How Does Google Ads Work – The Basics & Tips to Get Started

You’ve probably heard about Google Ads countless times. That’s likely why you’re reading this article after all.

Everyday there are over 8.5 billion searches on Google and you’re probably one of those searchers. Google helps billions of people find answers to a plethora of queries while also including ads on the majority of search results. Google Ads is one of the most effective ways of generating high intent traffic to your website.

This article will go over what Google Ads is, how Google Ads works, and provide some basic tips to get started.

What is Google Ads?

Google offers businesses the ability to show paid ads to customers searching for what you offer. You can also use Google to put ads on YouTube, Google Shopping Network, GMail, Google Maps, & Google Display. 

Here’s an example of Google’s search engine results page (SERP) with a few ads below. The ads are denoted with a bolded “Ad” label above the organic search results at the bottom of the page.

Over the years, Google has given advertisers the opportunity to place ads on a wide variety of ad inventory. To keep things simple, we’re going to focus on Google Search Ads because this is what Google is best known for and where you’re likely to find your best opportunities when you get started.

What Makes Google Search Ads So Valuable

There are quite a few reasons which boil down to the following:

  • Billions of people use Google to search for products/services that you provide.
  • Search is user intent. There’s no other marketing medium that currently provides this level of intent with cold prospective customers.
  • You only pay for clicks with Google’s Search campaigns, not impressions. This means that every impression has the ability to be a valuable impression. On top of that, if you don’t get someone to your website, you don’t pay for that impression.
  • You can pick which search terms (keywords) you think your potential customers are searching for, create a customized ad, and narrow down your targeting in very specific ways (location, time of day, device, gender, income, and so much more).

How Does Google Ads Work

Google is focused on creating a great experience for its users and its advertisers through its ad auction. All advertising platforms like TV, Newspapers, and Social Media (Facebook, Instagram, Tik Tok, etc) have some way of deciding which ads to show when.

That’s where the ad auction comes into play – Search engines determine which ads to show on a search query and in what position based upon the following criteria:

  • An advertiser’s eligibility for the auction
  • The advertiser’s bid for a given keyword that is showing for a user’s search query
  • The quality score & completeness of the ad creative

After that is considered, Google will give the advertiser what is called an “Ad Rank” for that auction then show the ads based upon their rank. 

After your ad rank is determined, Google then determines how much you will pay if someone clicks on your ad when it is shown. Here’s an example of how the ad auction works:

If you didn’t get all that, don’t worry, we will break it down:

  • Google gives each advertiser a quality score when they advertise between 1-10 (1 is lowest & 10 is highest).
  • What you bid for a keyword is then multiplied by your quality score to get your Ad Rank
  • The ad rank determines where your ad shows in the search results (ad position).
  • Then after your ad position is determined, Google calculates how much you will pay if someone clicks on your ad (formula below).  

What is Quality Score

Quality Score is Google’s way of measuring how relevant Google believes your ad experience will be to users for the keywords that you’re bidding for. Like most businesses, Google wants to make money, but it also wants to make sure that its users are getting the most relevant content when they complete a search.

There are three things that Google considers when calculating a quality score:

  • Expected Click Through Rate – how likely is someone going to click on your ad vs other competitors in the same ad auction.
  • Ad Relevance – Google wants to make sure that you give users something relevant to their search query. 
  • Landing Page Experience – when users click on your ad, are they seeing a page that reflects the intent of their search and do users get a good experience on your page? This can be passively determined by looking at your bounce rate, site speed, and conversion rate.

Here’s how Google weighs each component of quality score:

Here are the key takeaways you should consider:
  • You should try to create a relevant ad experience by giving prospects what they want when they’re searching for it (ex. If someone looks for a baseball card, you should have an ad for baseball cards).
  • How much you bid for a keyword can make up for a moderate or lower quality score, though you should aim for a higher quality score because you can pay less for the same search queries.
  • Expert tip – it’s really hard to get 9-10 quality scores. Besides your own brand terms, most people end up with 3-7 as a score for their keyword. Furthermore, once you start a new campaign and get a quality score, it is very difficult to drastically increase or decrease the quality score you get.

Don’t repeat names or use UTMs that are hard to read, otherwise you might just make it more difficult to analyze your results. 

If you have something like a term that changes frequently, it can be good to use dynamic values. The prior list we provided gives the dynamic values, though here are some common dynamic UTM values that we have liked to use:

  • Campaign Name: {_campaignname}
  • Keyword: {keyword}
  • Placement (this will tell you where your ads were placed which is useful for display or youtube ads): {placement}
  • Campaign Id (good if you want to automatically match back data from Google Ads to your CRM): {campaignid}
  • Gclid (probably one of the most useful UTMS that will pass back the Google click identifier of a click that comes from your ads. More details here, this allows you to setup offline tracking to import conversion actions from a CRM into your account): {gclid}
  • There are several others in this list you can use as well depending upon what you need to accomplish.

If you’re finding that UTM setup for your account is becoming difficult or you’re not able to track back results from your campaign for some reason. Then feel free to book a free consultation where we can review your tracking needs.

Useful Tips When You’re Getting Started

For a really basic step by step setup, you can follow Google’s prompts. Here are some tips as you get started:

  1. Use exact match keywords – no matter how much Google touts broad match terms, you should start with exact match keywords with your campaign to specifically target the search query you believe your prospect is using.
  1. Mirror the keywords you have in your ads – adding keywords like blue shoes to your ads when you target the keyword, “blue shoes” will help improve your intent.
  1. Use unique benefits & differentiators – your ads and landing pages should distinguish what you offer from anyone else your bidding against in the ad auction. This can improve your quality score and usually helps you achieve your business goals.
  1. Know your target audience – if you’re a waffle shop in Los Angeles, then you should target people in Los Angeles looking for waffle shops. It sounds simple, but it’s easy to lose sight of your target audience when you’re setting up campaigns.
  1. Split out your brand & non-brand terms – your brand is going to be your highest intent and easiest terms to get results on. Make sure these terms are split out into their own campaign or ad group.
  1. Know your budget – make sure you know how much you have to start with and know what you want to spend your budget on. Furthermore, give yourself loose expectations to help understand what success looks like.
  1. Setup Tracking – speaking of knowing what success looks like. Before you spend a single cent, you definitely should set up tracking to see what people did after clicking on your ads.
  1. Keep testing & refining – whether you’re getting great results to begin with or struggling, you should keep testing different keywords, ad copy, targeting, and so forth to improve. Your next test could be one of the most successful things in your marketing mix.

Final Thoughts

Google Ads can be one of the most effective marketing channels for your business if you use it correctly. Knowing the basics about how Google Ads works will help you plan out your campaign structure and enable you to achieve your business goals.

If you need help getting started on Google Ads, then you should book a free consultation with us today. We can help you with your utm setup needs.

Centaur Consulting Group

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