Google Adwords is Google’s own advertising service, which allows you to place search results on your website on a search engine results page (SERP) by paying for them. When set up and managed properly, Adwords is one of the best sources for new customers. The Ads can appear on the top or at the bottom of the Google search results page next to or under an “Ads” label. Ads are ranked based on how relevant and useful they are to what the person who makes the search, your bid, and few other factors.
Basic principles of Google Adwords
It all starts with a query when someone searches for something on Google; Google looks at the Adwords advertising pool and determines whether there will be an auction or not. If more than one advertiser is bidding on that keyword there will be an auction.
Note: Keywords are not searched queries! Specific keywords such as watches for sale may be entered into an auction for a wide range of search queries such as- Men’s watches, Women’s watches, Watches online etc. Advertisers identify keywords they want to bid on, how much they want to spend, and create groupings of the keywords that are paired with the Ads. The Ad auction is lightning fast.
There are soma main factors that determine who wins the bid and gets their Ad on Google search engine.
Bid: When you set, your bid in Google Adwords you’re telling Adwords, how much you are will to pay for a click on your Ad that is placed in the search engine. You can change your bid at any point of time .You can pick a maximum bid amount that you’re willing to pay, and then choose the automatic option, then Google automatically chooses the bid amount within your budget.
The quality of your Ad: Adwords also looks at how relevant and useful your Ad is and the website it links, to the person who’ll see it. It also looks at the clicks your Ad has got so far also known as the click through rate. The quality also depends on upon how relevant your landing page really is. For example, if your Ad says buy Philips hairdryer here and if someone clicks on the Ad it should directly lead to the page featuring Philips hairdryers.
The higher your quality score is, the better it is for your Ad’s ranking. If your quality score is good even if you bid lesser than your competitors your Ad might still get placed above their Ads.
The impact from the Ad extensions and other Ad formats: When you create your Ad, you have the option to add additional information to your Ads, such as phone number, or more links to the specific page on your site. These are known as extensions. Adwords estimates the impact of the extensions in the Ad, so even if your competitors bid higher than you did, your Ad can still show up first.
The Ad Rank
Every advertiser who has a keyword match to the search query competes in the auction. How well advertisers compete depends on upon their Ad Rank. So how does Google calculate the Ad Rank?
Ad Rank = Quality score*maximum bid amount for your keyword
A question like does Google Ad words really work might haunt you and stop you from investing in Google Adwords. Nevertheless, you have to consider the fact that many people use Google, people of all ages are familiar with Google searches. Every year many companies invest a lot of money in Google Adwords, they have seen good returns on their investments. Depending on the competitiveness of the keywords, you’re bidding for, the relevance of the keyword and landing page, a website with a good user experience you can see real returns from Google Adwords.