Meaning

Google AdWords is a pay-per-click online advertising platform that allows advertisers to display their ads on Google’s search engine results page. Based on the keywords that want to target, businesses pay to get their advertisements ranked at the top of the search results page. Since the platform runs on pay-per-click (PPC) advertising, you have to pay only when a visitor clicks your ad.

The Google AdWords marketplaces work like an auction where people bid for clicks. However, it’s not necessary that the highest bid wins. Apart from money, Google also considers the quality score to ensure that the people clicking on the ads have the best possible experience.

What Is Google AdWords?

Google AdWords is an online advertising service developed by Google to help marketers reach their customers instantly. Google AdWords enables advertisers to compete to display brief advertising copy to web users, based in part on keywords, predefined by the advertisers that might link the copy to the content of web pages shown to users.

Webpages from Google and from partner websites are designed to allow Google to select and display this advertising copy. Advertisers pay when users divert their browsing to seek more information about the copy displayed, and partner websites receive a portion of the income they generate.

When someone searches on Google for a particular term, say ‘travel packages’, Google would throw a list of searches for you. But if you look closely, you will notice that the top and the bottom results are generally ads.

To run an AdWords Campaign in Google, you need to either have an existing account or create an account. Once you have created the account, the AdWords campaign will be run using this account. Google's text advertisements are short, consisting of one headline of 25 characters, two additional text lines of 35 characters each, and a display URL of 35 characters.

Google AdWords is organised into three layers: account, campaigns, and ad groups. The account is associated with a unique email address, password, and billing information. The ad campaign has its own budget and settings that determine where the ads will finally appear. The ad group contains a set of similar ads and the words and phrases, known as keywords that the advertiser wants to trigger to show the ads.

Ad campaigns can, and should in many cases, focus on similar products or services. For example, if you run a hardware store, one ad campaign could focus exclusively on autumnal products such as leaf blowers, rakes, and leaf bags, whereas another might focus on power tools, and so on.

Ad groups allow for each campaign to be further subcategorised for relevance. In our hardware store example, one ad group could be for different types of rakes or varying models of leaf blowers. For the power tools campaign, one ad group might focus on power drills, while another could focus on circular saws. This level of organisation might take slightly longer to set up initially, but the rewards - namely higher CTRS at lower cost - make this effort worthwhile in the long run.

The AdWords program includes local, national, and international distribution. Google's text advertisements are short, consisting of one headline of 25 characters, two additional text lines of 35 characters each, and a display URL of 35 characters. Image ads can be one of several different Interactive Advertising Bureau (IAB) standard sizes.

Google AdWords give you huge flexibility. You can choose which keywords you want, which locations you want to show your ad, which age group and language you want to target, the particular days, times and frequencies of displaying the ads and the devices in which you want the ads to be shown. And then, with the help of Google Analytics, you can measure who clicked your ad, if they performed any action or transaction after reaching your web store; how much time they spent in your electronic store, click-through rate (CTR), conversions, conversion rate, cost per conversion, page views, leads and return on ad spend (ROAS).

AdWords offers Cost-Per-Click (CPC) advertising, Cost-Per-Mille (CPM) advertising, Cost-Per Acquisition (CPA) advertising and site targeted advertising for text, banner, and rich media ads. The advertising copy is placed at the top, bottom, or beside the list of search results that Google displays for a particular search query. The choice and placement of the ads is based in part on a determination of the relevance of the search query to the advertising copy. proprietary

The Google AdWords allow keyword matching to get a more precise control over how the users' search phrase should match to trigger your ad on Google search page. There are basically four matching options:

1. Broad Match

Broad match will display your site if any word for which you have bid shows up in the Google search engine. For example, if you have bid for "best engineering college", your site will show up if anyone in the target group types best, engineering college.

2. Phrase Match 

Phrase match will display your ad if the search term contains your keyword. You create a phrase match by putting the keywords in inverted commas, e.g., "best engineering college". So, if someone in your target group types "best engineering college in Delhi" or "India's best engineering college", your site will immediately get displayed.

3. Exact Match

In the exact match, your website link will be displayed only if the exact keywords are typed. So, if someone types "best engineering college", your website link will be displayed, but if someone types "best engineering college in Delhi", your site will not be displayed.

4. Negative Match

  If you want certain words associated with your website not to be displayed in the Google search, you can use the negative search filter. For example, an engineering college might not want "consumer court complaints" to show up when someone is searching details about it on Google search. They can then use "consumer court complaints" as a negative keyword match. This is done by putting a minus sign before the word or phrase, e.g., "consumer court complaints".

5. Remarketing or Retargeting

Google AdWords remarketing is a form of online advertising that enables sites to show targeted ads to users who have already visited their site. Past visitors will see these ads while they are browsing the web, watching YouTube videos or reading news sites, for example - keeping your brand top-of-mind and enticing visitors to come back for more.

If you already advertise on Google, all you need to do is add a piece of Google remarketing code, also known as a tag or pixel, to your website so that visitors can get added to your remarketing audiences through browser cookies. You can customise the code for different pages to correspond to more defined categories.

Remarketing, also known as Retargeting, can dramatically increase your conversion rates and ROI. This is because past site visitors who are already familiar with your brand are much more likely to become customers or complete other valuable actions on your site.

The Google AdWords Algorithm

The ad position in Google search engine SERP (search engine results page) is determined by the AdRank in the auction. The AdRank is a score that's based on the bid amount and the value of Quality Score. Quality Score is calculated on a scale of 1-10 based on several factors like expected clickthrough rate, ad relevance, landing page experience, the expected impact of extensions and other ad formats. If you're using the cost-per-click bidding option, your bid is how much you're willing to pay for a single click on your ad. The quality components of AdRank are a measurement of the quality of the ad text and landing page in the context of what a user is searching for.

AdRank = Bid Price x Quality Score

Note that if the advertiser is using extensions such as sitelinks, the expected impact from those extensions is factored into the AdRank. This means that if two competing ads have the same bid and quality, the ad with the better expected impact from extensions will generally appear in a higher position than the other.

To improve the ad position, the advertiser can increase the bid, or he/she can focus on improving the quality of the ads.

How does Google decide how much you should pay for AdWords? There is again a logical calculation behind this. You actually need to pay $0.01 more than what the bidder who ranks next to you in AdRank has actually bid for.

Sounds confusing? Let us illustrate this with a simple example.

• Company A has made a CPC bid of $5 and their Quality Score is 7. Their AdRank scorewill be 35. 

• Company B has made a CPC bid of $10 and Quality Score is 5. Their AdRank score will be 50. 

• Company C has made a CPC bid of $2 and their Quality Score is 8. Their AdRank score will be 16. 

As per AdRank, we can write:

So, Company B will have to pay $5 + $0.01 = $5.01 to appear in Google SERP. And, Company A will pay $2 + $0.01 = $2.01 to appear in Google SERP.

Quality Score

Quality Score is an estimate of the quality of your ads, keywords, and landing pages. Quality Score is used to determine your cost-per-click (CPC) and multiplied by your maximum bid to determine your AdRank in the ad auction process. Higher quality ads can lead to lower prices and better ad positions. 

Quality Score depends on multiple factors, including:

• Your click-through rate (CTR).

• The relevance of each keyword to its ad group.

• Landing page quality and relevance.

• The relevance of your ad text.

• Your historical AdWords account performance.