Google Adwords is a fantastic medium to grow your online presence and increase brand awareness. Google is the search engine giant that fuels the internet. So, it only stands to reason that using their services puts your business front and center. Over ninety-seven percent of Google’s massive revenue stream comes from Adwords customers. This alone should tell you that it works. Adwords customers use high-quality content and SEO-friendly web pages to show at the top of the SERPs. Many different strategies and best practices have emerged over the years to help you use Adwords to drive traffic. However, this article will focus on how Google Adwords works. You can’t develop strategies relevant to your company’s marketing campaign unless you really understand how Google Adwords works.
CPC Bidding System
Google Adwords is a cost-per-click bidding system. It is different than a traditional bidding system because Google’s system prioritizes ad relevance and quality. This means that the highest bid doesn’t always win the auction. Companies are incentivized to create fantastic ads full of great content by paying less for a more prominent position. For instance, a vitamin company with a fabulous high-quality ad will be rewarded with a high position. Additionally, they will pay only one dollar per click. A competitor with a lower quality ad will be featured less and charged more. Google has created a highly competitive environment that rewards quality and relevance. Lower quality ads pay more for lower rankings.
Google’s Super-Fast Auction
When a visitor types in a search term, Google runs an auction that is over before you snap your fingers. Each advertiser bids on keywords that are relevant to their topic. They also set a maximum price they are willing to pay. Ad relevancy, ad quality, and overall cost help determine a business’s position. Google multiplies a company’s maximum bid by their ad quality to determine their overall quality score. The ad quality is determined in real time and is based on a few key elements. A company’s expected click-thru-rate, the ad relevancy to the query and the expected landing page experience are key factors. These key factors determine a company’s quality score. This means a business owner can easily adjust their maximum bid. They must work a little harder to improve their quality score which helps level the playing field.
Every company’s quality score is based on a ten-point scale, and it is specific to Google. Since ad quality is determined in real time, the score changes with every auction. Your ad value is based on the relevance to the query, the click-thru rate, and the expected landing page experience. You can track your quality score and try using different strategies to improve it.
Payment Per Ad
The concept of Google Adwords is pretty simple once you break it down. However, payment is a little more complex. Google bases the rate you pay per ad on two key elements. These factors are your quality score and the quality score of the ad below you. They divide the ranking of the business below you by your quality score and then ad one penny to get your cost per ad. Let’s say your quality score is ten and the ad below yours has a quality score of twenty-five. This makes your cost per ad two-dollars and fifty-one cents. Your cost per ad may be less than the competitor below you. Even so, Google is betting that your ad will be clicked on more often. They are assuming you will pay the same or more than your competitors.
Google Adwords is a fantastic and effective marketing tactic for most businesses. If you understand the fundamentals, you can easily use it to drive convertible traffic. Learn all about how Google Adwords works to drive leads to your business so you can use it effectively.
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