What Are Google Ads & How to Create an Effective Campaign

Consumers are more mobile than ever, and they use their smartphones and other connected devices to research and shop for products and services. Every day, the Google search engine produces results for over 3.5 billion searches. Reaching those customers requires digital marketing tools and strategies like Google Ads. The potential for success is high with these campaigns, but marketers have to be careful because there’s also a chance they’ll lose money and waste their time.

What is Google Ads (formerly AdWords)?

At its core, Google Ads is simply a pay-per-click (PPC) advertising platform. There are two ways that advertisers can reach people through the platform. Ads are either shown through the Google Search Network, or through the Google Display Network.

Google Search Network

When a business purchases ads on the Google Search Network, they are displayed as text ads that appear both at the top and along the right side of search results. They are marked with a tag that says “Ad” next to the website’s URL. These ads are a good way to capture the attention of customers who are in the research and purchasing stages of the buyer’s journey.

Google Display Network

Ads purchased through the Google Display Network are called display ads, or sometimes banner ads. They appear on websites that are most likely to be visited by the target audience. Unlike search network ads, these ads aren’t targeted to users who are searching for a particular product or service. They can be an effective means of attracting buyers at every stage of the buyer’s journey.

How Do Google Ads Work?

Google Ads is an auction-style advertising platform. Whenever a term, or keyword, is searched for, Google fulfills the request and an auction for the keywords is begun. Literally billions of auctions are run every month. Advertisers place bids for specific keywords in an attempt to get their ads to appear prominently on Google’s search results page or within the display network. The results of the auction determine each advertiser’s ad placement as well as their cost-per-click (CPC).

What is CPC and How Is It Calculated?

CPC is an important factor when purchasing paid ads through a platform like Google Ads. This is the amount an advertiser has to pay every time a user clicks on one of their Google Adwords ads. It’s determined by three key factors; the advertiser’s Quality Score, how competitive the keywords are, and the maximum bid amount.

Google Quality Score

Google ranks the quality of advertisers’ landing pages, ads, and keywords on a scale of 1 – 10. Google Quality Scores are based on the landing page experience, relevance of ads, and click-through rates (CTR) for keywords. The more relevant a landing page or ad is, the higher it will score. A higher score, in turn, translates to a lower CPC and better ad positioning.

Keyword Competitiveness

Search engine marketing is focused on keywords that are likely to be used by users to search for a product or service. The more competition there is for a specific keyword, the higher the cost-per-click. However, long-tail keywords are often less competitive and therefore, less costly. Google also looks at the relevance of the keyword within the ad and subsequent landing pages.

Maximum Bid Amount

The position an ad acquires is determined by its Google Ad Rank which is the maximum bid amount multiplied by the Quality Score. The ad that ranks highest is rewarded with the top ad position, and lower ranking ads are listed accordingly. There is one exception, however. If an advertiser is the sole bidder, or the lowest bid, they pay the maximum bid amount per click.

Tips for More Effective Google Ads Campaigns

Once you understand how Google Ads works, you’re ready to begin creating ad campaigns. Here are a few tips to help you create more effective and productive ads.


Plan Well

All great ad campaigns begin with an idea. Over time, that idea becomes a plan for reaching prospects and customers over the long run. Take the time to thoroughly develop a long-term plan for success rather than rushing in. Remember that a well-thought-out plan will help minimize risks and costs and also maximizes the potential for profit in the future.

  • Specify one product or service to sell.
  • Determine the customer acquisition cost.
  • Get an estimate of the CPC rate you can afford.
  • Set a loose budget to test your ad campaign.

In-Depth Research

Once you have a good idea what direction you want to take your Google Ads in and how much you can feasibly spend, it’s time to put some time into serious research. Analyze everything from who your target customers are to the keywords they’ll likely use and what the competition is doing. The more information you have, the better you can plan for and execute your Google Ads campaigns.

  • Specify your target customers.
  • Create a potential keyword list using Google Keywords tool.
  • Discover your competitors’ keywords.
  • Analyze the competition’s offer structure.
  • Finalize your test keyword ad budget.

Landing Pages

Each of your Google Ads campaigns should point to a specific web page, called a landing page, that details the offer and provides a compelling call-to-action. A well-crafted landing page can have a considerable impact on conversion rates, encouraging visitors to take the next step. In fact, landing pages are considered one of the most important aspects of online advertising.

  • Create dedicated landing pages for each campaign.
  • Craft an attention-getting, compelling headline.
  • Limit navigation options and other distractions.
  • Create an offer that is too good to pass up.
  • Add testimonials, endorsements, and media mentions.

Tracking and Analytics

Investing in paid ads can be a tricky endeavor. You know you need to spend money to make money, but you have to be careful. In order to maximize your return on investment (ROI) your ads have to generate leads and ultimately sales. The only way to know how effective your Google Ads campaigns are is by tracking lead generation, conversions, and sales. If you miss this important step, you’re wasting time and you’re likely wasting money, too.

  • Use Google AdWords tools for conversion tracking.
  • Track sales and conversions with customer relationship management (CRM) tools.
  • Determine the metrics you’ll track. For example, sales conversion rates, revenue, or profit per click.
  • Adjust your campaigns to improve the metrics you’re most concerned with.


Marketing with Google Ads can help to propel a business by raising brand awareness and attracting new customers. In order to succeed, however, businesses must carefully evaluate their advertisements, landing pages, and keyword choices. They then have to evaluate their budgets and set realistic maximum bids on their chosen keywords to ensure a high CTR and a return on their investment.