How does Google Ads work?

How Does Google Ads Work in 2024?

Google Ads can seem complex, but understanding how it works is essential for making the right decisions with your campaigns. This guide will help you grasp the fundamentals of Google Ads, with a focus on the auction process, keyword targeting, and how you can achieve optimal results.

Why Google Ads Works

As a digital marketing agency, we know firsthand that Google Ads delivers results. Here’s why:

1. High Intent Traffic: Google Ads appear when users are actively searching for products or services, resulting in higher conversion rates. Approximately 65% of clicks for buying keywords go to Google Ads, compared to 35% for organic results.
2. Cost-Effectiveness: You control when and where your ads appear and set your budget limits, making it possible to achieve an ROI of up to 800%—$8 for every $1 spent.
3. Trust and Credibility: Google is the most trusted search engine, with 63% of users preferring Google ads over those from other platforms.
4. Measurable Outcomes: Google Ads provides detailed metrics, allowing you to adjust strategies based on real-time data.
5. Immediate Impact: Unlike SEO, which takes time to show results, Google Ads can drive traffic to your site immediately after launch.

How Google Ads Works: A Quick Overview

Understanding the basics of Google Ads involves several steps:

1. Ad Creation and Keyword Targeting: Advertisers create ads and target specific keywords.
2. User Searches on Google: A user enters a query related to the advertiser's keywords.
3. Auction Triggered: If the query matches targeted keywords, an auction is triggered.
4. Ad Selection: Google selects the most relevant ads based on Quality Score and Ad Rank.
5. Cost per Click: Advertisers pay only when their ad is clicked.

Step-by-Step Guide to the Google Ads Auction

1. Ad Creation and Keyword Targeting

Advertisers start by creating ads and selecting keywords relevant to their products or services. For example, a pet adoption agency might target keywords such as "pet adoption," "animal shelter," and "dog rescue." Advertisers also set a maximum bid—the highest amount they’re willing to pay for a click on their ad.

2. User Searches on Google

When a user performs a search on Google, this is known as a query. The query can exactly match or be related to the keywords the advertiser is targeting.

3. Keyword Matching

Google scans its advertiser pool to find relevant ads. If there are relevant keywords that match the user’s query, the auction process begins.

4. The Auction Process

In the auction, Google selects one keyword per account that matches the query. Each account’s ad then competes in the auction. Given the vast number of advertisers, a single auction can include thousands of ads, but only a few spots are available on the search results page.

5. Quality Score and Ad Rank

Google uses Quality Score and Ad Rank to determine which ads appear. Quality Score is based on three factors:

• Relevance: How relevant the ad is to the user's search intent.
• Expected Click-Through Rate (CTR): Likelihood of the ad being clicked, based on historical performance.
• Landing Page Experience: Relevance and quality of the landing page linked to the ad.

Ad Rank is calculated by multiplying the Quality Score by the maximum bid. Higher Ad Rank scores improve the chances of the ad appearing in top positions on the search results page.

6. Cost Per Click (CPC)

Advertisers only pay when their ad is clicked. The CPC is determined by the Ad Rank of the next highest bidder divided by the Quality Score of the winning ad, plus $0.01. This ensures that advertisers pay the minimum amount required to maintain their ad position.

The Benefits of Google Ads for Australian Businesses

For businesses in Australia, especially in Adelaide, Google Ads can be a powerful tool to reach local customers. Here’s why:

• Local Targeting: You can target ads to specific geographic areas, ensuring your ads reach potential customers in your service area.
• Flexible Budgeting: Start small and scale your budget as you see positive returns.
• Quick Market Entry: Launch your ads quickly and start seeing results immediately, perfect for competitive markets.

Common Questions About Google Ads

What is a keyword?

A keyword is a term that potential customers use when searching for products or services online. Advertisers bid on keywords that are relevant to their offerings.

How many keywords should I target per ad group?

It’s recommended to target no more than 20 keywords per ad group to maintain relevance and manageability. This helps in creating more focused ad copy and landing pages.

What is a good Quality Score?

A good Quality Score varies by keyword type. Aim for 8-10 for branded keywords, 7-9 for high-intent commercial keywords, and around 7 for lower-intent keywords. Competitor keywords typically have lower scores.

Conclusion

Google Ads can be a highly effective advertising platform, offering immediate and measurable results. However, the complexity of managing campaigns and optimizing for the best ROI makes it beneficial to work with experienced professionals. For tailored Google Ads solutions that drive success, especially in the competitive markets of Adelaide, contact Bobo Digital. Let our experts help you maximize your digital marketing efforts and achieve your business goals. Contact us today to get started!

‍