Trillions of Searches…
Billions of Dollars…
Millions of Companies…
Thousands of Ads…
One Single Platform… Google.
Did you know that $92.4 billion was spent on advertising only in 2017? This figure is exponentially growing today, proving the effectiveness of paid advertising. Many businesses are now keen in investing on paid ads to promote their products or services. Google Adwords serves as a default and most trusted platform to run online ads with an ease of accessibility. In this guide we’ll discuss more on how paid search works.
How Does Google AdWords Work?
Before we start off, you need to comprehend some basic terms.
Keywords are the words or phrases that a user looks up in the Internet and sees your ad.
The search engine counts the no.of clicks on your ad and charges you accordingly. It also accounts impressions, which that how often your ad has been shown. If you divide the clicks with impression you’ll get Click Through Rate. This tells the no.of users landed on your advertized page.
Clicks / Impressions = Click Through Rate
CTR is vital because it shows whether your ad is performing or not. Adwords marketplace is an auction house. Here you need to set a budget and bid. Bid suggests that amount that you’re willing to play for each click. Google obviously wants to make more money, so it shows up your ad only if other entities/companies aren’t bidding more than you on the targeted keyword.
However if others are bidding less on your targeted keyword, google will not spend your whole bid amount but optimizes the impressions and your bid. So, you might end up paying less than your bid per click!
If the ads produce good quality score, your Cost-Per-Click or CPC can be lower than your actual bid amount. This is an important metric & it is calculated by the relevancy of your website in reference to your ad.
Nothing actually matters if your ad don’t get converted! Conversions are new leads or sales. This means the user has taken the action that you wanted them to take. These conversions help you quickly regain the money you spent on your ads.
You need to sell something, in order to make money.
That’s what we’re going to talk about.
There was a time when you could bid on almost anything.
But, Quality score settled the scores of inapt ads.
This metric is a blend of many things so as to determine how good or relevant is your offer for the user who searches for it.
So, how is quality score determined?
Each keyword has its own quality score. Two keywords within the same adgroup will have different quality scores.
For example, a user searches for Water Parks. Which one of these key phrases do you think is more relevant?
- Indoor Water Parks.
- Garden Water Slides.
Simple right! Even though the keywords are related, one is obviously a better fit but you ideally want to be as specific as possible. Alongside relevancy, Click-through-Rate is also taken into account. The higher the CTR, the: better and relevant the ad.
So, google will look into your CTR to determine how well your ad matches a user query.
There is another side to the coin – your landing page, which too affects your ‘Score’. It needs to be relevant to the search query and must be easily navigable. So if a user searches for Water Parks and clicks on your ad, it must be redirected to a web page or landing page which talks about Water Parks. Adding to this, landing page must be navigation-friendly. If a user finds its sketchy, he will bounce immediately, which is a negative sign for Google. It thinks that your page sucks and your score will be lowered or you’ll need to play more to make up the ground.
It’s true! This is the trend with Google Adwords. If you do it right you can rak on the top by paying less than your competitors and if you fail, you’ll be shunned or need to pay more to persist.
This equation often comes back to Ad rank and quality score. Ad rank is a value that determines your ad position in relative to other ads. It also notifies whether the ads will appear or not.
Ad Rank is calculated by considering your maximum bid amount and the quality score.
Ad Rank = Quality Score x Maximum bid amount.
So google takes an account of your maximum bid, Quality Score and Ad rank to determine what you’re going to pay. It then compares with your competitors.
Some industries need only a few bucks per click. But, tables turn when we talk about competitive niches. CPC for such industries can range from $50 to $100 for high competition keywords.
It’s expensive. But with adwords it’s affordable. When you know what you’re doing and doing it right, you can make 10x the money you invested. That’s the power of Google Adwords.
Are you determined to grow your business? Do you want more sales?
Kick start your growth with Google AdWords.
Set up your account to run a campaign and you’re done!
Just stay back and count the money…