May 21

Google Ads Fundamentals: What Are Google Ads and How Do They Work?

With Google now processing over 63,000 searches per second, it’s more important than ever to ‘click’ with your customers – see what we did there? Jokes aside, what this means for small businesses is it’s essential that potential customers can find you on Google. Search engines are the main method customers use to look for products and services, with 62% of people saying they will not consider a business if they can’t find information about it online. Now let’s be realistic – to most of us, not finding something on page 1 is pretty much the same as not finding it at all!

This is where Google Ads can help small business owners.

What are Google Ads?

Google launched its advertising platform in October 2000 as Google Adwords and in 2018 it was rebranded as Google Ads. It is essential for any small business owner to have a basic understanding of Google Ads, because even if you’re not using them yet, your competitors are! Just Google them and see for yourself.

To cut a long story short, Google Ads are paid ads that appear above the organic search results on page 1 of Google. They are essentially a quick fix to help you jump to the top of the queue and be found immediately. Sounds great, right?!

Of course, nothing in life comes that easy. Because Google Ads have become so important, the competition has accelerated. However, once you’re familiar with the fundamentals of how Google Ads functions, you’ll be well on your way to creating successful campaigns that get your business leads!

How do Google Ads work?

Keyword Bidding

Because Google Ads can be so effective, there are obviously multiple companies competing for the attention of the same eyes. That is why Google Ads works on a system where companies bid how much money they are willing to spend on a keyword. So, the more money you’re willing to cough up, the higher your ad will pop up? Once again, not so simple.

AdRank and Quality Score

See, there is also this thing called AdRank. AdRank is a Google metric that determines where your ad will place. Your AdRank will essentially be your bid multiplied by your Quality Score. Because Google itself is a product, they want to offer only the most useful information to their customers. Your Quality Score is Google’s estimation of how useful and relevant your ad is to the user.

Quality Scores are determined based on three factors:

  1. Ad Click-Through Rate (CTR)
  2. Ad Relevance
  3. Landing Page

The good news is, you can get spot number one with a low bid if you have a great Quality Score, which means more results for less money! Therefore, it is essential to have a top-notch landing page and informative ad copy that sells.

What You Pay for When You Buy Google Ads

When setting up a Google Ads campaign, you either pay per click (PPC) or per impression (CPM). In practice, each time someone clicks on your ad you pay a fee to Google. This amount can vary from a few cents to a few dollars depending on the competition for each keyword. A budget can be set so your ad spending doesn’t get out of control if the ad turns out to be popular.

How to Target the Right People

Now the upside to this is, where there’s no click there’s no cost. You only pay for the real attention your ad gets. This offers businesses some certainty and makes Google Ads a lucrative marketing option. To make the most out of your ad, it needs to achieve two things:

  1. Attract searchers who are potential customers to click
  2. Repel searchers who are not potential customers from clicking

The first can be achieved by targeting. Google ads can be targeted in multiple useful ways, including by

  • Location
  • Audience
  • Time of the day
  • Day of the week⠀⠀⠀⠀

The latter is done by including negative keywords. A good negative keyword list is just as important as a good keyword list. Adding negative keywords means your ad won’t show to searchers who typed in that negative keyword.

For example, a clothing store in Brisbane might use the keywords “clothing store Brisbane”. If they want to only target clients who buy high-end brands, they might want to add negative keywords such as “discount” and “cheap”, as searchers looking for those keywords probably aren’t interested in high-end brands.

Why You Should Use Google Ads

Getting traffic from organic results is hard and takes time. SEO is a marathon and a great long-term investment, but in the meantime, Google Ads can get you to the top of the page and in front of your competitors instantly. It’s like cutting the queue at a theme park!

On top of that, Google Ads offers incredibly detailed real-time data on ad performance around the clock. Traditional, offline advertising campaigns require significant investment that can be a bit of a gamble, as their effect can’t be determined before the investment is already made.

Unlike offline advertising, Google Ads lets you see how many views your ad gets and how many people click through. Google Ads also allows you to continually tweak a live campaign to optimise your results and spend your money smarter. With a little piece of extra code, it can even tell you how many completed actions such as bookings, purchases and inquiries came directly from your ad!

The Pitfalls of Google Ads

Now remember, when you pay Google for Ads, you are paying for the clicks you get, which might or might not translate to sales. Many people are online just to browse their endless options without the slightest intention to buy anything. Unfortunately, some companies end up spending more money on keyword bidding than they will make back in sales. This is why it is essential to optimise your landing page and your ads to YOUR customers’ needs.

Luckily, small businesses with local customers have an advantage here, as ads can be targeted very specifically. Businesses with wider, global client bases aren’t quite so lucky, as the competition for ranking and the price of keywords have reached an all-time high. In some industries, it has become extremely hard for start-ups to compete with larger, more established companies.

Another stumbling block to watch out for is the low character limit for the text in your ad. A Google Ad needs to be short, sweet and effective, a bit like a funny tweet! Without some research and experience under your belt, it can be difficult to write efficient copy that encourages people to click through. The little bit of text on your ad can really make or break a campaign as searchers decide which link to click on, often in a matter of seconds.  Speak to your customers and ask what they like about your business, then use that information to set your ad apart.

So What Does This All Mean?

It is a fact that your customers are searching for products and services online, so being found on Google can be a question of life and death for small businesses. While a long-term SEO strategy for organic visibility is great, sometimes as a business we just can’t afford to wait around long enough! That’s why Google Ads can be enormously beneficial to small businesses, but they can be tricky to execute successfully if you’re not spending all day working out the kinks of digital marketing like us professionals. However, when set up and managed well, Google Ads can help you tick some short-term business goals off your list fast. Whether it is through increased calls, website visits or foot traffic, it pays off to be on page 1 of Google. It has been proven that 72% of consumers visited a store within 5 miles after searching for local businesses on Google.

Are you a small business owner that needs more traffic? At Gordon Digital, we offer a Google Ads Management service where our certified experts help you get the most out of the money you put in, starting from $79/week. We continually optimise and adjust your campaign for best results, communicating the process to you transparently the whole way.

Book a FREE Google Ads audit with us and see what we can do for you!

about the author

Jessica Gordon