An Introduction to Google Ads


  • About a third of all money spent on online advertising is with Google.
  • Google Ads uses a pay-per-click (PPC) system, so you only pay for the traffic that actually visits your site. 
  • While Google Ads has the potential to transform a business’ online traffic, it can also be hugely confusing and a potential money-pit for the uninitiated.
  • This guide will help you understand the basics so you can start making the most of Google Ad’s potential for your business.

Just How Big is Google Ads?

There’s not much that needs to be said about Google’s dominance of the search world. The digital behemoth has 92% of the global search market, and users make a staggering 5.8 billion searches a day on their platform. For many, the word “Google” itself is the go-to verb when talking about searching for something online.

What’s relatively less known, but far more relevant for businesses, is how Google has leveraged this search market dominance to create the single most important online advertising platform in the world. Again, the statistics speak for themselves: 

Why Businesses Need Google Ads

Google is all about results. They want searchers to get the best results for their query, and they want advertisers on their platform to get the best results for their ad spend. Not only does (basically) everyone use Google to find what they’re looking for, businesses who use Google Ads also get greater results. As a business model, it’s win-win. From the perspective of advertisers, the advantages are huge. 

Here are just a few:

  • They get to jump straight into the action. You can start an account and get an ad campaign up and running literally within minutes (though it’s not highly recommended).
  • Google Ads uses a pay-per-click (PPC) system, so you only pay for the traffic that actually visits your site. 
  • People searching for something (and thus seeing your paid search ad) are already showing their intent as opposed to ‘drive-by’ display advertising. 
  • With the keyword auction process taking into account factors other than simply dollar amounts, a mom-and-pop store can compete with multinationals. 
  • The analytics available for who is visiting your site, what they’re searching for, and how they act give incredible detail on who your customers are and how to convert them. 

Google’s overarching goal (apart from taking over the globe) has always been to make its search engine as effective as possible. This means they’re constantly tweaking algorithms and including and weighing thousands of factors so if you search for ‘jewelry san fernando’ you’ll get places that sell jewelry in the Valley, or ‘calories apple’ will tell you how many calories in your lunch snack. Heck they’ll even decipher ‘ptza scrammento’ to figure you’re looking for places to grab a slice in Sacramento. That dedication to giving users what they want is why people use the search engine and Google brings the same hustle to its Ads platform. 

Be warned, however. While it has awesome potential to transform a business’ online traffic and conversions, it can also be hugely confusing and a potential money-pit for the uninitiated (and even experienced users). 

This guide will help you understand the basics so you can start making the most of Google Ad’s potential for your business.

Google Ads: How it Works

The basic concept of Google Ads is that advertisers bid for certain keywords, and the winners of the auction have their ads displayed. Advertisers can choose which kind of ad they want for their campaign, which affects where they are shown on the Google network. There are four options:

  • Search ads: These ads appear on Google’s search results page. They are text-only and look just like other ‘organic’ results (but with ‘Ad’ written beside or below it).
  • Display ads: These can include pictures and are shown on websites that are part of Google’s display network.
  • Video ads: These are videos that are shown before or during YouTube videos and other video partner sites.
  • App ads: These are shown inside applications that have signed up to the Google Ads network.

The Auction Process

One of the biggest potential pitfalls of Google Ads and how you can end up losing money rather than raking in revenue is by not understanding the auction process. The basis of payment for an ad anywhere on the Google network is that you pay a certain amount for each person that clicks on your ad. This is known as cost-per-click (CPC), and in the auction process, you let Google know what your maximum CPC offer is, which is then your bid price.

The auction process occurs every single time someone searches for a particular keyword. In the beginning, Google had a system that was more akin to a traditional auction: a straight shoot-out and whoever bid the most won top spot. However, in their constant drive to match their searchers’ intent with what they were shown, Google realized this system was flawed. 

For example, say a particularly zealous and deep-pocketed local restaurateur, the owner of Jean’s French Bistro, wanted to go wild with their marketing budget. They could bid top dollar for every related keyword in the area so no matter what someone typed, whether they wanted Chinese takeout, a steakhouse or frozen yogurt, the first ad would direct them to Jean’s French Bistro. 

This obviously wouldn’t fit Google’s mantra of matching searcher intent to results so they decided to introduce several other factors into deciding how much the advertiser will pay per click, where the ad will be shown or even if it will be shown at all. These are decided by a score known as Ad Rank, which is calculated for every auction. 

What is Ad Rank?

The factors that go into creating your Ad Rank score are:

  • Your Maximum CPC bid: This tells Google how much you are willing to pay for the given keyword.
  • Quality of the ad itself and landing page: Google assesses how well your ad and associated landing page suit what the searcher is looking for. The overall level of quality for your ads and landing pages can be seen in your Quality Score.
  • Ad Rank thresholds: These are basically the reserve CPC price for the ad. The thresholds are affected by ad quality, search context and other factors. Any ads not meeting the threshold won’t be shown.
  • The competition: How high the rank and quality of your competitors’ ads are.
  • The search context: These are additional elements about the search which help decode what exactly the searcher wants. They include the person’s location, what device they’re using, what time it is and other factors.
  • Ad extensions: These are other pieces of information you include in your ad such as links or a phone number.

When someone searches for a term, like ‘Chinese takeout’, this Ad Rank score decides how relevant each bidder is and where they will appear on the page. So, if you’re not relevant (like Jean’s French Bistro) you most likely won’t have your ad shown, no matter how much you bid. Having a higher Ad Rank also means that you can pay less per click than competitors while also being shown before them.

This means that, while it can be a good experience to put $50 on your Google Ads account and find out a bit about how it all works, before launching a proper campaign you need to have all your ducks in a row so to speak. Poor ad or landing page quality and low keyword relevance will result in an ineffective campaign that at best doesn’t get you quality traffic and at worst wastes money that could have been spent elsewhere.

Trust the Experts with Google Ads

As you can see, Google Ads is hugely important for any business looking to boost their online advertising but also quite complicated. The returns can be huge if you can get it right but that takes time and practice honing your skills as you go through the levels, like trying to become a Google Ads jedi. 

Of course, while we wouldn’t refer to ourselves as Google Ads jedi (as true jedi are meant to be humble), we’re always happy to help our customers to navigate the labyrinthine world of Google ads. Whether it’s designing campaigns, building a holistic search approach or just giving advice, we love exploring Google Ads’ possibilities. So why don’t you get in touch to have a chat and see how we can help you out with whatever you need to know about Google Ads. You can send us a message here to arrange a call back.

Author avatar
Mauricio Moreno
Mauricio has close to 20 years of digital experience and a core foundation in the technical side of SEO. He’s led and executed strategy both in-house and on the agency side and enjoys defining successful strategies for our clients.
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