Adwords can be confusing, even for the most seasoned business professional. We looked at what the gurus in the space have to say on the subject – WordStream, Hootsuite and Quora to put together this basic tutorial for you. A little insider knowledge can turn questions into confident decision making.

1. What are AdWords?

They’re the most recent name for Google Ads – the leading online advertising platform created by duh – Google.  While other search engines also have these (Bing for example), Google is by far the leader of the pack.  AdWords are where advertisers (you and your competitors) pay to display advertisements, service offerings, product listings, or video content within the ad network. These ads are posted to nudge prospective buyers to see your ad at the top of a search page when rummaging about online.

2. Why the fuss with Sponsored Results?

First, “sponsored results” is another term for AdWords. You are funding a set of words that, when typed into Google by users (potential customers), your business pops to the top of that search page.

Secondly, businesses find AdWords valuable because (according to research):

  • Sponsored results earn 2X as many clicks as the organic results (not sponsored). Searchers looking to buy a specific product are more likely to click the sponsored ads.
  • For keywords with high commercial intent (meaning, you know what it is the searcher wants to buy and write the copy accordingly), the paid ads receive 64.6 percent of all clicks.

3. What is Ad Ranking?

This is the fun part, especially if you enjoy going to an auction and bidding on “vintage Petroliana,” ancient artifacts, or antique cars. In fact, the process with posting AdWords is weirdly similar. Just like a live auction (where an item is put up for sale with a starting price), the auctioneer begins calling for bids. In this case, you step into Google’s virtual auction house. Instead of an antique dresser, you’re bidding on the placement of keywords people use when searching for products or services you’re selling.

  • Your bid is determined when you set your budget for your Ad Campaign. Other elements (selected when you set up the AdWord Campaign) such as industry, the geographical location you want the ads to appear in, and even the time of day you want them to display, are also factored into the equation.
  • Besides your bid, it’s also the projected quality of the ads (as in great content) submitted that ultimately determines your ranking.

See this graphic directly at WordStream

4. What’s a Quality Score, and how does it affect PPC (Pay Per Click)?

Obviously, Google isn’t releasing its “Secret Sauce” on what exactly goes into determining the quality of a site. However, we do know that Quality Scores have enormous influence over the cost and effectiveness of paid search campaigns. In fact, the Google Quality Score affects how PPC ads perform and how much is paid for each click.

The term Quality Score is Google’s rating of the quality and significance of keywords and PPC ads. It is used to determine Cost Per Click (CPC) and multiplied by the maximum bid to establish the ad rank in the ad auction process. Quality Score depends on multiple factors, including:

Google Quality Score

Your click-through rate (CTR) • The relevance of each keyword to its ad group • Landing page quality and relevance • The relevance of your ad text • Your historical AdWords account performance

  • No one outside of Google knows exactly how much each factor weighs in the Quality Score algorithm (again, hush-hush magic), though it is believed that the click-through rate (CTR) is the most influential.
  • When more people who see your ad click it, that signals Google your ads are relevant and helpful to users. Accordingly, Google rewards you by placing your ad with a higher ranking and at a lower cost.

Reference the above graphics and related content directly at Quora. Recognition Attributed to Evelyn Richardson, Digital Marketer

5. How can I increase the quality score?

  • Do your homework and research keywords. Look for highly relevant keywords to make up the substance of your ad campaign, including long-tail opportunities that can positively nudge overall traffic. Example- “Get help for shortness of breath”
  • Organize “key words.”  Arrange keywords into well thought out “word bites” (very short statements) that directly tie to your ad campaigns. Note that you will likely have more than one or two campaigns going on at any one time.
  • Refine your text. Test out your ad copy to ensure it targets your intended audience. The more effective your ad, the higher the CTR, a key strategy when bumping up your Quality Score.
  • Optimize your website landing pages. Create pages that connect directly with ad groups so that those clicking through to your site don’t have to hunt and peck to find that thing they were looking for. Remember, you’re after “conversion” – taking someone from searching to someone buying.
  • Keep an eye on irrelevant keywords. Be ready to toss those search terms that aren’t scoring well in lieu of those that are. Adjust your campaigns as needed.

6. What will it cost me?

Digital marketing is hugely different compared to traditional advertising used in past years. Google AdWords is designed as an auction marketplace where the “thing” Google sells are website visitors. How much you spend on Google AdWords primarily depends on the industry you’re in.

Things to note:

  • Recognize your budget is spent on several mini-markets inside AdWords –keywords. Each keyword group comes with its own set of prices and factors that should be taken into account.
  • Think of PPC advertising along the same lines as traditional print advertising; you’d expect to spend more on a slick multi-colored full-page ad in a nationally renowned magazine than you would for a classified ad in your hometown newspaper.
  • In digital marketing, the focus isn’t on the format of the ad. Rather, it’s in the commercial intent and competition for the keywords being bid on.
  • Some keywords are significantly more expensive to bid on than others. It comes down to your industry niche and how competitive the market is. Planning, rather than quickly scribbling off some ad copy and giving Google your credit card, is crucial.
  • WordStream states “In the US (when averaging across all types of businesses and keywords), the average CPC in Google Ads is between $1 and $2. That’s on the search network. On the Display Network, clicks tend to be cheaper, and the average is under $1.”
  • According to Hootsuite: “On average (though wildly variable given the industry), you could be paying anywhere from 19 cents a click to more than $5 per click.”
  • When it comes to how much you should spend on Google AdWords, it matters how much you and your competitors believe a potential customer is worth, and those customers will have wildly different values depending on the industry.
  • Control how your Google Ads budget is spent by using tactics like ad scheduling, geotargeting, and device targeting.
  • The most expensive keywords in Google Ads and Bing Ads cost $50 or more per click. These are generally highly competitive keywords in industries that have high customer lifetime values, like law and insurance.
  • Giant retailers can spend up to $50 million per year on paid search in Google Ads.
  • The range small business use with Google Ads is wide – anywhere between $500 and $10,000 per month.

7. Any example of a budget breakdown?

Here’s an example by one of the sources we’ve cited in this article:

Assume you have an ad with a CPC of $0.25, and you’d like to receive 300 ad clicks per day. Using these figures, you can calculate an estimated daily budget:

.25 x 300 = $75

  • In this example, 25 cents is the most that you’d be charged if 25 cents is your maximum CPC. However, the actual amount you could be charged per click can change, depending on the variables of each individual ad auction (remember that bit on quality?).
  • Remember: if you set your maximum CPC at 25 cents, you’ll never pay more than that for a click – but you might end up paying less.

8. What else should I know?

You can get pretty granular when it comes to AdWord campaigns. Things like adding the right Call-To-Action (CTA), FOMO (Fear of Missing Out), Geotagging, Scheduling and “Type of Device” tactics are all part of today’s digital marketer’s repertoire.  But, to kick-start your foray into the world, the following summary points should suffice:

  • START SMALL. SCALE. Ease your way into the digital auction world of AdWords.
  • Only if campaigns are going well should you add more money.
  • Keep an eye on the metrics. Set up conversion tracking properly to monitor the right measurements (Google’s dashboard makes it easy to monitor traffic).
  • Mostly, when contracting with others to help you run your AdWord campaigns, be a savvy consumer by reading up on the topic.

 For a deeper dive, check out these sources:

– AdWords Overview: WordStream
– Quality Score: Quora
– AdWord Pricing: Hootsuite
– Most Expensive Keywords: WordStream

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Victoria Tucker

Co-Founder / CEO, ZBglobal, Inc.

Victoria Tucker is the Chief Dreamer at ZBglobal, where she lends her 30+ years of experience on pivotal topics like workforce collaboration, engagement, mentoring and project management. She also plays ukulele…but not very well. Reach out to her!