A Beginners Guide to Google Ads
Interested in showing up in the almost 2.3 million searches performed on Google each second? Let’s break down Google Ads in this beginner’s guide.
What is Google Ads?
Google Ads (formerly Google Adwords) is an online advertising platform that helps you grow your business by allowing you to run ads alongside Google search results, on the
Google Display Network or on YouTube. You can choose what type of ad to run, search (text-based) ads, display ads, video ads or app ads.
How does Google Ads work?
Whether text, display, video or app ads, your ad can appear based on a user’s search, keywords they are using, interests, websites, geography and more.
For example, a search ad can appear when you do a search on Google. You will see some results show up with “Ad” beside it. These ads are called “pay-per-click” (PPC) ads, which means you only pay when someone clicks on your ad. When a user does a search, your Ad is positioned prominently, which increases the likelihood your prospective customer will see it – and take action.
Here is an example of a Google SERP (search engine results page). The first 1-4 ads are paid Google ads, which show the “Ad” designation beside it, while the ones below them are “natural” or “organic” search results.
Google Ads works as an auction. Businesses select keywords to bid on that are relevant, and how much they are willing to pay for a user to click on their ad. The bid amount, along with quality score (a value set by Google based on the quality of your ad) determines if and where your ad will appear in the search results
- A search is conducted by a user on the Google search engine – www.google.ca (or .com)
- Google decides based on that search if your ad is eligible (by keyword, bid and quality score)
- Your ad appears next to organic Google search result
Another example of a Google Ad occurs when you are visiting a website, which is a part of the Google Display Network, a display ad could appear on the page based on the website’s content or keywords.
How to get started with Google Ads?
To get started using Google Ads, you must create a Google Ads account, which is as simple as entering your email and your website’s URL.
Why should I use Google Ads?
Google Ads is a powerful tool that allows you to reach people already showing intent – i.e. when they are searching.
You can precisely target your ideal customer using geographic, demographic, interest-based or remarketing:
- Demographics – geographic, age, gender, device
- In-market – users who are searching for products or services like yours
- Custom intent – words or phrases people are using to find you
- Similar Audiences – audiences similar to your remarketing lists
- Remarketing – target users who interacted with your ad or website already
- Topics – select certain topics from lists curated by Google
- Placements – target specific websites on the Google Display Network
- Content keywords – keywords that are relevant to your products or services
You can easily control your budget, and start small if necessary with say, $5 per day to see what will work for you. You will only pay when someone takes an action on your ad, such as clicking on it, viewing it or converting, depending on how you set up your campaign.
Finally, Google Ads gives you the tools to plan, test, optimize and report on your ads all from one platform.
What does it cost to advertising on Google Ads?
There is no minimum budget to advertise on Google Ads. In order to calculate your daily budget, you will need to start with two numbers: what your profit per sale and what your current conversion rate.
Your conversion rate can be calculated by dividing the number of conversions you get per the number of people that visit your website. (eg. 10 conversions for every 1,000 people that visit your site is a conversion rate of 1%)
Once you have those two numbers, you need to determine your maximum cost per click — that is, what you are willing to spend per click. To do that, decide what commission Google will receive. If you are ok with giving Google a 30% commission and making only $70 on each sale, you can use this equation:
Max. CPC = your profit x commission for Google x your conversion rate
$0.30 = $100 X 30% x 1%
So essentially you can start out with a budget of $30 per day and expect 100 clicks to your website. Test this budget and see how it generates conversions, then you can decide if you need to increase it.