience is most likely to use when looking for your products or services. You perfected your ad copy and made sure the landing page is well-designed, user-friendly, and relevant to the ad. Now, it’s time to show Google the amount of money you are willing to pay to get your ads shown in search results.

You will have to bid against other advertisers for each of your selected keywords. Don’t worry: the amount you are willing to pay isn’t the only factor Google considers when determining the ad placement. Otherwise, small businesses with a tiny advertising budget wouldn’t stand a chance.  The search engine giant also looks at the Quality Score attached to each keyword and considers things like:

  • The relevance of your ad compared to your keywords;
  • The relevance of your landing page compared to your ad copy;
  • The click-through-rate of your ad;
  • Your past account performance (of course, this criterion doesn’t apply if this is your first campaign.)

Don’t be disappointed if you don’t make it to the top of search engine results. The second and third position still get 18% respectively 11% of the clicks, which is nothing to ignore.

Can we try and guess what you’re thinking right now: is there a simpler and more direct way to make money with Google Ads?

Yes: there is.

Let us introduce you to Google AdSense.

How to Generate AdSense Income

Let’s make one thing clear from the start: you cannot expect to create your AdSense account, add the code to your site, and sit back and relax while you cash in on the profits. Just as with any business endeavor, you will have to invest a bit of time and resources before you can start generating a substantial profit.

Here’s what you need to keep in mind:

  • Pay Attention to the Ad Placement

So, you’ve created your account, got accepted as an AdSense publisher, and set up your payment information. Your site is now ready to display Adsense ads and generate clicks. But, where will Google place the ads? Will they interrupt the flow of your content?

You can opt for automatic placement if you don’t have the time to manage each AdSense ad. But, if you want more control over where AdSense publishes its content, then you can manage the placement manually too. Go to your dashboard and create a new ad unit. There you can select the size, type, and style of the ad. You will receive a Javascript code that you must add to your website where you want the ad to appear.

You can place as many ads on your website as you wish as long as they don’t affect the user experience. But, as a rule of thumb, the best ad placements are the following:

  1. You should place one ad unit above the fold as it has one of the highest conversion rates;
  2. Another great ad placement is at the end of the article or web page as people usually look for what action they should take next:
  3. Place one ad unit in the sidebar

How Does It Actually Work?

Just as with AdWords, Google considers various factors when deciding how much money your AdSense ads will generate. The type of traffic (organic traffic or paid, ) the type of content, the number of advertisers, and the position of your ads can have a great influence on your AdSense income.

Here’s an example: let’s say that your website generates a lot of traffic, such as 200.000 visitors per month. That means that you have 200.000 ad impressions. Let’s also imagine that your click-through rate is 1%, which is rather standard. Then 1% of 200.000 is 2.000.

If the cost per click (CPC) of an AdSense ad is 0.01 USD, then you make 20 USD each time someone clicks on your ad. If the CPC is 1 USD, then you make 2000 USD every time someone clicks on your ad.

Of course, the chances of finding advertisers that will pay 1 USD per click are quite small, but you probably got an idea of how the system works.

  • Maximize Your AdSense Revenue

One common mistake most of our clients make is thinking that if they generate more traffic, then they will automatically increase their AdSense click through rate. Well, it depends a lot on the quality of the people you bring to your website. If users click on your articles but bounce rapidly because the content is poor or not relevant to their needs, then that will reflect in your income.

Focus on creating fresh and quality content. Don’t be afraid to give your own take on a particular subject. If you have a different theory about how the last Avengers movie will end, don’t hesitate to share it with your readers.AdSense

Back to You

Whether you are running ads through Google AdWords or Google AdSense, one thing is clear: both need your time and attention to work. Sure, one is more hands-on than the other, but the differences aren’t that big if you are committed to doing everything by the book.

And, oh boy, it’s a lot of work!

If you want someone to take some of the pressure off your shoulders, then you can find a trusted partner in Australian Internet Advertising. Our experts are here to teach you, guide you, and help you conquer the realm of Google Ads and boost your revenue.

Book in a free 30 minute strategy session
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