What is Google Ads? How does Google Ads Work and its Benefits?

Digital advertising helps e-commerce platforms reach as many customers as possible. You have many ways to engage with prospective buyers and drive them to your site; one method that can be particularly effective for e-commerce stores is Google Ads.

What is Google Ads?

AdWords is an advertising system Google developed to help businesses reach online target markets through its search engine platform and partner sites. These partner sites host a text or image ad that appears on the page after a user searches for keywords and phrases related to a business and its products or services. On Google.com, AdWords ads typically appear in specific locations at the top and right-hand side of a search results page.

You can choose keywords related to your brand, products, services and industry for your Google Ads account. When customers search for these phrases, your store’s ad will be served to them. You only pay when a user clicks on your ad and visits your website or calls your business using “click to call.”

Why advertise on Google?

Google is the most used search engine, receiving over 5 billion search queries daily. Not to mention, the Google Adwords platform has been around for nearly two decades, giving it some seniority and authority in paid advertising.

Google is a resource used by people worldwide to ask questions answered with a combination of paid advertisements and organic results.

Need another reason? Your competitors are using Google Ads (and they might even be bidding on your branded terms).

Hundreds of thousands of companies use Google Ads to promote their businesses, which means that even if you’re ranking organically for a search term, your results are being pushed down the page beneath your competitors.

How does Google AdWords Benefit Businesses?

The two main ways Google Ad services can help your online retail business are by improving brand awareness and driving qualified traffic to your site. Other benefits of using AdWords include:

  • Customers associate certain keywords and phrases with your business
  • You can target with AdWords, meaning the ads follow a customer to other Google sites like YouTube and The New York Times – that improves conversion and reduces cost-per-click.
  • You have the flexibility to determine which sites host your ads
  • Focus on your target market by honing in on certain regions and cities
  • AdWords identifies who is searching for your products
  • AdWords reminds customers of what they previously searched for, keeping your brand top of mind
  • AdWords helps you optimize current campaigns and leverage results for improved overall success.
google ads

How Google Ads work

Google Ads operates under a pay-per-click (PPC) model. That means marketers target a specific keyword on Google and make bids on the keyword — competing with others also targeting the keyword.

The bids you make are “maximum bids” — or the maximum you’re willing to pay for an ad.

For example, if your maximum bid is $4 and Google determines that your cost per click is $2, then you get that ad placement! If they determine that it’s more than $4, you do not get the ad placement.

Alternatively, you can set a maximum daily budget for your ad. You’ll never spend more than a specific amount for that ad per day, helping you get a better sense of how much you should budget for your google ads campaign.

Marketers have three options for their bids:

  1. Cost-per-click (CPC). How much you pay when a user clicks on your ad.
  2. Cost-per-mille (CPM). How much you pay per 1000 ad impressions.
  3. Cost-per-engagement (CPE). How much you pay when a user performs a specific action on your ad (signs up for a list, watch a video, etc).

Google then takes the bid amount and pairs it with an assessment of your ad called a Quality Score. According to Google:

“Quality Score is an estimate of the quality of your ads, keywords, and landing pages. Higher quality ads can lead to lower prices and better ad positions.”

The score number is between 1 and 10 — with 10 being the best score. The higher your score is the better you’ll rank and the less you have to spend converting.

Your Quality Score combined with your bid amount creates your Ad Rank — the position your ad will appear in the search results page. And when a user sees the ad and clicks on it, the marketer pays a small fee for that click (thus pay-per-click).

Also Read: How to access Facebook Ads Manager in 2022?

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