What is Google Ads? How does it work?

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Google Ads, formerly known as Google AdWords, is an advertising system where advertisers bid on certain keywords in order for their ads to appear in Google’s search results. Google Ads also includes advertising on Search and Display Networks like YouTube and Partner sites. Google Ads can be an effective way to reach your target audience when they’re in the four moments of consumer behaviour: I-want-to-know, I-want-to-go, I-want-to-do and I-want-to-buy moments.

What is Google Ads?

Google offers pay-per-click (PPC) advertisements that target potential customers or leads that may be interested in a product or service your business has to offer. In a Google Ads campaign, you tell Google how much you want to pay to have them list your ad.
When someone clicks on your ad, you pay the cost-per-click (CPC) based on your budget. Depending on the type of ad campaign, Google Ads can appear in three places: Google’s search results pages, on YouTube, on Google Partner sites and Google Maps.

How does Google Ads Work?

The key to Google Ads is in the Quality Score, which is Google’s rating of the quality and relevance of your keywords, ads, and landing pages. When someone searches for a keyword, an auction takes place where advertisers will bid for ranking to show on the results page.

Once your campaign is running you can see the quality score of each campaign. This helps when bidding on a keyword in Google Ads when determining what keywords you want to bid on and rank for. The Quality Score is based on an estimate of the quality of your ads, expected click-through rate, ad relevance, and the overall landing page experience.

There are three main factors in the ad auction that determines which ads appear and in what order. First is your bid, which tells Google Ads how much you want to spend for a single click on your ad.

Second, Google Ads looks at the quality of your ads and how relevant and useful they are to the person who is searching.

Third, Google looks at the expected click-through rate impact from ad formats you use. When you create an ad, you can include additional information about your business like a phone number, business address or other links to your website.

Keyword Match Types

Broad Match

Broad match is the default setting for keywords and helps to reach the widest possible audience. Your ad will appear whenever a search query includes any of the words in your key phrase, no matter what order. Ads with broad match keywords might appear when someone searches for irrelevant topics. For example, if your broad keyword is “hats”, your ad might show for searches on “hats”, “sun hats”, or “winter hats”, when you only sell baseball hats.

Modified Broad Match

Modified broad match is in between broad match and other restrictive match types. It still allows you to reach a wide audience, but it gives you better control over who will see your ad. With modified broad match you can choose the keywords that must appear in a search query.

Phrase Match

Phrase match offers a higher level of control compared to broad match. Your ad only appears when a user searches using your keywords in the exact order you have added them to Google Ads. Keep in mind that searches may include other words either before or after the keyword phrase.

Exact Match

Exact match keywords are the most specific match types. Your ad may show when users search the exact term or a close variation of that term. Exact match keywords may be difficult to correctly choose but can attract customers with strong purchase intent.

Why advertise with Google Ads?

With over 3.8 billion searches a day and 75% of the search engine market share Google can be an ideal partner in helping to grow your business. Google has a massive reach beyond just its search page. It includes all Google Partner sites along with online video giant, YouTube, and Gmail. Google Ads also provides a wide range of capabilities to target specific demographics allowing for full control of your campaigns.

Budget Control

With cost-per-click bidding, you have full control over how much you want to spend for every click on your ad. You tell Google the maximum amount you’re willing to pay, and you can change your bid amount at any time.

You can also set the average amount you want to spend each day. On days where your ad may produce more clicks, Google Ads will cap your average daily budget at 20% more. You also only get charged when someone interested clicks on your ad.


Google Ads is flexible because it has customizable options for your campaigns to target people with specific interests, especially people who are interested in your products or services. Google Ads allows you to select specific words or phrases that are relevant to your product and service and to customers’ searches.

You can also include ad extensions that show more information about your business like address (geographical location) and phone number among other extensions. With Google Ads, you can also specifically target your audience by selecting the age, location, and language of your customers.


With Google Ads, it is easy to see how your ads are performing. If someone clicks on your ad and does something valuable for your business, it can be tracked. By seeing which ads earn clicks and which ones don’t, you can quickly gauge which campaigns are working and which aren’t. You can then adjust what campaigns to invest in more.

If working with a digital marketing agency, they would and should also have the ability to record phone calls to measure the quality of leads coming through the ad clicks.

Impressions are free

Even if you’re not getting the number of clicks you want, your brand and business still are gaining visibility and awareness. You’re getting your name out there and it can become recognizable. If you get 1,000 impressions for an ad but only 10 clicks, you’re only paying for those clicks. While impressions are not the ultimate way to track how well your ad is performing, it is a useful metric to consider your success.

Types of Google Ads Campaigns

Search Network Campaign

The Google Search Network is a group of search-related websites and apps that can display your ads. When advertising through the Search Network, your ads can be displayed on Google search sites like Google Maps, Google Images, Google Shopping, and Google Play.

Your ad can appear above or below the organic search results within the top or bottom 3 of the search results. The types of ads that appear on the Search Network are text ads, shopping ads and images, and video ads.

Display Network Campaign

The Google Display Network integrates your ads within carefully chosen websites that are relevant to your ad and business. Display Network ads do not require a search and are displayed on other websites while users are visiting another website. The Display Network uses targeting options to strategically place your ads to potential customers at the right time and place.

Types of Display Network Ads

Responsive Display Ads

Responsive display ads automatically adjust their size and appearance in order to fit any available ad space. Creating a responsive display ad is as simple as uploading images, headlines, logos, videos, and descriptions, and Google will automatically generate ads that will be shown on the Display Network.

Engagement Ads

Engagement ads are ads that are shown on the Google Display Network. These ads allow advertisers to use rich media that lets your customers engage with your ads. Engagement ads come in the form of Lightbox ads where people can click, tap or hover over the ad. Lightbox ads may expand to fill the screen, display videos or allow people to tap through a set of images.

Gmail Ads

Gmail ads are interactive ads that show in the Promotions and Social tabs of your email inbox. Depending on the ad, once you click on it, it may expand like an email to show images, a video or embedded forms. Gmail ads use a more formal way of connecting you with potential customers.

Types of Targeting

On the Google Display Network, you can reach a wider range of customers by choosing different targeting methods. Targeting methods determine where your ads can show and who can seem them. Targeting methods include placement targeting and topic targeting.


Placements are a targeting method that allows you to choose the websites where you want your ads to appear. You can either choose a single website, multiple websites or pages you want your ad to show. A managed placement target is the most direct and specific way to target a website.


Topic targeting allows you to reach a wider audience by selecting content topics that are relevant to the products or services you offer. Your ads can reach people interested in content who may also be interested in what you are selling. By selecting certain topics, your ads will show on websites on the Display Network or YouTube that have content related to your chosen topics.

Shopping Campaign

Shopping campaigns are most effective for companies who have an ecommerce or brick and mortar store. You can use Shopping ads to promote your online or local inventory and even boost foot traffic to your store. Shopping campaigns use Google’s Merchant Center to send product information to create campaigns.

Shopping ads are more than a text ad because they show users a picture of the product and other information like price, store name and more. This gives potential customers the necessary information to make an informed decision before purchasing a product.

Types of Shopping Ads

Product Shopping Ads

Product Shopping ads give you the opportunity to include an image, price and business name inside the ads. The information of the product comes from the data given to Google.

This type of ad is the most common ad you’ll see when you search for a product. These ads appear on the side of the search results page.

Showcase Shopping Ads

Showcase Shopping Ads allow you to group together related products and showcase them together. These types of ads help to introduce your business to customers and is mostly used for more general keywords like “shoes” or “backpacks”.

This type of ad focuses on searches that use broader terms and usually mean that a person hasn’t decided which brand to buy from. Showcase Shopping ads provide an opportunity to reach potential customers to create awareness about your brand and products while they are still making a decision.

Local Catalog Ads

New to Google Ads, a local catalog ad is a mobile display that is highly visual ads that are easy to look through.

Local catalog ads are targeted for shoppers who are looking to see the products a merchant has to sell. The ads will showcase product images, price, name, and in-store inventory. The purpose of these ads is to produce more in-store traffic.

Video Campaign

Video campaigns are video ads that are placed within video content on YouTube and the Google Display Network. Video ad formats include in-stream ads, video discover ads, outstream ads, non-skippable in-stream ads, and bumper ads.

In-stream ads play before during or after videos on YouTube and other Display Network sites. This type of ad can be skipped after 5 seconds. Video discovery ads appear on YouTube when someone is searching for video content.

Outstream ads are used for mobile advertisements and play on partner websites. They appear in banners, before or after an expected content page and in-feed on apps.

App Campaign

App campaigns are a way to promote your app across Google Search, Google Play, YouTube and the Google Display Network. An app campaign is an automated campaign type that looks to promote installations of the app and in-app conversions. App campaigns are created by Google, all you need to do is include your text ideas and assets and Google will design a variety of ads.

Ad Extensions

Extensions are important in optimizing your ads as they offer a competitive advantage in improving the performance of your ad. Ad extensions typically increase an ad’s click-through-rate because it offers decisive information to learn more about a product or service to make a purchase. Ad extensions are included in an ad if Google predicts the extension will improve your performance or when your Ad Rank and ad’s position is high enough for an extension to show. Google Ads offers 9 different ad extensions:

Location Extensions

Location extensions help to boost in-store foot traffic by showing your location, a call button and a link to your business information like store hours, directions and photos. When someone is nearby and searches using a keyword, location extensions become likely to show.

Affiliate Location Extensions

If you sell products through retail chains, this extension can help customers find your products at nearby stores. Affiliate extensions can be used by manufacturers who sell products through major retailers.

Callout Extensions

This extension allows you to add additional text that helps to promote unique offers to customers like free shipping or 24-hour customer support. Callouts will show in a variety of ways depending on searches, devices and other factors.

Call Extensions

Call extensions encourages people to call your business by adding your phone number or a call button to your ads. When people see your add, they can just click or tap to call your business directly. This leads to more customer engagement and more chances to track conversions.

Message Extensions

Similar to call extensions, this allows potential customers to send text messages right from your ad. People on mobile devices can use this to book an appointment, get a quote or request information. This is another convenient option for people to reach your business.

Sitelink Extensions

Sitelink extensions are links that direct people to specific pages of your website. Sitelinks take users directly to pages that matter the most based on their search like store hours, a specific product page or a contact page. Depending on the device, ad position, and other factors, different sitelinks can be shown.

Structured Snippet Extensions

This allows you to highlight certain aspects of the product or service you are advertising. Structured snippets will show beneath a text ad and use a header as a main topic and a list of values as things you offer. For example, if you’re advertising for a bed and breakfast, your values could include some amenities like a gym, pool, or free Wi-Fi.

Price Extensions

Price extensions offers more of a showcase of your products or services by including the prices of what you offer. People can look at your products or services right from your ad and can directly visit the product page by clicking the extension.

App Extensions

App extensions encourages people to download your app by linking to your mobile tablet app from a text ad. When someone clicks on your ad, they will be taken to the app’s description on Google Play or the Apple App Store. Clicking on the headline of the ad will also lead people to your website.

Device Targeting

For Display and Video campaigns, you can target specific devices, device models and operating systems. This gives you the flexibility to adjust target bidding for different desktop computers, mobile phones and tablets depending on whether it is an Android or Apple device.

This works well if you’re selling a product that is specific to the device you’re advertising to. Let’s say you sell mobile phone cases for Device A. With device targeting, you can create a message in your ad that is more focused and tailored to people who use Device A.

Related Content: What is the Google Merchant Center?

Bidding Strategies

Google Ads offers many bidding strategies depending on the goal of your ad. Your ad campaign can get results by focusing on conversions, cost-per-clicks or impressions. Each ad objective offers many strategies to maximize your need as an advertiser.

Conversion Bidding

If you want to focus on conversions, Google has four Smart Bidding strategies you can use. Smart Bidding is a set of automated bidding strategies that use machine learning to optimize for conversions.

Target CPA

Target CPA (cost per acquisition) is the average amount you want to pay for a conversion. Target CPA is an automated bid strategy where you can increase conversions by targeting a specific cost-per-action. Google adjusts bids based on generating as many conversions as possible at your set amount.

Target ROAS

Target ROAS (return on ad spend) is like Target CPA but it focuses on getting the most value for your conversions. This is an automated bidding strategy where your bid will be automatically adjusted according to your campaign type.

Maximize Conversions

Maximize conversions will set your bids to help you get the most conversions for your ads. This type of bidding uses the maximum amount of your daily budget. Maximize conversions uses automated bidding which means there are no specific keyword bids that you can set. Google will choose a CPC bid based on the goal of the strategy.

Enhanced CPC

Enhanced CPC is similar to manual bidding except that you can make adjustments to the manual keyword bid. Based on a keyword’s chance of a click, Google Ads will increase or decrease the bid as needed to convert.

CPC Bidding

CPC bidding is perfect if you’re looking to increase clicks to generate more traffic to your website. Google Ads offers two cost-per-click strategies; automated bidding and manual bidding.

Maximize Clicks

Automated bidding focuses on setting up your bids to maximize the number of clicks. You can set a cap on bids that lets you control the maximum amount you’re willing to spend for each click. Google automatically adjusts your bids to earn as many clicks as possible while spending your daily budget.

Manual Bidding

Manual bidding allows you to control everything about your bids. You are in control over the maximum cost-per-click bids. You can also manually control how much you want to allocate for keywords or campaigns that are more successful than others.

Impressions Bidding

If you’re looking to improve on overall impressions of your ads and brand, Google Ads has 4 different impressions strategies to help maximize your visibility. Advertisers still pay based on clicks.

Target Search Page Location

Target search page location bidding is an automated bidding strategy that automatically raises or lowers your bids to increase the chances of your ad will appear at the top of the search results or on the first page.

Target Outranking Share

Target outranking share is another automated bidding strategy. This bidding strategy allows you to choose a specific website (a competitor) you want to outrank. As a result, your ad would be displayed above the target domain’s ad or will show when that domain’s ad does not. You have control over how often you want to outrank a website, and Google Ads will set your bids to meet the target.

Cost-per-thousand Impressions (CPM)

This bidding strategy is paid based on the number of impressions times the amount your ads are shown. This type of bidding strategy is for ads showing on YouTube or across the Google Display Network. In this instance, you pay the market rate based on CPM.

Cost-per-thousand Viewable Impressions (vCPM)

If you care more about your ads getting views rather than earning clicks or engagement, this bidding strategy is for you. vCPM is designed for ads that want to focus on increasing brand awareness and visibility. vCPM is a manual bidding strategy where you can set the highest amount you want to pay for each 1,000 impressions for your ad appearing on the Google Display Network.


Google has such an extensive reach and authority that people trust. If you are planning to use paid advertising or already do, there is no reason why Google Ads shouldn’t be a part of your marketing strategy. With the flexibility of campaigns and bidding strategies, a controllable budget and laser-like targeting, Google Ads can be an effective way to increase your brand awareness, engagement or conversions through your website or physical store location.

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