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What is Google AdWords?

It seems that everyone in the online business world is talking about it, but what is PPC (Pay Per Click) exactly? Having a firm understanding of what and how to use Google AdWords can make a lucrative difference to your profit margins, as well as make a huge difference to the visibility you receive online. But just like most good things, it’ll take a bit of effort to get things going.

For those just starting out and wondering what is Google Adwords, the most basic understanding can come from imagining someone using Google to find some sort of information. The user types in whatever their search query is and discovers a comprehensive list of organic matches, which is basically anything Google deems relevant that hasn’t paid to be listed, but usually is placed there through effective SEO.

Above and to the right of these organic results, however, is where we see our PPC. These are highlighted with a heading verifying that they are ads, as you can see from the example below with StyleTread.

These pages will link to either the most relevant page for the search, or to a landing page that has been specifically created to influence a certain action from a visitor, i.e. sign up with us, get a quote from us, buy this product on sale, etc.

How do the ads get there and how can I use Google AdWords most effectively?

Businesses secure their ad positions through auctions that are regularly conducted by Google, billions of times per month in fact. It can be a confusing process, but understanding it is one of the most fundamental and, in turn, effective ways to truly get the most out of your AdWords campaign.

Once you’ve done some keyword research and determined which will be most relevant to the type of customer you are trying to attract, you can join the bidding process. In order to determine which ads are most relevant and where they will be featured on the page, Google analyse two parts of your PPC: your maximum bid and your quality score.

These are the two main things you need to focus on when creating your campaign, because after all, what is AdWords without these aspects? Firstly, Google takes the amount that you have set as the maximum price you would be willing to pay for every person who clicks on your ad. They then multiply this amount by the quality score they give your overall PPC account to determine your ad rank score. Whoever has the highest ad rank score gets their ad placed at the top of the page, and in the same way the rest of the order is determined.

Your quality score is analysed based on your click through rate (how many people see your ad and click through to your website) and how relevant and useful the information on your page is to the user. This can be an aspect that many business owners overlook when creating their AdWords campaign, but it is absolutely essential to try and get your quality score as high as possible. With a high score, you can achieve an overall better ad rank even if your maximum bid isn’t as high as others.

Recent research has shown that 85% of users don’t click past the first page of their Google results. So, having an ad placed high up on that first page can be absolute gold for driving traffic to your website.

How does AdWords work to determine how much you’ll pay per click?

Your maximum bid isn’t necessarily how much you will pay every time someone clicks on your PPC ad. This gets calculated using the ad rank score of the ad directly beneath you, divided by your quality score, plus one cent.

For example, if the person below you had a maximum bid of $3 and a quality score of 5, their ad score would be 15. Let’s say you’ve ended up with an impressive quality score of 10; Google would divide their 15 by your 10 to get $1.50. Add in that all important one cent and you’d be paying a total of $1.51 every time someone clicks on your ad.

It is then up to you to set how much budget you want to put into your AdWords campaign. Once a certain amount of clicks makes you reach budget, your ad will disappear from search results.

Now you understand what is Google AdWords, what are the key takeaways?

Managing a PPC account can be quite an art, but here are three main takeaways that can get you started:

  • If your ad rank isn’t that high, there are two things you can do. You can improve your maximum bid which can see more immediate effect to your ad rank score, and, more importantly, you can work on improving your quality score. The latter is a much better approach in terms of longevity and cost, and will see the standards of your website improved, which can only ever be a good thing.
  • Think about seasonality and the way it affects your particular industry when determining your budget. For instance, Valentines’ Day is one of the busiest times of the year for flower companies. There’s no point setting your budget so low that your ad disappears in a crucial time, so it is wise to manage your budget according to the demand of your goods or service at that time of the year.
  • AdWords isn’t something that can be set up and left alone. It really needs to be managed, with aspects like your budget, click through rate, ad rank and more needing continued attention. To truly get the most out of your campaign, speak to a one of ourĀ PPC specialists. They will be able to help you find an efficient solution to your specific business and keep your campaign on track!