How Does Google Ads Work

Understanding Google Ads –

Creating a strategic plan for your Google Ads will be your key to success. Going in without a business goal is a recipe for disaster!

Below is everything you need to know about Google Ads and the different advertising networks, and options you have to run a successful Ads Campaign against your competitors. And most of all – ROI (Return On Investment)

In a nutshell – Google Ads involves running ads based on keyword bid-and-buy and then using compelling ads and landing pages to get visitors to buy your product or use your services.

After a visitor clicks an Ad, the advertiser pays for the click in hopes that it will convert to a sale.

The most commonly used methods of advertising are CPC (Cost Per Click) or CPM (Cost Per Thousand Impressions)

CPC – You pay every time a visitor clicks on your ad (CPC is more for driving conversion)

CPM – You pay every time the ad appears on a specific advertising network (CPM is more for brand awareness)


Make no mistake, Google Ads can be run successfully with a low budget. But that does not mean your budget is being utilized correctly. It simply means you are capping it at a certain level.

The question at hand is – is your ads budget being utilized correctly? If not you will be generating poor results and simply drain your cash flow for almost no noticeable ROI (Return On Investment)

Depending on your business niche and how expensive keywords are 5000 bucks could be far more than you need, or barely enough to scratch the surface of your advertising campaign.

Keyword cost-per-clicks can vary from cents to Dollars to hundreds of Dollars, and the location could also impact the cost-per-keywords.

For example, if you are selling shopping products you’ll be paying a few bucks per click. But if you are looking to drive lawyer consultations, you’ll be paying hundreds that amount per click.

By taking average conversion rates, and cost per clicks for keywords in your business niche, you can plan out a realistic budget that will determine how much you need to spend, how many conversions you can expect on that ad spend and a general prediction of ROI (Return On Investment)

Let’s say that your business conversion rate is 5%.

This means that you will need to generate 20 clicks to land a single conversion (conversion is when someone contacts you and does not necessarily mean a sale)

Google Ads Advertising Networks

Google Ads is currently split into two different advertising networks, each one containing unique advertising options to fit your business goals.

Search Network

Google Search Network Ads

The Search Network contains advertising that appears above and below the organic search results on Google, and other Google features such as Google Maps and Google Shopping, as well as partner sites on Google that show text ads.

Display Network

Google Display Network Ads

The display network focuses on platforms and advertising methods that are not text-based such as YouTube, G-mail and many partner sites, such as sites that display image ads on the sidebar or main content of a website that use Google AdSense.

Google Ads Rank

Google rank your ads based on Ad Rank, which is used to determine the position of your ads.

Factors of Ads Rank:

Bid amount: the higher your bid, the higher your rankings.

Auction-time ad quality: quality score (more below)

Context of search: location, device, time, etc. relating to your ads. Is your ad the best choice, logically based on the context of each person and your current offering?

Ad extension impact: do your ad extensions make improvements to your ad that the visitor can benefit from?

Google says,

even if your competition has higher bids than yours, you can still win a higher position at a lower price by using highly relevant keywords and ads.

So in other-words – your ads need to have a High-Quality Score, matching contextual information and higher CTRs than average.

Google Ads Quality Score

Quality score is a rank from 1-10 of how each ad or keyword is performing.

The quality score is made up of three distinctive portions:

Expected click-through-rate: If your average CTR is low your quality score will be low.

Ad relevance: How relevant are your ads to your landing page?

Landing page experience: Is the landing page relevant to your ads? (offers and keywords)

The above three factors are all important factors to gain a high-quality score.

Ad Quality Score Footnote

You can’t simply bid high on keywords. Your quality score also needs to be high. Higher Quality Score gives advertisers better Ads position, which means more impressions as a result. The higher your ad quality score, the less you will pay for your clicks and final acquisition costs.

Google Ads Retargeting?

If a user interacted with your previous Ad but it never converted to a sale, you can use remarketing to bring visitors back for a second chance at driving the sale.

Retargeting targets audiences or keywords, showing their ads on sites that potential customers are browsing.

Automated Bid Adjustments

Google Ads offers both automated bid adjustments and manual. As much as automating things can be useful, it can also destroy your budget in the long run.

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