Understand the Google Ads Logic
Google Ads (formerly Google AdWords) is the largest online advertising platform worldwide. As the most popular search engine, Google offers this competitive tool to advertisers for:
- Building brand awareness
- Increasing website traffic
- Reaching qualified leads
- Driving online or in-store sales
There are different Google Ads formats available for businesses. We will introduce them in detail below. They all rely on searched keywords.
When online users type queries in the search engine field, Google may return paid ads at the top of organic results. Google charges a certain fee to the advertiser when people click on those ads. We call this a Pay Per Click (PPC) model.
This article will clarify how Google Ads works & what are the best practices to run efficient paid campaigns.
Cost Per Click (CPC)
On Google ads, businesses bid on keywords so they can broadcast their messages. The platform classifies the ads competing on the same search terms depending on several factors, including the Cost Per Click (CPC).
To illustrate this, say 5 companies want their website to appear on the search results page when users type the keyword “google ad agency.” Each competitor previously defined a CPC for this specific keyword, which is the bidding price they are willing to pay every time a user clicks on their ads.
Based on this bid, the Google algorithm calculates the rank for each ad & returns the results accordingly. The purpose is to pay the smallest Cost Per Click while ranking as high as possible.
Businesses setting their campaigns the wrong way can lose money quickly. Read our pieces of advice below to run cost-effective Google ads.
Quality Score (QS)
Besides the Cost Per Click, the ad ranking also depends on the Quality Score (QS). To simplify, we will start with the following formula: Ad Rank = Cost Per Click x Quality Score
The Quality Score follows a 1 to 10 scale (10 being the maximum). It estimates the ad quality based on the relevancy between the keywords & the ad content.
Other factors that influence the Quality Score are compliance with Google Ads policies or the landing page‘s user experience. For example, the Quality Score will be low if a billboard advertisement business bids on the keyphrase “google ad agency”, because this keyword is irrelevant to the company’s industry.
Google Ads Ranking
To explain the rankings on Google Ads, let’s update the previous formula as follows:
Actual Cost Per Click = (Ad Rank to beat / Quality Score) + $0.01
The addition of “+ $0.01” means that advertisers do not exactly pay for their bidding amount. They pay the least possible to beat the competitor below.
This system works like auctions except that brands do not know how much others are bidding. Consequently, it may appear that bidding high would be the best strategy to secure the top ad placements. At the end of this article, we will demonstrate it is not the case.
This formula also says that the higher the Quality Score, the lower companies will pay. If the QS equals 10, then the business controls the auction because Google anticipates that this ad will provide the best experience to users.
In other terms, the company with the highest quality score pays the least & forces its competitors to pay the most. It means that even small companies with a limited budget can make their Google Ads visible thanks to high relevancy & good QS.
Google likes 8-10 Quality Scores because they guarantee suitable content for online users. If people are happy with what they find on Google, they will continue to use this search engine. Google looks for user satisfaction. A good business strategy is to maximize the Quality Score.
To sum up, the key success factors for Google ad ranking are:
- Pick relevant keywords matching the business products & services
- Carefully choose the right bidding that will optimize the budget
- Craft top-quality ads (content & visuals) for a smooth online experience
Discover the Google Ads Tool
To get started on Google Ads, businesses need the following:
- A computer with an internet connection
- A valid Gmail address
- A live website
- A credit card for payments
The first step is to create a Google Ads account. The platform makes it easy. After giving an email address & a website URL, the brand receives a customer ID.
From this point, Google immediately invites you to set up the first campaign. People can define their budget, target audience, and ad text, or just skip this part to directly access the Google Ads account dashboard.
Create a Google Ads Campaign
When setting up a Google Ads campaign, the tool asks to choose a goal from a list including:
- Online sales
- Lead generation
- Website traffic
- Product & brand consideration
- Brand awareness & reach
- Mobile app promotion
We can skip this part & select the last option, which is to create a campaign without a goal’s guidance. We recommend choosing this one as it eliminates the risks of incorrect settings.
In 2021, Google Ads offers these 5 main campaign types:
- Universal app
The search option shows text ads to online users performing a Google request. They appear above the organic search results. The platform charges the companies every time someone clicks on ads (as a Pay Per Click model). To be successful, brands must anticipate what keywords or keyphrases people are more likely to search. The conversion rate of this kind of ad is typically good because the user intent is high.
Google display showcases visual ads (mostly banners) to online users surfing the web. They appear on the Google Display Network (GDN) which includes over 2,000,000 websites worldwide. Unlike on search, advertisers target people by interest, not by keywords. This option works best for businesses needing brand or product awareness. The traffic & exposure are high, but the conversion rate is typically low.
On Google Shopping, online users view physical product information from a classic search. On the Google Search Engine Result Page (SERP), shoppers get detailed descriptions even before clicking on the ads. This campaign type is the best option for retailers willing to promote their inventory, get traffic to their e-commerce website, or have visits to their brick-and-mortar stores. The conversion rate is excellent because online users have a high purchase intent.
Advertisers can broadcast their promotional videos on YouTube (owned by Google) & other video partner sites. This campaign type reaches a massive number of people because videos are a popular form of online content. Video ads work well for brand awareness or campaigns promoting products & services. However, as most people skip them, the conversion rate is low.
Google offers services to promote mobile applications through the universal app section. It covers Google Play, Google search, Google Display Network, and YouTube. This option allows advertisers to get app installs or engagements. The Cost Per Download is low but the huge number of competitors in the market negatively impacts the Click-Through Rate (CTR) and Conversion Rate (CR).
Google Ads Campaign Settings
After choosing the campaign type, advertisers must name it. This is an important step, especially when running multiple ads. The naming convention should be descriptive to avoid any confusion later.
In the campaign settings, businesses must also pay attention to the following sections:
- Audience interests
- Ad extensions
Locations, languages, and audience interests target the users, so Google can deliver the ads to the right people. The budget & bidding determine the reach & ad ranking as well.
The ad extensions allow text ads to look more relevant to online users. Depending on the business industry & campaign objectives, advertisers activate them from a range of different options. To promote a local brand, we recommend considering these ad extensions as priority:
- Sitelink extensions
- Call extensions
- Review extensions
- Callout extensions
- Location extensions
Ad extensions are a great way to differentiate from the competition in Google ads search. As they do not increase the campaign costs, we should never ignore them.
Note that, starting the 30th of June 2022, Google will automatically create & edit the expanded text ads instead of advertisers. The purpose is to serve better the online users & deliver useful ads.
Ad Groups Settings
Campaigns are the first level of the ad account layers. They are subdivided into ad groups. At this level, advertisers define keyword clusters that are relevant to promote their business to customers.
Consistency & quality are keys to optimizing paid campaigns. With an effective ad group structure, businesses can optimize their estimated conversions at a lower cost. It plays a major role in the Quality Score calculated by Google.
Each ad group contains one or more ads & a set of related keywords. To maximize performance, 1 ad group should focus on only 1 product or service. Keywords help Google evaluate the ad group relevancy for ranking & costs among the search networks.
Google proposes a system that restricts how the ads match with the keywords. Advertisers can use the following match types to “narrow” their keyphrases’ variations:
- Broad match
- Broad match modifier
- Phrase match
- Exact match
- Negative keyword
The broad match is the default type that reaches the widest audience. Ads may appear when online users’ search queries include any word or close variations of this keyword. When choosing this option, advertisers must make sure they will not pay for irrelevant traffic to their website.
We use the broad match modifier by adding a plus sign before the word (example: +keyword). It tells Google the search query must include this term or close variations. Additional words may appear before, after, or in between the terms of the search results.
The phrase match works with quotation marks (example: “keyword”). It increases the level of control. Google will return the ad if the search query matches the keyword or closes variations in the same order as we enter them. Additional words may appear before or after the terms, but not in the middle.
The exact match is the most restrictive option & uses square brackets (example: [keyword]). In this case, the ad is eligible to show up only if the online user queried the same terms, same words, and same order. It may comprise close variations with the same meaning.
We define negative keywords by adding a minus sign before the word (example: -keyword). It prevents ads from showing on searches having this term. Advertisers must always consider them when running campaigns. Negative keywords make ads more relevant & optimize the media budget.
Google Ads Text & Creatives
The last campaign layer on Google is the ad that will show up to answer online users’ queries. The tool asks advertisers to input the following information:
- Landing page URL
- Ad description
Brands can input several headlines & descriptions to share their messages with online users. The fields have a length limit, so it is good to plan the content.
Each ad group should have the same clusters of keywords. We recommend creating several ad variations & A/B testing them to compare their performance.
Based on their CTR & costs, advertisers should adjust their campaigns accordingly. The goal is to pay the least for the maximum impact. Businesses should never go with 1 ad text in 1 ad group. Even small word tweaks can make a huge difference.
Now that we explained the basics of Google Ads, we will share a few pro tips for growing businesses & finding more online customers.
Google Ads Professional Advice
Once advertisers understand the foundations of Google Ads, they need to develop their expertise by running campaigns. Instead of wasting time & money on trial & error, check out these tips below. They are worth years of practice.
Before Running Google Ads Campaign
The most important rule to follow before launching any digital strategy is to define a clear campaign objective. In 2021, we noticed that most businesses still lack vision on this obvious part.
Every digital campaign must have a purpose. Generic targets like “growing revenue” or “getting more customers” will most likely fail.
The business objectives must be specific. Before running campaigns, advertisers should answer the following questions:
- What worked & did not work in previous digital campaigns (if any)?
- What are our current pain points?
- What do we need to achieve?
- What metrics should we follow?
- How many leads or customers do we need to have monthly?
- What is the average revenue per customer?
- What does success look like? (in 1 month, 6 months, 1 year)
- How much advertising budget are we ready to spend to reach those targets?
To be successful, advertisers must also get insights into their competitors, their client personas, and market trends. All those questions help brands define the best digital strategy & choose the right channels.
Tools to Get Started with Google Ads
Digital tools support marketers in getting the job done. When it comes to paid campaigns on Google Ads, advertisers need to perform a few tasks beforehand. Here is a quick checklist:
- Define the audience profile
- Benchmark the competition
- List keywords opportunities
All tools listed above are good for keyword research. Businesses can go deeper with free resources like Google Keyword Planner, Google Trends, Answerthepublic, Keywordtool.io, Lsigraph, or Wordtracker.
It is better to use at least 2 different tools when selecting search terms for running Google ads. All keyword databases have a separate source & the search volume estimation may not be the same. The combination of several insights should provide a decent analysis of which keyphrases the target audience is looking for.
Companies must never forget to strictly comply with Google Ads policies. Every marketer should read all rules at least once & then follow up on the updates. No one wants to see ad accounts blocked by Google. It is extremely difficult, sometimes impossible, to unsuspend an account.
Optimizing Google Ads
To build a cost-effective Google Ads campaign structure, brands should follow these hints:
- Segment audiences in small groups & analyze them
- Craft tailored ads suitable to each audience group
- Test ads by changing only 1 factor at once
- Build a remarketing list & target it
- Add negative keywords to control irrelevant traffic
- Start bidding low on keywords & increase progressively based on results
- Review keywords performance at least once a week
Being lazy results in immediate punishment when running Google ads. Many marketers throw money out of the window because they do not monitor their campaigns after launching them. To be successful, advertisers must continuously optimize their ad groups & keep an eye on the competitors.
On the other hand, brands should give some time to their ads for performing. All new campaigns must go through a learning phase. The tool algorithm needs to collect data before providing relevant results. The learning phase can last between 3 days to 2 weeks depending on the industry.
Find the right balance to evaluate your Google ads performance. Optimize or stop low-performing advertisements. Invest more in the ones doing well to reach your business objectives.
Google Ads Text Good Practice
Google Ads texts are essential components of successful digital paid campaigns. Experienced writers make the difference between poor & cost-effective copies. Here is a list of good practices to write optimized Google ads:
- Use all the space available
- Be relevant between the ad text & the landing page
- Be specific (“30% discount” beats “great discount”)
- Have a strong & engaging text for the Call To Action (CTA)
- Think about the sales funnel (identify in which buying stage the users are)
- Check how the competitors write their ads & differentiate from them
Businesses should always A/B test their ad texts to keep running the ones that convert the best. Sometimes, small edits result in a huge performance boost & better cost control.
Craft Irresistible Landing Pages
Online users clicking on Google ads will land on various conversion pages, usually hosted on the company site domain. Those landing pages are crucial for the campaign’s success because potential customers will make their decision there. Follow these guidelines to create the best landing pages for Google ads:
- Give a first strong impression
- Have a clear & visible Call To Action (CTA)
- Build the landing page around the CTA button
- Put the important stuff at the top of the page
- Optimize the page loading speed
- Be mobile-friendly
- Do not use the home page as the landing page
Besides, a few tricks make websites more “Google-compliant”. By following them, advertisers maximize their chances for better conversions & Return On Investment (ROI). Make sure to use landing pages including the following information:
- Physical address
- Phone number
- Email address
For e-commerce websites, landing pages must also have:
- All the above
- Shipping policy
- Return policy
Those rules are essential. Businesses must implement them as a priority on their landing pages when running Google ads.
Google Ads Practice
Follow this guide to run efficient Google Ads campaigns. Tag this article & refer to it every time needed. We reviewed how the platform works, and how to set up a Google Ads campaign structure, and shared a few actionable pro tips to optimize.
The best way to improve Google Ads skills is to keep practicing. There is no bulletproof or ideal formula to be successful on this platform. The best marketers are the ones monitoring closely their campaigns & testing their ads.
If you need our team of Google Ads experts to support you, feel free to contact us. Prodima Vietnam is happy to share over 15 years of practice on the Google AdWords platform.