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A guide to Google Adwords

Source: Google

Adwords is a good way of getting found quickly, especially if your website is not currently being found.

AdWords overview

No matter what your budget or how little time you have, you can reach new customers and grow your business using Google’s online advertising program. With AdWords, you can choose where your ad appears, set a budget that’s comfortable for you (there’s no minimum spending commitment), and easily measure the impact of your ad.

How Adwords work

Benefits of advertising with Google

A few important things set AdWords apart from other kinds of advertising. Using AdWords, you can:

Reach people at the precise moment they’re searching for what you offer

  • Your ad is displayed to people who are already searching for the kinds of products and services you offer. So those people are more likely to take action.

  • You can choose where your ad appears -- on which specific websites and in which geographical areas (states, towns, or even neighborhoods).

  • AdWords reaches 80% of Internet users in the US. That's a big audience

How AdWords works

How keywords trigger your ad to appear

Keywords are words or phrases you choose that can trigger your ad to show on search and other sites. For example, if you deliver fresh flowers, you could use "fresh flower delivery" as one keyword in your AdWords campaign. When someone searches Google using the phrase "fresh flower delivery" or a similar term, your ad might appear next to Google search results. Your ad can also appear on other websites in the Google Network that are related to fresh flower delivery.

Placements: Advertising on non-search websites

Keywords can trigger your ads to appear next to search results on Google and other search sites. But keywords can also trigger your ads to show on other sites across the Internet -- Google-owned properties like YouTube and Google's partner sites like or, for example. We call these "placements." A placement can consist of an entire website or just part of a site. And these websites are all part of what we call the Display Network.

Google can automatically determine where your ads appear by matching your keywords to websites in the Display Network. Or, if you'd like greater control over where your ads appear, you can pick specific placements yourself. You can set bids for each and choose the sites where your ads might appear.

Ad Rank: How Google determines which ads appear in which positions
Now let's suppose that multiple advertisers use the same keyword to trigger their ads or want their ads to appear on the same websites. How does Google determine whose ads will appear and in which order? It's done automatically, based on what we call Ad Rank.

Your Ad Rank is based on a combination of your bid (how much you're willing to spend) and your Quality Score (a measurement of the quality of your ads, keywords, and website). Depending on where your ad shows and the type of targeting that you use, the formula for Ad Rank can vary a bit, but it always incorporates bid and Quality Score.

We'll go into more detail about Quality Score below; the important thing to know here is that the quality and relevance of your keywords, landing pages, and your ad are every bit as important to your ad's rank as the amount you're willing to spend.

A bit about bidding and Quality Score

Your bid and Quality Score can work slightly differently across different campaigns types. Here are a couple of examples to help illustrate.

With a keyword-targeted ad on Google and its search partners, your bid would be your maximum cost-per-click bid -- the maximum amount you're willing to pay for each click on your ad. Your Quality Score is based on the relevance of your keywords, the quality of your landing page, your ad's clickthrough rate (CTR), adjusted for its position on the page, and a few other factors.

In the case of a placement-targeted ad on the Google Display Network using Cost-per-thousand impressions (CPM) bidding bidding, your Quality Score is simply based on the quality of your landing page.

There are a number of variations, but the general themes are the same.

At the end of the day, what you pay

You'll always pay the lowest amount possible for the best position you can get given your Quality Score and bid. To find this amount, Google looks at the Ad Rank of the ad showing in the next position (for example, for ads appearing on a Google search page, this would be the position just beneath your ad), and only charges you the lowest bid amount that would have beaten that ad's Ad Rank, rounding up to the nearest cent. So regardless of your bid amount, you'll only pay the minimum that's needed to beat the advertiser below you.

How costs are calculated in AdWords

AdWords gives you control over your advertising costs. There's no minimum amount that you have to spend. You set the maximum amount you're willing to spend each day and choose how you'll spend your money. Go to your account at to see full reports of your advertising costs and billing history anytime.

Every time someone searches on Google, AdWords runs an auction to determine the ads that show on the search results, and their rank on the page. To place your ads in this auction, you first have to decide what type of customer action you'd like to pay for. For example, you might choose to pay for the following actions:

  • When someone clicks on your ad (cost-per-click or CPC)

  • How frequently we show your ads (cost-per-impression or CPM)

  • How many conversions you receive (cost-per-acquisition or CPA)

These are called your bidding options. Most people starting out in AdWords use the basic CPC bidding option, which means they accrue costs based on the number of clicks they get on their ads. If you use this option, the amount you're charged per click depends in part on the maximum cost-per-click bid you set in your account, also called maximum CPC bid. This represents the highest amount that you'll ever pay for an ad click. In fact, you'll be charged only the amount necessary to keep your ad at its position on the page.

Where your ads can appear

When you advertise with AdWords, your ads can appear on different places across the web, depending on how you target your ads, to whom you choose to show them, and the types of ads you create. Here's where or to whom your ads can appear:

  • On Google Search and other search sites

  • On websites that people visit

  • On mobile phones with full browsers, tablets, and devices

  • To people in specific locations or who speak a specific language

  • To specific audiences

Before you choose where to show your ads, try thinking like your customers. What do they like? What are their habits? Where are they? What do you need to know about them so you can best reach them with your ads? Keeping your customers in mind when you make your choices can help you reach more customers and get a higher return on investment (ROI).

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