How Google Ads works
Your ad can appear when someone searches for terms related to your product or service, or when they're on a website with content related to your business. How does this work?
Keywords connect you with customers
Keywords are words or phrases you choose when you set up your Google Ads campaign. These are terms you think your potential customers are likely to use when searching for products or services like yours.
By matching your keywords with the ads you create, you make it possible for your ad to show when someone searches for similar terms or visits a website with related content.
For example, if you deliver fresh flowers, you could use fresh flower delivery as one keyword paired with an ad promoting fresh flower delivery. When someone searches Google using the phrase fresh flower delivery or a similar term, your ad might appear next to Google search results, or on other websites related to fresh flower delivery.
Step right up and enter the ad auction
So how does Google Ads determine which ads should show? It all happens with a lightning-fast ad auction, which takes place every time someone searches on Google or visits a site that shows ads.
Google Ads calculates a score, called Ad Rank, for every ad in the auction. Ad Rank determines your ad position and whether your ads are eligible to show at all. Generally, the ad with the highest Ad Rank appears in the top position, and the ad with the second-highest Ad Rank appears in the second position (when ads meet the relevant thresholds). You can think of Ad Rank as having five factors:
- Your bid - When you set your bid, you're telling Google Ads the maximum amount you're willing to pay for a click on your ad. How much you actually end up paying is often less, and you can change your bid at any time.
- The quality of your ads and landing page - Google Ads also looks at how relevant and useful your ad and the website it links to are to the person who'll see it. Our assessment of the quality of your ad is summarized in your Quality Score, which you can monitor—and work to improve—in your Google Ads account.
- Ad Rank thresholds - To help ensure high-quality ads, we set minimum thresholds that an ad must meet to show.
- Search context - With the ad auction, context matters. When calculating Ad Rank, we look at the search terms the person has entered, geographical location at the time of the search, type of device used (such as computers or mobile phones), the other ads and search results that show on the page, and other user signals and attributes.
- The expected impact from your ad extensions and other ad formats - When you create your ad, you have the option to add additional information to your ads, such as a phone number, or more links to specific pages on your site. These are called ad extensions. Google Ads estimates how extensions and other ad formats you use will impact your ad's performance.
At the end of the day, what you pay
With cost-per-click (CPC) bidding, you're charged only when someone is interested enough to click your ad and go to your website. You tell Google Ads the most you're willing to pay for a click on your ad (called the maximum cost-per-click bid), but you could be charged less.
You have control over your Google Ads budget. You decide the average amount you want to spend each day. On the days when your ad is more popular, Google Ads will allow up to twice your average daily budget so you won't miss out on those valuable clicks. But don't worry, over the course of a month, you won’t be charged more than your average daily budget times the average number of days in a month (30.4).
For campaigns that are paused in the middle of the month or that otherwise don't run for the full month, you may see discrepancies between your average daily budgets and your total charges.
For campaigns where you pay for conversions, your daily spend may exceed your average daily budget by more than 2 times.
So now you know how Google Ads works. Now let's make sure it's a good fit for you.
Which online marketing option is right for you?
When you advertise with Google Ads, you're making a financial investment in your business. But it takes more than just money to see success. It's also vital that you invest time to regularly check in on your Google Ads account and make adjustments until you're satisfied with your return on investment.
Here's a rundown of what it takes to manage a successful Google Ads account. If you don't think you can dedicate the necessary time or budget to Google Ads, don't worry! We'll point you to Google's other services that can get your business in front of the right customers, without stretching your limits.
Plan on signing in to your Google Ads account at least once each week. How much time you'll spend there varies, but budget between 30 minutes to an hour per week to check on how your ads and keywords are doing, and make any adjustments to boost performance.
Just like with anything new, it might take a little extra time at first to learn the ropes. We encourage you to continue with the 2 remaining guides in this series. They'll walk you through building the right Google Ads campaign based on your goals and tracking and improving your results as quickly as possible.
Don't have the time to make sure your investment pays off? Consider trying one of these time-saving options instead:
All good investments take a little time to show returns—and Google Ads is no different. It's best to have a budget set aside specifically for online marketing while you're ramping up.