Google AdWords has been around since 2000, and started off with a mere 350 advertisers. Today, 1 million businesses use it to connect with their clients, and it’s also trusted by many users to find the goods and services they are looking for. In this article we explore the basics.
What is Google AdWords?
AdWords is an online advertising system that allows businesses the opportunity to display their ads on certain search terms in Google’s search results. However, Google also allows for the placement of image and text ads on websites within their content network, these are known as Display Ads.
These ads are clickable, and every time a user clicks on these ads, an advertiser (business) pays a specific amount and that amount is the result of an auction that happens every time a user does a search.
How does the auction work?
In order for an advertiser to be part of the auction, they need to specify what keywords or phrases they would like their relevant ads to appear for, which is done in the AdWords interface. As a business this is where you also set a maximum amount you would like to pay when a user finally clicks on an ad. This is known as a max CPC (maximum cost per click). However the auction is about more than just paying for clicks and specifying keywords…
Search & exclusion
When a user completes a search, Google will find all the advertiser ads that match that search in the system. Google then disregards the ones that may not be relevant, for example if an advertiser specifies they don’t want their ads to appear at certain times or for users in certain countries.
After ads have been filtered, the remaining ones will appear based on their current Ad Rank. This is where CPC comes into play, as this influences Ad Rank in combination with the quality of the ads, the expected success rate of the ad (will people actually want to click on the ad) and the ad format.
Position & result
Even if your competitor is willing to pay more for a click, it doesn’t mean that they will outrank you, particularly if your ad is highly relevant. It’s also important to remember that every time the auction runs, the results may be different, because there are many different advertisers to compete with.
The display auction
The Display network works in a similar way; it doesn’t involve keyword bidding, but deals more with targeting specific broader audiences.
AdWords & your business
AdWords is open to most businesses that would like to advertise their goods and services, but it’s about more than just setting up a campaign and letting it run. PPC is a lot like tending a garden, where you similarly have to contend with many changing environmental factors, so it’s vital to understand your audience and the industry, as well as continually evaluate and strategise for the best results.
Written by Colette Smith