An introduction to Google Adwords: How does it work and what can you expect

by | Sep 22, 2021 | Digital Marketing, Google Advertising

f you’re a small business owner with a website you’ve probably heard the term PPC advertising. While it may refer to advertising on any of the search engines available, most people associate the term with Google Adwords. It forms part of the broader concept of online advertising and when used correctly can supply your site with a steady flow of qualified leads.

What is PPC advertising?

PPC advertising is a form of online advertising that allows you to display an advert for your goods and services on a search engine. When someone uses a specific search term on Google, it triggers your advert which then appears at the top of the search results page.

If your wording is persuasive enough, and relevant to their search, they may be tempted to click on your ad and visit your website to explore further. And it’s only once they’ve clicked on your ad that you have to pay for the privilege of advertising on this medium.

We’ve already mentioned the benefits of advertising online, so now we’ll explain a bit more about how the process works.

How does PPC advertising work?

It’s not simply a case of picking a few relevant keywords, creating an ad and waiting for visitors to flock to your site. It’s just as competitive as any other marketing medium and that means you need to bid for the opportunity to get your ad in front of potential customers.

Ad Auctions is the process that Google uses to determine when and where your ad is displayed. In order to do this (and give other advertisers a fair chance to display their ads), Google bases their decision on two factors:

1. CPC Bid: This refers to the maximum amount you’re willing to spend for your ad to be displayed for a particular keyword.
2. Quality Score: This is a value assigned to your ads based on your click-through-rate, ad relevance and landing page quality.

Google inputs these values into its algorithm to determine your ad ranking. This is how your Ad Rank is calculated:

Ad Rank = CPC Bid x Quality Score

But determining where your position on the search results page against the other businesses bidding for your keywords is slightly different. In this case, the formula is as follows:

Your position = Ad Rank of the bidder below you / Your Quality Score + $0.01

If you’re wondering why Google doesn’t simply award first place to the highest bidder, it’s because this doesn’t make financial sense for them. Remember that Google has a reputation to maintain. Users rely on Google to provide relevant, useful information. If Google didn’t give you the right answer every time you searched for something, you’d soon abandon the for another search engine that does a better job.

In addition to this, advertisers without big budgets would also look elsewhere to spend their advertising budget. So Google has worked out how to provide users with relevant ads and allow advertisers to display their ads to the potential customers at a reasonable cost.

What does this mean for potential advertisers?

Now that you have a better idea of how Google ranks adverts, you’ll see why any campaign you create should focus on these three factors:

1. Keyword relevance

This is probably the hardest part of setting up your Adwords campaign. Choosing the right keywords is crucial for success and requires a balance between keywords with low competition (to minimise costs) and those which are relevant to your target market.

The idea is to use the keywords or search phrases your audience is using to find your business, products or services online.

2. Landing Page Quality

Your ads don’t have to send visitors straight to your Home Page. In fact, it’s better for your Ad Rank if your visitors land on a page that’s relevant to your ad and the search terms they used to find you.

For example, if you sell shoes and you create an ad for running shoes, it would be better to send visitors directly to the sport shoes section on your site. This saves them time looking for the information they need and ensures that your page is relevant to the ad you’ve created.

The page your visitors land on should be filled with relevant content, include some persuasive copy and a clear call to action so they know exactly what you want them to do once you get there.

3. Quality Score

Remember that overall, Google is looking for a relevant ad that links to a relevant page that has been optimised to convert leads into real, paying customers. And you benefit from ensuring that all these requirements are met because a high quality score will earn you more clicks at a lower cost.

What should you expect from PPC advertising?

As with any form of advertising, you cannot expect miracles, but online advertising remains affordable and effective for both small and large businesses.

Here’s what you should expect from your first Google Adwords campaign:

  • It will take time to see the results you want

Keep in mind that one of the factors that influence your ranking is your click-through-rate (CTR). Your CTR is calculated by the number of times your ad is clicked, divided by the number of times it was displayed.

When you’re starting a new campaign, this information isn’t available until it has run for a while. So Google will use other factors to determine your ranking. You’ll need to give it at least two to three weeks before you’ll see any increase in the number of new visitors to your website.

  • You’ll need to tweak and monitor your campaigns

You’ll need to take some time to test the different elements of each campaign to see what works and what doesn’t. It could be your choice of keywords, your ad text or the landing page you’re sending visitors to that need some work.

  • You’ll develop a deeper understanding of your target market

This is one of the unexpected bonuses of running a PPC campaign. If you monitor your campaigns on a regular basis and adjust your keywords, ads and landing pages, you’ll gain a deeper insight into what your potential customers respond to best.

Of course, you don’t have to do this all on your own. You can outsource your PPC campaigns to a professional company. Any business can use PPC campaigns to drive more traffic to their website and connect with their target audience. You don’t need a big budget and monitor the results, you can craft a PPC campaign that delivers the results you want.

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