If you’re new to the search marketing world or just want a plain-English description of certain phrases and tools in digital, then you’ve come to the right place.

Here we’ll be looking at Google AdWords, Google’s own advertising service which allows you to place search results for your website on a search engine results page (SERP) by paying for them.

There’s no need to wait for your new site to work its way organically up the rankings. By using paid search you can see immediate results and it’s not nearly as difficult to use or expensive as you may think.

Paid search

Paid search is the term we use for advertising within the listings of a search engine. These normally appear at the top of a SERP or to the side, and increasingly look more and more like organic results. At the moment Google places a small yellow ‘Ad’ label on them.

Google isn’t the only search engine where you can do this, Yahoo and Bing also run their own advertising network, called the Yahoo Bing Network. 

For now though, let’s take a look at Google AdWords...

Basic principles of AdWords

Basically you pick some keywords that a searcher might use on Google, then create an advert that will appear on the SERP based on those keywords, such as this…

Of course you’re probably not going to be the only company wanting to serve adverts to people who use those particular terms. Rival companies can bid for the same search term, often causing the top of a search engine results page to look like this...

If you want your ad to appear at all, you have to bid against other marketers on how much you’re willing to pay Google AdWords every time a searcher clicks on your ad. 

Obviously the more you pay-per-click (PPC) the more likely your ad will appear in the search results. 

However, and this is a big however, unlike other real-time bidding models, it’s not just the highest bid that is taken into account. Google also uses something called a ‘quality score’.

Quality score

Google looks at how relevant and useful your ad is to the searcher and the search terms they’ve used. It also looks at how many clicks your ad has received previously, also known as its click-through rate (CTR) and how relevant your landing page is.

For instance if the searcher types ‘Nike Air Max’ and your advert appears saying “buy Nike Air Max here”, once the ad is clicked this needs to lead the searcher directly to a page featuring Nike Air Max trainers. If it just goes to your generic homepage, it’s not good enough.

The higher your quality score, the better. In fact even if your maximum bid is less than a rival bidder, you still may appear above their ad if your quality score is better.

Bidding

You pay Google AdWords each time your ad is clicked. The price you’re willing to pay for each click is called cost-per-click (CPC).

You can pick a maximum bid amount, and if you choose the automatic option, Google chooses the bid amount for you within your budget, and theoretically brings you the most clicks possible within that budget.

There is also another less common option called cost-per-impression (CPM). This is where you pay the search engine for every 1,000 times your ad appears on the SERP. The user doesn’t have to click-through.

You can choose between either method.

The time it takes for Google AdWords to look at all the relevant advertisers bidding for a search term, decide whether there will be an auction or not, hold that auction, work out which ad offers a mixture of highest maximum bid + quality score and finally serves that ad on the results page, is the time it takes for someone to type a search term into Google and receive the results. Which is about 0.26 seconds.

Drawbacks

AdWords works so well that one study found that 40% of consumers are unaware that Google Adwords are adverts. Searchers may easily ignore organic search results further down, depending on the quality of their screen (or eyesight).

Alternatives

Yahoo Bing Network (YBN): In the US, this network accounts for 29% of online search, and according to its own data, searchers on the YBN spend 23% more in the same sites found on other search engines.

Search engine optimisation (SEO):  all the methods, tactics and processes by which you can increase the likelihood of your website appearing, and possibly ranking highly in the organic (non-paid for) search engine results. If you employ cracking SEO, then you may not even need to do paid search. However many marketers will recommend that both are vital to search marketing and complement each other effectively. Here’s a good beginner's guide to SEO.

Google Shopping: you may have noticed in the example at the top of the page a separate box showing sponsored shopping results…

You can submit listings such as this to Google Ads, by creating Product Listing Ads (PLA) featuring relevant details, rich images, product prices and your store name. Here’s a detailed explanation on how to get started with Google Shopping.

Join us at our Festival of Marketing event in November, a two-day celebration of the modern marketing industry, featuring speakers from brands including LEGO, Tesco, Barclays, FT.com and more.

Christopher Ratcliff

Published 30 October, 2014 by Christopher Ratcliff

Christopher Ratcliff is the editor of Methods Unsound. He was the Deputy Editor of Econsultancy. You can follow him on Twitter or connect via Google+ and LinkedIn

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Comments (5)

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Alistair

This is a nice introduction to someone who is new to Adwords and PPC advertising. While I already have PPC certifications from Google Adwords and Bing Ads, it's always nice to read introductory articles as you may find information that wasn't mentioned in another article. For example, while it comes as no surprise, I didn't know that there was a study done that determined over 40% of Internet users were that the top ads from Adwords were ads. What's interesting about this is that I once read another study where most Internet users claimed to have never clicked on a Google ad.

about 3 years ago

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Aman Sharma

Yes this is nice introduction for a fresher. Trying his hands on PPC I have came across so many people confused between organic and paid result. This will surely a great help for them.

about 3 years ago

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nicolo omento

Very clear (and short!) introductive piece in google adwords. You get the basic insights in this tool without wasting time with secondary information

about 3 years ago

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Roger England

Surely one of the simplest and clearest explanations of Adwords I've ever read. In future I will refer all new PPC clients to this article - thanks Christopher!

about 3 years ago

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cornett dianna, Asst. Manager at IT

Thanks Christopher for sharing a nice post. I'm a new blogger. I got much information from your post. Can you please tell me more that if a customer click on ad more than one time google charges again?

over 1 year ago

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