What is Google Adwords and how does it work?
Google Adwords is Google’s advertising platform used to display ads in different formats. In this way, through Google you can generate four types of advertising campaigns. Search campaigns and shopping campaigns, which are characterized by appearing in Google search results and in addition to these we have video and display campaigns, which are characterized by appearing on YouTube or other web pages associated with the Google Adsense program or DoubleClick Ad Exchange publisher sites.
How big is Google Adwords?
Google is not big, it is huge. Let’s see just some data:
- In 2016 Google’s ad revenue was $95 billion, a year later in 2017 it was $107 billion.
- In 2016, Google had 94% of all mobile/tablet traffic worldwide, followed by Yahoo with 3% and Bing with 1%.
- In 2016, there were more than 2 trillion searches on Google for the entire year.
Google Adwords: how does it work?
We come to the key point, what Google Adwords is and how it works: Google invoices with a pay-per-click system or popularly known as PPC or CPC (Cost per click). Although there are others such as CPM (Payment per thousand impressions), the most popular and most used in Google Adwords is pay per click. What does it consist of? It’s very simple, the advertiser pays each time a user clicks on her ad. That is, if his ad appears ten times and is clicked on once, he will only pay for one click. This gives advertisers a great advantage in that they only pay effectively when someone has shown interest in their ad.
And the million dollar question: Who establishes that CPC? The cost per click depends on the segmentation that we have done. In other words, if we have chosen a very competitive keyword in which many advertisers want their ads to appear and several of these advertisers are willing to pay a high price for that click, we will have high CPCs. However, if we are going to bid on a keyword where there are hardly any interested advertisers, the cost per click will be very small. As you can imagine, the CPCs vary a lot depending on the sector and also on the time of year. For online stores, Christmas is not the same as summer, and for a school, September is not the same as April. When there are more searches and more interest from users is when the costs per click tend to rise. To find out the average cost per click of a keyword that interests you, I recommend that you use the
auction system
Let’s put an example on how google adwords works and a real-time auction occurs for the search channel. A user logs into Google and types in a search, for example “used laptops”. In Google Adwords there are a number of advertisers or companies that are interested in appearing for that keyword or search. Each of these advertisers has set a maximum bid for that word. That is, each one of them in their Google Adwords panel has established how much they are willing to pay for a click from a user who has searched for that keyword. In the example above, we can put three advertisers, who are willing to pay 30 cents, 25 cents and 20 cents each. Google will take into account this factor in addition to the Quality Score of that advertiser to order the results displayed. Quality Score is used to assess the quality of the advertiser’s ads and landing page for that keyword. This auction occurs in milliseconds and could leave an example of results like this:
keyword matching
In order not to have to go crazy and think of all the possible combinations that a user can make when searching, Google established keyword matches. There are four and I mention them from lowest to highest order of restriction: Broad, broad modified, phrase and exact. Modified broad match is recommended when you want to get clicks from keywords related to the one you set. Exact is used when you want your ad to be triggered by searches exactly as they specify your keyword. To establish them, we will use symbols that accompany the words.
Broad match: Ads appear on searches that include misspellings, synonyms, related searches, and other relevant variations.
Modified broad match: Your ads appear on searches that include modified broad match keywords.
Phrase match: Your ads appear when a phrase or slight variations of it are searched for, with additional words before or after it.
Exact match: Ads may show when an exact term or slight variations of it are searched for.
What does it take to get started?
To start using Google Adwords you first need to have a Google Adwords account where your billing information is specified. From here, your account is structured in campaigns. These campaigns serve to logically structure an account and divide it into different products or services. At the campaign level we will establish options such as maximum daily budget or geographical location. Within these campaigns we will set our keywords or targeting and ads at the ad group level.
In addition to this, we clearly need something else: A web page or where we direct the traffic generated from ads.
Analyzing the ROI in Google Adwords
Based on the following formula to calculate the ROI:
ROI = (Profit – Investment) / Investment * 100
It is easy to intuit that in Google Adwords it will be relatively easy for us to calculate the ROI of our advertising campaigns if we know the advertising investment and the benefit that we have obtained from them. It is one of the main advantages that Adwords has over other forms of online marketing, ROI is easy to analyze. In addition to this, it has other advantages such as being quick to activate and being an ideal complement for SEO.
We help you with Google Adwords
I hope this article has helped you to better understand What is Google Adwords and how does it work? If you want to know more about this topic, you can leave your comment or write to us.
Do you already have a Google Adwords account? Do you want to know if it is working correctly?
Facebook Comments
Disqus