In this article, we will provide the Google AdWords 101 by giving you 1) a short introduction to AdWords, 2) explaining the basic principles of AdWords, 3) the benefits and disadvantages of Google AdWords, and 4) some tipps for creating a great AdWords campaign.


What is Google AdWords?

Google AdWords is an online advertising service or program created by Google which enables a business to reach its target audience by creating web advertisements and competing for their display. The advertisements created using this program are based on the concept of Keywords, which are selected or defined by the advertisers. Using Google AdWords, businesses can choose the budget to create the ad, choose the location or web pages where the ad will be displayed and also evaluate the result or impact of the advertisement. Users can choose any amount that they wish to invest in using this service as there is no upper limit cap. Also, Businesses can stop using Adwords or give it a break whenever they wish to.

Google AdWords was launched in the year 2000 and during the initial days, the advertisers were required to pay a monthly fee to get their campaign set and managed by Google. But later in 2005, a self-service feature was introduced and named Jumpstart. In the year 2013, the company announced that it will be introducing further features so that the advertisers can handle and manage their ad campaigns in a better and more efficient way. The improved features made it possible to show ads across various devices including mobile phones and tablets as well.


For example, you run a hair salon in Boston and wish to advertise it. You can choose to create and manage your ad in such a way that it only appears to web visitors living in and around this area. So if someone is living in and around searches for ‘Hair Salon in Boston’, they will be able to see your ad and click on it to reach you.


If you are a business owner or advertiser who wants to use AdWords for advertising on the web, then you must first know how this service works. Google AdWords is the most popular Pay-Per-Click marketing method which works on the basis of certain basic principles that have been provided below for your reference:

Bidding Strategies

Advertisers who use Google AdWords need to place their ads in the Auctions. These auctions are run by Google to find the ads that show when someone searches on Google. To place your ads in an auction, you need to choose a bidding strategy depending on your objective. The following are some of the bidding strategies:

  • Cost-per-click – This is a strategy in which you focus on getting clicks on your ads. This is a method suitable for those who wish to build traffic on their website.
  • Cost-per-impression – This is a strategy in which you focus on the number of times your ad shows. Such strategy is suitable for those who wish to build on their brand name and image.
  • Cost-per-Acquisition – This strategy is related to the conversion rate of customers. It is suitable for those who are already established advertisers and are now interested in promoting purchases, etc.

Quality Score

Quality Score is the relevance and quality of your ad which Google measures to see if your ad is really useful to the customer and if clicking on it takes them to the page that they are looking to visit. The higher the quality score, the better it is for your business and even if your competitor’s maximum bid is higher than yours, your ad will appear above theirs provided your quality score is better. Some factors on which this score is dependent upon include account performance, the relevance of ad, the Click-through-Rate or CTR or ad and performance.

Checking Quality Score:

Every keyword gets a score between 1 to 10, 1 being the lowest and 10 the highest. There are several ways to check your quality score, and the easiest way is to look in the Keywords Tab. You can run keywords diagnosis by:

  • First, Click on the campaigns tab.
  • Then, Select the keywords tab.
  • Near the keywords status, there is a white speech bubble. Click this bubble to check the details of the quality score of the keyword.
  • Here you will be able to check on the landing page experience of visitors, relevance of ad and CTR rate as expected.

Another way to check the Quality Score is to enable the Qual. Score Column.

Ad Rank

Ad Rank is another important principle of Google AdWords and is the ranking given to an ad based on its bid and its quality score. Basically, all ads are placed in an order that is based on the Ad Rank. The ad with the highest Ad Rank is in the top position, and subsequent ranks get subsequent positions. Here’s the formula for calculating the Ad Rank of an ad:

Ad Rank = Quality Score * Bid

Now, the amount that an advertiser pays to display an ad is the minimum amount needed in order to defeat the Ad Rank of the rival ad placed below them. This Amount is known as the Discounter. This amount can be calculated using the following formula:

$$ = Ad rank to beat/Quality Score + $0.01

How Quality Score Affects Ad Rank:

From the formulas mentioned above, it is clear that the Quality Score greatly affects the Ad Rank. In fact, several components of the Quality Score can affect the rank, and some of them include auction-time calculations of expected CTR, bid, landing page experience, etc. A business or an advertiser can thus improve its Ad Rank by improving upon these components. This is how:

  • The quality of the landing page: you must create an information rich, easy to navigate and transparent landing page to improve the quality score and thus Ad Rank.
  • Expected CTR: Expected CTR can be improved by improving impressions of the ad, historical clicks on the ad, extensions, the position of the ad and other such factors.
  • Ad relevance: the text and message given by the ad must be relevant to what a person searches it for.
  • Performance on targeted devices: your ad must perform well on all devices that it targets including computers, laptops, mobile phones and tablets, etc.
  • Geographic factors: your campaign must be successful in the geographic locations that you have targeted and should be able to reach out to target audience in that area.


Top Benefits of Google AdWords for Entrepreneurs

1.   Flexibility

One of the top benefits of using Google AdWords is that it is an extremely flexible service that can be customized by advertisers and businesses as per their requirement or convenience. The platform makes it possible for you to create an ad for a selected region, selected audience and customized keyword searches, etc.

  • Flexibility in bidding strategies – there is a great deal of flexibility in terms of bidding strategies. You can either choose Cost-Per-Click, Cost-Per-Acquisitions or Cost-Per-Impression, based on your needs.
  • Flexibility in the format – AdWords allows you to choose the format you wish to display your ad on. For example, you can choose to display it on the mobile format, the PC format or both.
  • Flexibility with keywords –you can choose the exact keywords to which your ad will be displayed. You can either choose a small set of keywords or a broad set.
  • Flexibility in running several marketing campaigns – you can run a whole range of ad campaigns for several different marketing objectives.

2.   Measurement and evaluation

Online marketing methods like Google AdWords are highly measurable unlike other channels like Magazine and TV advertisements. In fact, even SEO and Social Media marketing methods are difficult to measure since they are not as transparent as AdWords. You can measure and evaluate results and trends at a more granular level and change the things that may not be working well. You can measure the real ROI, sales and conversions and brand awareness with this service and hence continuously improve yourself to improve profits.

3.   Speed

AdWords is increasingly becoming a popular marketing method since it takes a little time to show results. Unlike SEO, which can take months to show profitable results, AdWords helps you get clicks instantly and build impressions soon after ad placement. Because this method is so fast, one can easily monitor results and test keywords for their performance. If a particular keyword is not working well, then one can change it or remove it instantly. Whereas, on the other hand, a keyword that works well in AdWords may be worth trying out in SEO as well.

4.   Controllable budget

Another advantage or benefit of using Google AdWords is that with this method, one can set their budget to set up an ad. You can reduce and increase this budget any time you wish and also have an option of setting up the budget daily, based on the performance of the previous day. This means that small or local businesses can use this method flexibly and without having to invest a lot.

5.   Reach

Unlike hoardings and newspaper ads, ads created and posted through Google AdWords allow you to reach out to a much bigger and targeted audience. In fact, besides reaching customers with PCs, one can also reach out to those with mobile devices and tablets. This means that a smaller businesses that cannot afford to invest in reaching out to those outside the city through traditional marketing methods can use this method to do the same without having to spend that much.

6.   High relevance

Another benefit of Google AdWords is that the ads created there should be made highly relevant. Not only do these ads showcase what customers are looking for but are also meant only for those who are looking for that kind of service. AdWords is a superb way to attract highly relevant and targeted audience who have a higher chance of converting.

Main Disadvantages of Google AdWords

1.   Every click is chargeable

One of the major disadvantages of using Google AdWords is that every click on it is chargeable. This means that advertisers need to pay for clicks to get visits to their website. This method may help you get more visitors, but it still doesn’t ensure that these visitors will convert into customers. Thus for some businesses, it may prove to be very expensive and not worth the investment. In fact, making mistakes on this platform too could prove expensive because of the chargeable clicks feature.

2.   Not the best way to reach your customer for every company

It may be a superb way to market and promote their products and services for many companies, but it is not for everyone. It is not necessary that your target audience will be able to locate you online because even in spite of the popularity of the internet, not everyone looks online when in need. This means that AdWords doesn’t fit for some markets.

3.   Difficult to compete with big companies

Since AdWords can prove to be a slightly expensive way of advertising or marketing, it may be a difficult channel to compete with the bigger and richer companies. The bigger brands can afford to invest thousands of dollars every month on an ad campaign and may bid higher. This means that if you are a small scale or budding business, then you may find it very challenging and expensive to rival established and well-known companies.

4.   Removal of presence if unable to make payments

If you are unable to make due payments on Google AdWords, then your presence from it can be immediately removed. This is yet another disadvantage of using this platform, especially for smaller businesses that do not have a consistent cash flow and may sometimes lag behind in making payments.

5.   No competitor data is shared

Google does not disclose the data or performance information of rival or competitor businesses and hence there is no way to compare data with that of competitors while using AdWords. Without a proper comparison, you may not be able to improve on the issues that you may be lacking on, as compared to your competitors.


Select highly relevant and compelling keywords

Keyword selection is one of the most important factors that determines the success or failure of a Google AdWords Campaign. It is very important to select highly relevant keywords that are not only compelling but also in demand. Below are some of the ways using which you can come up with suitable and effective keywords for your ad campaign:

  • Keeping your product/service and your target audience in mind: The keywords must be selected in such a way that they are relevant not just to the product or service that you offer but also to your target audience. They must match the purpose of your products, services as well as that of the advertisement as a whole.
  • Estimating customer demand also using tools like keyword planner: The keywords you select must be popular and in current customer demand. Tools like keyword planners can help you come up with a list of the most popular keywords.
  • Comparing your short list of keywords with competitors using: If you have come up with a list of some keywords for your campaign, then it is very useful to compare it with that of your rivals or competitors who are selling similar products and services. Such comparison can be done by using tools like Keyword Spy.

Write a compelling AdWords ad

Besides having compelling keywords, it is also very important for your ad to be attractive to the target audience. The ad must be specific, clear and should intrigue one enough to make them click on the ad. The following are some points using which you can come up with such an AdWords Ad:

  • Using your customer USP: USP or Unique Selling Proposition is a quality of yours which makes you different from your competitors. It is important to state very clearly your USP in your ad so as to generate more traffic and improve the sales conversion rate. Having and giving your USP also reduces the price comparison shopping trend that can prove great for your business.
  • Using Call-to-Action: The ad must have a Call-To-Action so that you give your customers some information on how to reach you and order your products or services. Not including such a statement may sometimes turn away interested customers and may make you lose on a golden opportunity of customer conversion. The Call-To-Action must be strong, simple and easy to understand.
  • Potentially using negative keywords: Negative keywords are the kinds of keywords which are related to other kinds being used in the campaign but not related to what you are advertising or promoting. Using such keywords is also a good way to create a compelling ad because these help to qualify the ad within the campaign and make way for a much more streamlined advertisement.

Target your ads

Another tip to enjoy a successful AdWords Campaign is to incorporate all the 3 types of keyword targeting which include broad match, exact match and phrase match in your bidding strategy. Exact match keywords must be focused more upon whereas broad match keywords must be given slightly less weight.

Monitor and Optimize campaigns

A good ad campaign is one which is regularly monitored and tweaked. If you are a small business owner then managing this on your own may be a little hard but it can keep your costs low and performance high by eliminating ineffective keywords. Constantly check the search term reports that help you to check CTRs, sales and conversions, the impact of ads and higher cost per click keywords.

Don’t mislead customers

Your Google Ad needs to be 100% accurate and should claim only what you will be offering or delivering. It is very important not to mislead the audiences by making false claims or promises just to attract them. The ad must be relevant to the landing page and should have no irrelevant text.

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