An In-Depth Look at How Google AdWords Works

Google AdWords is a popular online advertising platform utilized by many business owners. It aims to provide increased traffic through search queries where advertisers pay to display product listings, services, and short advertisements. The realm of Google AdWords can be quite tricky to understand for beginners, but once you nail down the basics you can start right away and begin using this digital marketing strategy to its full effect.

SMEs and large companies can both use Google AdWords to bring increased traffic to your website. Not only does it work great for your online store, but Google Adwords can also provide an increase in foot traffic to your physical store if done correctly. If you’re interested in learning how Google AdWords works, then you came to the right place. In here we’ll be discussing the fundamentals of Google AdWords so you too can reap the benefits of this online advertising platform.

What is Google AdWords?

Google AdWords is a PPC (pay-per-click) advertising platform developed by Google in 2000. This allows you to display your website at the top of organic search results when using Google. Google AdWords enables businesses to set a budget for advertising and they get to pay only when someone clicks the ads. Essentially, it works like an auction where marketers bid on specific keywords relative to the products/services they are offering. The prices can vary for every keyword, with insurance keywords being one of the most expensive to bid on alongside keywords relating to legal matters.

How is Google AdWords priced?

Speaking of prices, Google implements a scoring metric called a quality score where it determines the price of your keyword by examining its quality and relevance as well as the ads you’ve set up. Your CPC (cost-per-click) will be determined by the quality score which affects your ad rankings during the ad auctioning. There are a couple of factors that affect your keyword’s quality score and these are:

  • The relevance and quality of your landing page based on Google’s standards.
  • The performance of your CTR (click-through-rate)
  • The relevance of your ad copy.
  • How good your overall AdWords account has performed overall.
  • How relevant the keywords are to its assigned ad group.

These are just some of the factors that will help determine your quality score. Only Google knows the precise Many seasoned digital marketers rely on these factors to achieve the best quality score possible for their ads. Perhaps one of the most important factors to consider is the performance of your CTR (click-through-rate). Google uses your CTR to measure how relevant and helpful your ads are to viewers. An advantage to having a good CTR are higher ad rankings and lower CPCs which will help you achieve a better ROI (return of investment). Your quality score will significantly impact the performance of your ads so make sure to tweak these factors to get the best quality score you can get.

Google AdWords is a highly cost-effective digital advertising platform that many businesses should use. There’s no minimum investment and even small businesses can thrive by using this platform because there are less risks involved when compared to other advertising platforms that require more expensive costs upfront.

Where should your ads be targeted?

Your ads will appear either on the SERPS (search engine results page) or the Google Display Network (GDN). Choosing to have your AdWords displayed on the GDN will be shown as a banner ad across the Google Adsense Network where it can reach almost up to 90% of viewers. Knowing where to target your ads depends on a few key factors such as considering where your ads are most likely to be seen by your target audience and your overall goals for your business. An AdWords campaign on SERPS is beneficial under the following conditions:

  • If you have a restricted budget. Running an AdWords campaign on SERPS are generally easier to measure and are more likely to drive direct conversions.
  • If you’re selling products or services for emergency use. Another benefit of running an AdWords campaign on SERPS is that users will be able to see your offerings when they need products or services on an as-needed basis to help solve their problem. This is because they are more likely to be on search engine results pages to find a solution.

Advertising on the GDN is much more beneficial if you have a larger budget to allocate, especially if you’re looking to increase your brand awareness.

Why you should start investing in a Google AdWords online marketing campaign?

Many people are reluctant to get their feet wet with Google AdWords. Despite being an effective online advertising platform, people fear that the concept might prove quite challenging to grasp, and it is up to a certain degree. It’s one of the most difficult digital marketing platforms to understand and it can get quite confusing when setting up campaigns.

The constant tweaking and monitoring of your campaigns can be quite a hassle. If you don’t have a full grasp of the basic fundamentals of Google AdWords, you might spend your hard-earned money quickly and get little to no results because your campaign isn’t set up properly. But despite the challenges, Google AdWords is a very rewarding advertising platform that can help drive traffic and potential profit to your business.

Google AdWords offers a lot of benefits that’ll help you grow your business such as:

  • Increasing brand awareness. Back in the day, to get your brand out there you have to rely old-fashioned newspaper or TV advertisements. With Google AdWords, you can effectively advertise to the audience when they search about your products/services on Google, helping you increase your brand awareness which is important for SMEs to expand their brand recognition.
  • It’s cost-effective. Since you’ll only pay when someone clicks on your ad, Google AdWords is an extremely cost-effective way to advertise. You can determine how much you want to spend by setting a budget from $10 a day to $1,000 a day. If you have set up a great campaign, your CPC will lower over time and you’ll benefit from increased traffic without increased cost.
  • Sophisticated targeting. In order to maximize ROI with search marketing, sophisticated targeting tools are very important. The targeting capabilities of Google AdWords allow advertisers to tweak their campaign with tools such as location targeting, auto-tagging, language targeting, and many more.
  • Higher ROI. One of the reasons why Google AdWords is so popular is because businesses can get a high return of investment compared to other advertising platforms. The key is to constantly analyze your campaigns and focus your efforts on areas that areas that provide you with good  ROI. If parts of the campaign are costing you money, discard them to prevent further losses.


Understanding the basics of Google AdWords is very important if you want to utilize this platform successfully. There’s a learning curve with Google AdWords and if you’re diligent enough to research and study its concept, you’ll be able to better understand how it works and how to grow your business with it. Focus on the basics first and soon enough you’ll be able to create successfully optimized ad campaigns.

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