How Does Google Ads Actually Work

If we are interested in finding out how does Google Ads actually work, first of all, we need to understand how does Google search work. We are talking about the simple process of demand and supply. The users are searching for products, services, answers to questions or solutions to their problems. Google search provides them with a list of results that are convenient to the searched keywords. If your company can provide wanted products or services, if you can provide answers or solutions, it is very important that your ads can be found at the right time, in the right places.

When you type the keywords in Google search, you will be presented with the list of the organic results. The content you find on the very top of the organic search has to be very well written, informative and has to provide concrete answers to the questions asked. Google is searching for the best solutions for the problem described by keywords and ranks content by this criterion. The presented ranking is not paid for. In order to find your business in the top results for important keywords, you don’t have to invest in Google Ads, but you have to put all your efforts into a quality SEO strategy. The second option for finding your way into the top placed results is to invest your resources in Google Ads (formerly known as Google AdWords).

When creating Google Ads, you can choose keywords your company will show up in search as a top result. Keywords are a group of words a person may type in the Google search to describe their problem, need or wish. For example, if you are advertising your pastry shop, you can choose keywords like “wedding cake”, “chocolate cookies”, “organic ice cream”...

This kind of advertisement is not free. For example, you can define the budget of 1 dollar for every click on your ad. So, you do not pay anything if somebody just saw your ad and didn’t click on it. The situation is not that simple, because we are dealing with a sort of auction. Videlicet, another pastry shop can also create Google Ads and is ready to single out a budget of 1,10 dollars per click. The one that offers a higher amount is automatically placed higher in the search results. If the industry you are working in is expanding and you have a lot of competition - the amounts showing in the auction will go higher.

Is your Google Ads campaign going to be cost-effective depends on the conversion you are able to achieve. You already know you are paying Google 1 dollar per click. If every tenth person that clicks on your ad also makes a purchase and each sell makes you approximately 20 dollars, the calculation is simple: 20 dollars total income - 10 dollars Google Ads = 10 dollars clear profit. Everything is clear and you are profiting!

You can target by keywords, but Google Ads also offers targeting by location, time zones (when you want your ad to show up) and devices (computer or mobile phone). When you use more than one criterion to target your audience, you will use an analytic approach, which will give you precise results. We strongly advise you to use long-tail keywords. In our example of the pastry shop, it is not recommended to use short keywords like “cake”. Instead, use keywords like: “wedding cakes for sale”, “cakes for sale novi sad”, “cakes for children birthdays”... Word “cake” will type in someone who is looking for a tasty recipe and that person most likely will not make a purchase if he or she clicks on your ad, but you will pay 1 dollar/per click regardless.

A very important step of any Google Ads campaign is the so-called split testing (also known as A/B testing and Bucket testing). When creating text for Google Ads, simultaneously create another version of the same ad, with a slightly modified text. The two versions of an ad are published at the same time, so we can perform a direct comparison of the variations. The goal is to find the version that will attract potential customers and will provide you with the highest conversion. For that matter, we use a parameter called Click Through Rate. For example, if 100 people see your ad, you want to know how many of them will actually click on it. The higher Click Through Rate parameter is, the lower will Google charge you per click.

We can observe the whole process as an upside-down pyramid. On the highest level are all the users that google keywords and can see your ads. Then, they are users that will see your ad and click on it. In the third group are people that will actually make a purchase. The goal is to make all three groups as big as they can be, because the bigger the groups are, the grater is the possibility of making the profit.

When talking about online advertising, most people automatically think about social networks. Google Ads gives you an advantage - ads are not strictly directed to the users of one platform. Ads are directed to every person who, in search of an answer, types keywords in Google engine (an average person uses Google search 3-4 times daily).

To achieve great results with Google Ads, you need to think about numerous factors, have in mind the goal of the campaign, market demands, and customer needs. Google Ads campaigns can be the right move for your business strategy and can put your company in front of the competition.