Insights.
How Google Ads advertising works on the search engine
10 Nov, 2021
Marketing
How Google Ads advertising works on the search engine
Google Ads is a kind of auction where advertisers compete to see whose ad will appear at the top of the Google search engine.
The advertiser bids, i.e. determines the price he is willing to pay for a click on his ad. How much he will be charged depends on Google and the bids of other competitors. But we must note that the advertiser pays only when someone clicks on his ad.
In addition to the bid, Google also takes into account the quality of the ad itself. Thus, all advertisers, regardless of the offered price, compete and win the first place on the search engine. With a limited budget, quality and relevant ads can fight and get the first position among ads.
Advertisements are displayed in Google Ads based on the keywords you enter into the system. These keywords should match the ones your potential customers are searching for on Google. For example, if you are selling chairs, you will target keywords like "chair sale" or "chair sale".
Before you can even start with Google Ads advertising, you need a few things:
- Web page
- The product or service you want to sell
- Advertising budget
Step by step, Google Ads works like this:
1. Search on the Google search engine
person is renovating a living room and needs new chairs. The first thing a person does is to go to Google and type in "quality living room chairs for sale" to familiarize with the chairs on offer.
2. Google displays results along with ads
Google returns relevant organic results, and at the top and bottom of the results page are paid results.
If your campaign is set up in the best possible way, your ad will appear at the very top. Given that the top search engine results receive the most clicks, there is a strong likelihood that your advertisement will be the most clicked on the Google results page.
3. Click on your ad
So, a person sees your ad and clicks on it. The ad takes person to the page where your offer is listed. There, visitors can learn more about your product range and become interested in your offer. It is highly recommended to provide all essential information on your website. Doing so enables visitors to easily access your address and phone number, facilitating their purchasing process.
While advertising may seem straightforward, numerous options and possibilities can make a significant difference. These factors determine the success of advertising campaigns, resulting in either wasted resources or substantial profits.
What the Ads auction looks like
Upon initial review, the Ads auction may appear complex, leading to potential inquiries. To alleviate any confusion, we aim to streamline the information through visual aids.
Google determines the placement of advertisements by considering the maximum cost-per-click and Ad Quality Score.
In the picture, we see four advertisers trying to win the best places on the search engine. Each of them offers a different price per ad click. Also, each of them has a different ad quality score.
The picture shows that advertiser 4, although he offered the highest amount, will not finish in first place. Advertisers 2 and 3 may still appear on the search engine results page, even with a slightly lower ad quality score and bid price. However, they will not appear in top positions. While advertiser 1 offered the lowest amount and finished in first place with the best ad quality.
The following picture shows how much each advertiser will pay, and how it is calculated.
We see that advertiser 1 paid the least for his first position, while advertiser 4 paid the most. Which means that a big factor in the Google Ads auction is the ad quality score.
Quality Score is an indicator that tells us how roughly our ad will rank. Ratings range from 1 to 10, of course, the higher the rating, the better your ad will rank. Likewise, a poor quality rating means higher advertising costs.
Quality score, i.e. the rating of the quality of the ad depends on:
- Percentage of clicks on ads, i.e. click-through rate (CTR)
- Relevance of keywords in the ad group
- Landing page
- The text of the ad and its relevance
The structure of the Google Ads tool
Ads account
When you create your Ads account, you will enter all information about billing, account access, notifications, etc.
Campaigns
You can create campaigns under the account. For each campaign, you select the daily budget, type of advertising, target group (location, language), bidding strategy for ads, and several more advanced settings.
Ad groups
The main function of Ad groups is the organization of keywords and ads into small, meaningful units. With the help of Ad groups, your ads will be displayed only for specific keywords that are completely related to the text in the ad. It is recommended to set it that way. In the Ad group, you also set the maximum price per click that you are willing to pay.
Ads
Ads ads consist of a title, subtitle, description, a link that will be displayed on the ad, and a real link to the website.
The ad is an extremely important part of this whole story, because the content of the ad is the main motivator or demotivator for clicking on the ad. If you intrigue the target group with the ad, there is a higher chance that they will click on the ad.
Keywords
Another essential part of advertising through Ads are keywords. The keywords you enter into the system will be the trigger for your ad on the Google search engine.
Without going into details, these are the key parts of the Google Ads tool, without which advertising would not work. This text has only scratched the surface of everything there is to say about Google Ads, but the best way to fully understand it and learn to use it is to start advertising.
Dictionary of the most frequently used terms:
- Cost Per Click (CPC) is the amount an advertiser pays for one click on an ad
- Cost Per Mille (CPM) is the amount an advertiser pays for 1000 impressions (impressions) of an ad
- Click-through Rate (CTR) is the percentage of people who clicked on an ad
- A conversion occurs when a user clicks on your ad, lands on your page, and either fills out a specific form. It can also occur while making a purchase, or completing any other predefined goal.
- Ad Rank is a score based on your bid, ad relevance, landing page experience, and the expected impact of extensions and other ad formats.
- Quality Score represents Google's assessment of the quality and relevance of keywords and ads.
If learning about Google Ads doesn't sound like something you'd be interested in, feel free to take full advantage of Google advertising with our help. Check out our Google Ads advertising service and contact us.
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