How Exactly Does Google AdWords Work?

Written on 29 November, 2016 by Trish OLoughlin
Categories PPC

Digital marketing is a multifaceted industry made up of many different services. However, if you break it down, it is essentially supported by two major pillars: SEO and PPC.

SEO – or search engine optimisation – is focused on gaining organic ranks on Google, whereas PPC – pay-per-click advertising – is literally that: paying for your business listing to come up on page one.

What does Google AdWords look like?

Google AdWords falls into the second category. It is the search engine’s own advertising service, designed to enable businesses to appear at the top of a search engine results page (SERP). You can tell the difference between these listings and SEO pages because they will display a small green ‘ad’ label.

What do SEO and AdWords have in common?

In short form: keywords. Both SEO and AdWords are powered by the most popular keywords a user might plug in to Google to find your business. However, where SEO is grounded in organic search results, AdWords revolves around bidding against rival companies for competitive keywords. Every time a user clicks on your ad, you pay an allocated charge.

How does Google decide how to rank AdWords?

Ensuring your ad secures that prime SERP real estate requires much more work than simply placing the highest bid – or cost-per-click (CPC) – on keywords. Google is a clever cookie, and it wants to make sure its users are clicking on ads that will provide the most value to them – in other words, what is referred to as ‘quality score’.

As such, it has come up with a primary method for calculating just how to position AdWords pages on its SERPs:

Page rank = quality score x maximum bid

Essentially, this method ensures fairness while rewarding ads that provide the most value to users.

Okay, but what exactly is quality score?

To break it down further, it’s important to wrap your head around the idea of ‘quality score’ in the world of Google AdWords. This term is used to reflect how useful your ad is to the user based on the landing page experience, the relevance of your ad, and your ad’s click-through rate.

Image source: Sherman Marketing

To provide an example, let’s say you have created an AdWords campaign focusing on the keywords: “Apple Watch Series 2”. A user searches for these terms, your ad appears, and so they click on it. However, instead of being directed to a page featuring the Apple Watch Series 2, the user is taken to your generic homepage. This will inevitably give you a low quality score.

There are a few ways to check the quality score of your AdWords campaign, all of which Google outlines here.

Quality score affects your cost-per-click (CPC)

Because Google places a big priority on its users, your quality score can play a major part on how much money you splurge on an AdWords campaign. Google will penalise a low quality score by increasing your CPC, while a high quality score is sufficiently rewarded with a reduced CPC.

Image source: Word Stream

So, to recap…

Google AdWords is a bit of a complex creature, revolving around an intricate web of calculations. However, you can ensure you construct an effective, profit-building AdWords campaign by simply acknowledging and employing the basic principles listed above.

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