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What Is Adwords?

For businesses everywhere, Adwords is one of the essential marketing platforms for generating a quick ROI. Here's everything you need to know about what it is, how it works, and useful strategies.

Ask digital marketers to tell you the most cost-effective, fastest way to get an astounding ROI, and they’ll say the same thing: Google Adwords.

And they’d be right. 

Adwords is undoubtedly the fastest and most cost-effective way to get the right offer directly in front of your target market– who are ready to click, convert, buy. 

That’s why, even with all the other ad platforms available, marketers and business owners alike are investing the majority of their online advertising dollars in Google. 

In 2018 alone, more than 1.3 million businesses across the United States benefited from using Google’s advertising solutions. 

So, what is Adwords and how does it work?

In this guide, we’ll cover the essentials. 

 

What is Adwords? 

AdWords is a pay-per-click advertising platform run by Google. 

Pay per click (PPC) advertising means you only pay when people click on your ad. 

The platform is split into two networks: the Google Search Network and the Google Display Network.

When advertising on the Search Network, advertisers place ads on Google’s search engine results page (SERP). 

On the Display Network, advertisers place display ads on Google’s network of sites across the internet.

Note: Google Adwords has recently rebranded as Google Ads – so if you hear marketers talk about Google Ads, it’s the same thing. 

Search ads from Google Adwords normally appear at the top of a SERP and are marked by a small green ‘ad’ label:

cheap home loans search example

 

How Adwords work 

When someone searches for something on Google – a product or service – Google looks at the advertisers on Adwords.

If one of more advertisers are bidding on the keywords that Google determines as relevant to the search query, it triggers an auction. 

Advertisers identify keywords they want to bid on and create groupings of these keywords that are paired with ads and landing pages. Then, they specify how much they want to spend (usually on a per click basis).

Now for the really important bit:

Google take the keyword from your account that it sees as most relevant and enters it into the auction along with your maximum bid and the associated ad you’ve created. 

Pro Tip: You can only have ONE ad entry into any query auction at a time.

Then the winning ads are shown on the search results. 

 

How does Google work out which ad to show where?

The thing that makes Google Ads different from other PPC platforms is how often an ad shows, its position on the SERP, and how much it costs depend on two key factors: 

Maximum CPC bid x Quality Score 

The maximum CPC bid is the maximum cost-per-click bid you have specified and are willing to pay for your keyword. For example, you might set you maximum bid as $1.20 per keyword. 

Quality Score is a metric which Google uses to determine how relevant and useful your ad is to the user. 

Quality Score is worked out using Click Through Rate (CTR), relevance and landing page. 

The higher your Quality Score, the more Google will show your ads for search terms you’re targeting — and therefore, the stronger your Adwords campaign performance, so it’s critical to focus on improving your Quality Score to get the best from your campaign (more on that later). 

The best CPC bid x Quality Score wins the best position. 

Now your ad has been placed, the PPC part comes into play. 

You pay the minimum amount if your ad is clicked on. This means, if you have a high Quality Score, you can end up paying less for a higher position than other advertisers who have a lower quality score. 

Pro Tip: Google offers other bidding strategies other than just CPC. You can use CPM bidding (Cost Per Impression) and CPA bidding (Cost Per Acquisition). 

 

Why use Adwords for your business

The simple answer is this: Google Ads is a powerful way to get customers in the door, fast. 

In fact, Adwords campaigns can help you drive measurable results throughout the customer lifecycle, from brand awareness to conversion and right through to customer retention.  

How? 

Through audience targeting

Google Adwords helps you get in front of the right people at the moments that matter – in other words, when they are looking to buy.

That’s where the real ROI is.

People searching on Google have buying intent. 

They are typically in the market for the keywords they are searching, e.g. "Cheap sheds".

This is what makes Google Adwords such a powerful online marketing tool – you are targeting people who are looking to buy your goods or services at the exact moment they see your ad. 

In fact, high commercial intent queries on Google AdWords get 65% of the clicks (WordStream). 

Another benefit of Google Adwords is that it is highly scalable. 

If you create a campaign that’s converting like crazy, you can increase your Adwords budget to get even more conversions. 

It’s no wonder 62% of marketers plan to increase their PPC budgets in 2019!

 

How to use Google Adwords for maximum ROI 

According to Google, advertisers make $8 for every $1 they spend on Google Ads. 

That’s a massive 8:1 ROI. 

But it’s not as easy as merely submitting an ad, setting your CPC and hoping for the best. 

Here are some key strategies to reap an exceptional ROI: 

 

1. Run Google Ads in sync with other channels

Google Adwords is at its most powerful when used as part of a great digital marketing strategy. 

Forget about thinking of just SEO vs SEM. You might think they are completely different strategies. You might even think you have to choose one over the other. 

But actually, the two tactics work together to achieve amazing results. 

SEO is all about the slow burn. 

It can take at least six months to see results with SEO. 

Paid search, on the other hand, is more immediate. So you can use your Adwords campaigns to offset a slow start to SEO, boost brand awareness and get more qualified traffic through to your site. 

Interestingly, a study by Google found that searchers who see a paid ad are more likely to click an organic result. 

The reverse is true too – if a searcher sees a high-ranking organic listing, they are more likely to click on the ad for the same brand. 

It’s all about brand awareness. 

Paid search campaigns can raise brand awareness by up to 80%.

Another massive advantage of using SEO and Adwords together is that you have more data to inform your marketing decisions:

  • Pay attention to your Adwords ad copy that’s performing well, then use this to plan your SEO content for higher engagement.  

  • Analyse keyword data from your Adwords campaigns when developing your SEO plan. 

  • Combine the data sets to delve into your target audience and refine your whole digital marketing strategy.

The same goes with Adwords + email campaigns, Adwords + social media campaigns – you get the gist. 

The key is to get ALL your digital channels working in sync. 

 

2. Focus on improving your Quality Score

Google rewards advertisers with high Quality Scores with lower costs and higher ad rank. 

According to Wordstream:

Advertisers with Quality Scores around 8, 9, and 10 will gain an average of 37%-50% discount on their CPCs. 

impact on cost per conversion

Image credit: Wordstream

To be clear: your Quality Score has a DIRECT impact on your ROI.

The higher your Quality Score, the lower your cost per conversion. 

How to find out your score:

  1. Sign in to your Google Ads account 

  2. Select the campaign you want to check.

  3. Click on Columns > Modify Columns

  4. Click the Quality Score section

  5. Check the Quality Score, Landing Page Experience, Expected CTR and Ad Relevance. 

Now you know your position, how do you improve your Quality Score?

  • Keep keyword groups small and hyper-relevant. 

  • Optimize landing pages to create an exceptional experience. Make the landing page relevant to the keywords AND ensure the landing page is easy to navigate.

  • Customize your landing pages for specific ad groups. This ensures relevance.

 

3. Use long-tail keywords

If you want high CTRs for your Adwords campaigns, use long-tail keywords. 

Long-tail keywords have three or more words and are very specific to what you’re offering. They could be questions or more descriptive searches. 

For example:

“Cheap flights” is a normal short-tail keyword. 

“What’s the cheapest flight between NYC and LA over Thanksgiving” is a very specific, long-tail keyword. 

Even though they might be less prevalent in terms of search volume, long-tails have some significant benefits for Adwords campaigns:

  • Long-tail keywords are more specific, which means they pre-qualify traffic who are most likely to convert.

  • Long-tail keywords work best at the end of the purchasing funnel. People know what they are searching for, which means they convert at a higher rate.

  • Long-tail keywords are less competitive - fewer people are bidding for them so they cost less per click.

How do you find these keywords?

One easy method of keyword research starts by simply going to Google Search and typing in your keyword. Then see what Google suggests:

nyc home loan

A better, more comprehensive way is to use tools like SEMrush or Ahrefs’ Keywords Explorer.

 

4. Keep your Ad Groups tight

Pay attention to your Ad Groups. Your Ad Groups create the structure of each campaign and control the association between keywords and ads.

Google generally rewards Adwords advertisers with tightly structured ad groups. 

Give each Ad Group a tight theme, and ensure every keyword is relevant to the Ad Group. 

Seen a keyword that deviates from the theme?

Create a specific group for it. 

You aim ONLY to deliver an ad that’s relevant to the keyword used. That then improves your Quality Score. 

A good rule is to aim for:

  • Maximum of 10 Ad Groups per campaign

  • Less than 20 keywords per Ad Group

  • 2-3 ads per Ad Group

 

5. Work out your bidding strategy

How much are you willing to pay for a click?

Your maximum CPC is a critical part of your strategy. 

Why?

Because it’s  your Max CPC bid, along with your Quality Score, which will determine where your ad is positioned on the SERP. 

There are a few different ways to determine your Max CPC bid. 

If you’re just starting out on Google Adwords, use Automatic bidding to allow Google to set your maximum bid for you. 

Then, keep a close eye on how much clicks are costing you. 

Be sure to set a Max CPC bid limit, as this tells Google your overall limit for a single click. Then, you don’t have to worry about Google’s automated bidding increasing bids over that limit. 

In general, though, we recommend Manual bids for the simple reason that you have more control over what you spend. You can increase or decrease your budget depending on how your campaigns are performing. 

Track Google’s estimations for each keyword and look at Page #1 CPC and Top of Page CPC. Then set your maximum bid between these figures and adjust your bids accordingly.

 

6. Run experiments all the time

There’s no such thing as a static Google Ads campaign. In the majority of cases, there’s always something you can improve. 

A little tweak can make a massive difference in conversions. This could be something as insignificant as changing the colour of a CTA button on your landing page to maximize clicks or changing the wording of your ad headline. 

We recommend split testing ads and landing pages.

Some things you can test include: 

  • Offers

  • Colour schemes

  • Page designs

  • CTA language and position

  • Headlines

  • Tone of voice

  • Images

Even something as simple as moving a form could raise conversion rates by as much as 50%.

 

Adwords Glossary

 

Ad Groups 

An Ad Group is a container for your Adwords ads, keywords and landing pages. 

 

Adwords Auction

When a search query is made, Google processes the request and runs the auction to determine the ad position and each advertiser's CPC.

 

Ad Relevance

This measures how related the keyword you are bidding on is to your ads, and how much your keywords match the message in your ad copy and landing pages. The higher your relevance, the better your Quality Scores and click-through rates. 

 

Ad Extensions

Extra elements you can add to your ads, such as Sitelinks, Location and Call. 

 

CPC

Cost Per Click is the amount the advertiser pays each time someone clicks on their Google Ads ad. The average cost per click on Adwords is around $2.32 on the search network. 

 

Keyword Matching

Parameters that can be set on your keywords to control what searches trigger your ads to appear. Choose from 4 types of keyword match types in Adwords: 

  • Broad match: Your ad can match to any related search, including synonyms. For example, if you bid on “caravan fridge-freezer,” your ad may show when a user searches for “camping fridge”.

  • Modified broad match: This is more restrictive than a broad match, as your ad will only match when the search includes words you select with a + sign. Words can be in any order. 

  • Phrase match: This is more precise, as the keyword must include the search terms you bid on in order and uninterrupted. They can still include other terms before or after the phrase.

  • Exact match: Not as exact as they used to be - Google made some changes in 2017 so that function words can be added or changed, and it is still an exact match:

 

Negative Keywords

These prevent irrelevant keywords from triggering your ads, which saves you valuable budget. 

 

Quality Score

Google’s 1-10 rating of the quality and relevancy of your search ads and keywords. The more relevant your keywords, ad copy and landing pages, the higher your Quality Score will be. 

  

Over to you 

Google Ads can deliver a seriously fast and monumental ROI, but you still need to put in the hard yards. 

Whether you get an agency, outsource or hire in-house, don’t underestimate how much time you need to invest to get incredible results. 

If you don’t have time, find someone who does. 

Because without it, your Adwords budget will simply go to waste. 

We get it - the idea of investing your marketing budget inAdwords can be overwhelming. 

Start by working out exactly where Adwords will fit in your overall digital marketing strategy. 

Luckily, we’ve created this Digital Marketing Game Plan to help you. Download your ebook now!

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