What is Google Adwords and how does it work? A beginner’s guide

Letter blocks spelling Google Adwords

Before online marketing or Google Adwords existed, sellers did not know whether it was their radio spot, newspaper ad, or television ad that brought in customers. Today, with Google Adwords, online sellers can know everything about their campaigns and a lot about their sites’ visitors and customers. You’re wondering – what exactly is Google Adwords?

What is Google AdWords

Google Adwords is Google’s very own online advertising program. It allows you to create online ads and reach your target audiences through the Google search network and the Google display network.

Unlike mass advertising, Google AdWords lets you advertise only to your target market. It uses lightboxes, videos, animated banners, static banners, and text display ads to execute search ads, display ads, remarketing, YouTube, and Gmail campaigns. Google Adwords also enables you to track your campaign performance.

Common questions about Google AdWords

What does Google AdWords include?

Google AdWords includes two advertising networks – the Google search network and the Google display network.

With the Google search network, you can publish your advertisements on the Google search engine results page. With the Google display network, you can publish your advertisement on any of Google partner websites.

Why do companies use Google Adwords?

Companies use Google Adwords because it is highly effective. It can work for any type of business and it delivers measurable ROI.

What is pay-per-click (PPC) advertising?

Pay-per-click or PPC advertising is an online advertising model in which advertisers pay each time a user clicks on their online ad(s). The Google search ad or the paid search ad is the most common type of pay-per-click advertisement.

Is Google Adwords a pay-per-click (PPC) advertising platform?

Yes, Google Adwords is a pay-per-click (PPC) advertising platform.

Is Google Adwords free?

No, Google Ads is not free. To run an ad campaign on Google, you are required to pay. However, you can sign up for free and access the Google Adwords interface, and test its functionality.

What’s the difference between Google AdWords and SEO?

Search engine optimization (SEO) is the use of carefully selected keywords on a site’s pages that gradually and organically attract visitors. Conversely, Google AdWords proactively pulls in traffic by sending targeted advertising to people who are the most interested in visiting your website.

Isn’t AdWords a waste of money?

No, Google AdWords is not a waste of money. To make the most of AdWords, make sure you follow these best practices:

Be prepared for traffic – Your website should present a desirable product at a reasonable price with reasonable shipping costs and delivery time. It should also have multiple payment options and appear trustworthy.

Target the right people – Your campaign should target people who are ready to buy.

Know how to use the platform – An AdWords account manager can bump the conversion rate up to 10% or higher and sort out the conversion tracking.

Why might a campaign need to be agency-managed?

The effectiveness of a campaign changes over time and your campaign needs to be tweaked, finetuned, and managed by a professional to get the most conversions.

Why might I want an agency to manage my AdWords account?

Advertising effectiveness is in constant flux. A person’s experience with AdWords can make the difference between a 1% or 10% conversion rate or reduce the cost per click by 50%. A well-trained expert always has a better chance to run a successful AdWords campaign.

How would I charge for Google AdWords management?

Agencies charge by a fixed fee per month, fixed fee plus percentage of ad spend, by the number of ad groups and campaigns, or by the percentage of ad spend.

I can’t see my AdWords ads. Is my agency ripping me off?

There are many reasons why you might not see your ads. To find out why your ads are not visible, you must analyze the conversion results to understand if your agency is doing its job.

Benefits of Google AdWords

AdWords works faster than SEO does

AdWords and SEO are both search engine marketing strategies. However, AdWords works faster because unlike SEO, it focuses on multiple keywords, it lets you pause the campaign at your will, and it calls attention to your site.

AdWords boosts brand awareness

AdWords campaigns create top-of-mind awareness in 6.6% of viewers. This figure comes from a study that was run across 12 verticals.

AdWords lets you reach more customers through their Gmail inbox

Google AdWords can now be used in Gmail. Gmail ads appear on either the promotion tab or the social tab and on mobile devices and desktop computers. Gmail ads cost a lot less money than search ads do.

AdWords remarkets your brand to website visitors

You’ll have people who click around on your website but don’t buy anything. AdWords can take note of those people and target them with ads that remind them of the items they looked at.

AdWords enables you to learn about your visitors

AdWords gathers information about visitors it sent to your site when they clicked on the advertisement. This includes information about new visitors, returning visitors, pages visited, bounce rate, and time spent on each page.

AdWords enables you to see the competition’s advertisements

Google AdWords is transparent, which allows you to view the competition’s advertising and then tailor your ads to stand out.

AdWords lets you know every detail about how your campaign worked

AdWords gathers information about your campaigns and provides you information such as:

1. The cost per lead
2. Keywords that generated the most traffic and leads
3. How much traffic AdWords ads sent to your website
4. The number of leads generated
5. Who clicked on the AdWords ad

Google Ads terms you should know


A keyword is a word or phrase that is used to perform an online search on a search engine. For example, a user looking for hiking boots for a snowy terrain will simply use type the keyword ‘snow hiking boots’ or ‘hiking boots snow’.


Ad Extensions are the additional pieces of information that help you supplement and improve your ads. For example, the ‘Sitelinks’ extension adds links to an ad, which allows the audience to directly go to a specific page in a website. Google Ad extensions are free of cost and fall under one of five categories: Sitelink, Call, Location, Offer, or App.

Click-Through Rate (CTR)

Clickthrough rate, also abbreviated as CTR, is the number of clicks on an ad as a proportion of the number of views of the ad. A high CTR indicates a quality ad that matches search intent and targets relevant keywords.

Conversion Rate (CVR)

Conversion Rate or CVR is a measure of the number of form submissions as a proportion of total visits to your landing page. A high conversion rate implies that your landing page presents a seamless user experience that matches the promise of the ad.


Bidding is the process of quoting the maximum amount you are willing to pay for an ad click. The higher the bid, the better the ad placement. There are three options for bidding: CPC, CPM, or CPE.


Cost-per-click or CPC is the amount of money paid by an advertiser for each click on his ad. CPM or cost per mille, is the amount of money that must be paid for one thousand ad impressions i.e., when your ad is displayed to a thousand people. CPE, or cost per engagement, is the amount you must pay when someone takes an action on your ad.


AdRank is the position or the placement of an ad on a search engine results page (SERP). Higher ad ranking typically results in greater visibility for your products or services as a result of experiencing higher click-through-rate on your ads. AdRank is determined by multiplying your maximum with your Quality Score.

Campaign Type

Campaign type refers to the category or the type of campaign for your ad. Before they begin their paid campaign, advertisers can choose between three three campaign types: display, search, or video.

Search ads are the text ads that are displayed with the search results on a search engine results page (SERP). Display ads are image-based ads that are displayed on web pages within the Google Display Network. Video ads appear on Youtube and are between six and 15 seconds long.

Display Network

Google Display Network (GDN) is a network of websites that allows advertisers to place their ads. These ads, which can be image ads or text-based ads, are displayed alongside content relevant to your target keywords. As per Google, its display network reaches users across 2 million sites.

Pay-per-click (PPC)

Pay-per-click or PPC is an online advertising model where advertisers pay for every click on their ad. It must be noted that pay-per-click is not limited to Google Ads alone ─ it is the most common type of paid online advertising campaign.

Quality Score

Quality Score (QS) is a measurement of the quality of an ad. The quality score is determined on the basis of your click-through rate (CTR), keyword relevance, landing page quality, and past performance on the Search Engine Results Page (SERP). Quality Score is a key determining factor for AdRank.

Negative keywords

A negative keyword is a keyword term that an advertiser does not want to rank for. For example, if you want to rank for the keyword ‘running shoes’ but do not want to rank for the keyword ‘running shoes for women’, the negative keyword will be ‘running shoes for women’. Negative keywords help advertisers create highly targeted campaigns by choosing what not to target.

How to build your Google AdWords strategy

It can be hard to make money using Google AdWords. But if you concentrate on who your target market is and how you’ll reach them, you’ll have a better chance to make money using AdWords.

Segment your customers based on their intent: There is a three-step process, a marketing funnel that customers go through before they buy a product. Analytics mastermind Avinash Kaushik named this process See, Think, Do. The See-Think-Do steps are as follows:

1. See: Unaware people see a problem and the seller’s solution.

2. Think: Aware people know about the problem, and they want details to compare solutions.

3. Do: People who are ready to buy go online to make a purchasing decision.

Identify your target segment: You’ll likely want to target the people in the Do stage because they’re the readiest to buy. To do this, you target the people who show the highest purchase intent through their online activity (querying for specific products or browsing products on your site).

You simply reinforce to them why they should buy from you and send them to your category or product pages. Of course, your product, price, shipping costs, delivery time, payment options, and your website’s trustworthiness all need to please customers before they’ll buy from you online.

Target your audience: There are three main campaign types for the Do stage. They are:

1. Search campaigns – branded, competitor, product brand search, and remarketing lists for search ads and remarketing lists for search ads (RLSA) campaigns

2. Shopping campaigns – branded shopping and product brand shopping campaigns

3. Display campaigns – a static banner or the products the visitor had previously looked at

If you want to target people who are in the Think stage, you want to just engage them with your brand so that it will be in their minds whenever they are ready to buy later. You’ll add YouTube advertisements to variations of the aforementioned campaigns. If you’re targeting people in the See stage, you just want to increase brand awareness through displays and videos.

Examples of Google AdWords

So, how does Google ads work? Keywords should bring up relevant ads, but sometimes they don’t. Querying ‘snow hiking’ for example, brings advertisements for hiking boots, fleece jackets, hiking poles, sleeping bags, and other hiking gear.

In this instance, typing ‘Digital marketing’ brings advertisements for digital marketing platforms and digital marketing courses.

Types of Google Ads

Marketers can use Google Ads in multiple format types to advertise their products to customers. Google Ads can be divided into two categories – Google Search Network and Google Display Network. All of the ad format types will fall under one or both of these categories.

Google Search Ads

The Google Search Network is the most popular way of advertising on the Google platform. Google Search Ads are the first type of ads that come to mind when you think about Google advertising.

Every time you complete a search on Google, a part of the results displayed are sponsored ads. These sponsored ads are Google search ads. Google search ads have a very high reach and are the equivalent of publishing your business in the Yellow pages. There are five types of Google Search Ads:

1. Text ads
2. Dynamic search ads
3. Product ads
4. Showcase ads
5. Call-only ads

Google Display Ads

The Google display network allows advertisers to display their ads to a wide audience across thousands of sites on the Google display network. Display ads appear on other Google sites (E.g., YouTube and Gmail) and other websites all over the internet that have joined the Google AdSense program.

The banner ads that you see in the margin while you’re browsing a website, are Google display ads.

Advertising on Google partner websites is done through Google AdSense. This enables marketers to place ads on thousands of popular sites. There are five types of Google Search Ads:

1. Text ads
2. Rich media ads
3. Image Ads
4. Video ads
5. Responsive Ads

FAQs about Google AdWords

What is cost-per-click (CPC)?

Cost-per-click or CPC is the amount of money an advertiser is required to pay once someone clicks on their ads.

How to advertise with Google Ads?

To advertise on Google, you must first open a Google Adwords account. You can learn more about how to use Google AdWords here.

Will low-volume keywords hurt my Google AdWords quality score?

No, because quality scores are not based on the total number of clicks. They’re based on the ratio of clicks to impressions, and they represent the account’s health.

How do CPC bids affect the quality score?

CPC stands for the cost per click, and a quality score is the account’s health. You can calculate the CPC using this formula:

CPC (your price) = The next-down advertiser’s ad rank / your quality score + one cent

What are the negative keywords in Google AdWords?

Negative keywords are keywords that let the platform know where you definitely do not want your ads to appear. This ensures that you only receive relevant and purposeful traffic on your website and that you don’t waste money on unwanted clicks.

What is a modified broad match, and how does it work?

There are actually three types of matches, which are broad match, phrase match, and exact match.

When broad matching is used by the platform, the advertisement will appear to people who type in synonyms of keywords and not just to people who query using the specific keywords. So people who type in “shoes for running,” “running tips,” “running sneakers,” or “best running shoes” would see an ad meant for people who type in “running + shoes.”

Sometimes broad matching will totally miss the meaning of the original keyword and send irrelevant traffic, which wastes advertising budgets and angers marketers. Marketers need to study tips regarding broad matching and know what is PPC before using broad matching.

How do landing page load times affect the quality score?

Viewers leave at higher rates when a page does not load quickly or when the landing page is irrelevant. These two factors give users a bad experience. They also tell the Google platform that the page was poorly constructed, and Google then gives it a negative ad rank.

A solution might be to turn the landing page into an accelerated mobile page (AMP), which will speed up the loading time. If a page is both highly relevant and quick loading, Google gives it a high-quality score, which increases the ad rank in time.


Marketing has come a long way during the past two decades. This period marks the years when the internet became widespread, and Google created the AdWords advertising platform.

AdWords harnesses the power of computers to gather information about website visitors and uses it to market highly relevant goods and services to the people most interested in them. It also collects and analyzes useful campaign-related data that sellers or their agency can use to optimize campaigns. Now you know the answers to what is Google ads, how does Google ads work, and what is PPC.


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