Google AdWords is a well-known advertising platform for businesses as it enables you to list your advertisements on the front page of Google overnight. Even if it may seems “easier” to run your advertising campaigns on Google AdWords, you should know that a bidding procedure exists on the platform. Thus, an advertisement will not necessarily appear on Google’s front page if the price you paid is not high enough.
To understand exactly what AdWords is, especially as it relates to search networks, it is important to understand the following three aspects:
1.The bidding system
2.The distribution of advertisements
3.The cost of an advertisement
Online bidding system
Diffusing your advertisements on Google AdWords obviously comes at a cost (unless you get “Ad Grants“). Google has set up an online auction system, which puts businesses that bet on the same keywords in competition with each other.
Let’s say you’re a florist in Montreal and you want your ad to be published on Google when a user searches the term: “Montreal florist.” In order to have a chance of appearing on the search engine, it is important that you bet on that keyword by adding it to your list of keywords on Google Adwords and writing an ad related to those keywords. You do not have to write an ad for each keyword you bet on (this would just make too many ads) but it is important to remain consistent between your keywords and your ad to so that you encourage users to click on your link.
The amount you are going to bet on that keyword specifies the maximum amount you are willing to pay for each click that’s generated by that keyword. This amount is called the “cost per click” (CPC) in the field of web advertising.
The chosen CPC is essential because if you set a CPC at $ 1.86 while your competitors are betting at least $ 2.51, your Google AdWords ad will probably not appear on the first page.
Google’s advertising platform is an online auction system, highlighting the competition of companies with keywords that users search for specific services.
Distribution of ads on Google AdWords
After understanding the role of the CPC on AdWords, it is important to know that to bet $ 2.51 for the keyword “Montreal florist” will not allow you to automatically get the top spot on Google.
The CPC is only one factor that determines the overall position of your ads. Google also takes into account other criteria (detailed below) to assess the quality of your ad.
The quality score is a second important factor that will determine the distribution of advertisements. The quality level is a score out of 10 that is given to each of your keywords on your Google AdWords account.
The rating scale is determined by three elements: the expected click-through rate, relevance of the keyword and the landing page.
Expected click-through rates
The expected click-through rate is a percentage determining the probability that clicks are registered thanks your keyword. To measure the click-through rate, the performance of that keyword as well as positioning of your ads will be taken into account.
Relevance of keywords
For Google to consider your keyword relevant to your ad and your website, it is important to gather similar keyword in the same ad group. For example, you might create the following ad groups:
- Montreal florist with the keywords: “Montreal florists”, “florist in Montreal” and “search florists Montreal”
- Bouquets with the keywords “buy bouquets” and “send a bouquet”
Also, your keywords will be even more relevant if these terms are included in the ad’s text as well. Google AdWords will understand that your ads are relevant to users searching for “Montreal florist,” then Internet users will find the following advertisement for example:
After clicking on an ad, it is important that users are directed to a landing page that matches their expectations. If users reach a page about maintaining a garden, Google will not think that your page is relevant to the keywords initially entered by the user. Thus, your quality score will be affected, as will the positioning of ads.
The CPC, the level of quality and the use of ad extensions determine the ad’s positioning. This is why it is important not only bet on a high CPC, as the quality and proper use of ad extensions are key factors for the distribution of good ad placement.
The cost of advertisement
The cost per click, the determined quality score and the position of an ad also have an impact on the cost of an ad on Google AdWords. Even if a CPC is determined ahead of time, you should know that you probably will not end up pay that price for a click.
It should be understood that the final CPC will be calculated based on the auction of your competitors. If your maximum CPC is $ 2.51 and your competitor coming second has a CPC of $ 2.32, you only have to pay one cent more than him. Thus, your CPC will be $ 2.33 even if you had bet $ 2.51.
You could spend a higher amount than your maximum CPC only if you use bid adjustments or enhanced cost-per-click that can increase your cost per click by up to 30%.
Google AdWords lets businesses bid on keywords used to advertise on the famous search engine. However, in order not to lose money in advertising on Google (which represents 90% of search engine’s total income in 2016!); it is important to understand the operation of the platform and to avoid typical errors when creating your Google AdWords campaign.