What is Google AdWords?

What is AdWords? Google AdWords is Google’s advertising system in which advertisers bid on certain keywords in order for their clickable ads to appear in Google’s search results. Since advertisers have to pay for these clicks, this is how Google makes money from search. This infographic will help you understand how AdWords works, detailing the AdWords auction, bidding process and explaining important factors like Quality Score and cost-per-click. If you’re asking “How does AdWords Work?” this infographic is for you!

The top 4 listings are labeled with "ad", They are running through Google Adword System

Does AdWords work?

Does Google AdWords work? Depending on the competitiveness of the keywords you’re bidding for and the relevancy of that keyword to real conversions for your company, AdWords may or may not work for your business. For the most part, we’ve found that Google AdWords is extremely effective for many kinds of businesses, as long as they don’t waste their money on the wrong keywords, or write weak, low CTR ads.

How much does Google AdWords cost?

Many factors can affect the costs of AdWords advertising for your business. Learn all about these costs, how bidding works, and the average cost per click for advertisers in our guide to “How Much Does AdWords Cost?”

How to advertise with Google AdWords

How does AdWords bidding work?

The actual position of your ad is determined by your ad rank (Maximum Bid times Quality Score). The highest ad rank gets the 1st ad position. Your actual CPC will be determined by the ad rank of the next highest ad below you divided by your Quality Score. The only exception of this rule is when you are the only bidder or the lowest bid in the AdWords auction; then you pay your maximum bid per click! AdWords bidding heavily penalizes advertisers who bid with low quality scores. Conversely, those with high Quality Scores get higher ad ranks and lower CPC.

What is CPC?

CPC, or cost per click, is the amount an advertiser pays each time someone clicks on their AdWords ad.

What is Google Quality Score?

This is a metric Google uses to determine how relevant and useful your ad is to the user, based primarily on your ad’s CTR, keyword relevance, and the quality of your landing page. The higher your Quality Score, the better: high Quality Score keywords will save you money and earn you better ad rankings.

What is Google ad rank?

Google ad rank is the position of the company’s advertisement on the search engine page based on a combination of the company’s maximum bid and quality score

What is ad position in AdWords?

Ad position is the position on the search engine page results where the advertisement appears in relation to all of the other advertisements.

What are AdWords keywords?

Keywords in AdWords are the words and phrases that advertisers bid on, in hopes that their advertisements will appear on the search engine results page (SERP) when people are searching for those products or services. For example, if you sell shoes online, you might bid on keywords like “Nike sneakers” and “penny loafers.” Keyword research is the process of using tools and data to determine which keywords are most likely to drive relevant traffic to your ads and your site.

Google Adword Illustration from Wordstream