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Pay Per Click Advertising

A Fundamental Guide to Google Ads for 2020

07.07.2020

If you are a beginner and looking for a guide to teach you the fundamentals and inner-workings of Google Ads, you have come to the right place!

Aziz Hamidov

Content Manager

15 min read

google ads

Google Ads is one of the most powerful marketing tools on the web, allowing businesses and individuals to reach new heights. Investing in Google Ads has proven to be a great way to get brand awareness and boost sales revenue. According to Google Economic Impact Report, on average, businesses make $2 in revenue for every $1 they spend; that's twice as much! 

If you are a beginner and looking for a guide to teach you the fundamentals and inner-workings of Google Ads, you have come to the right place!

This guide will capture all the steps you need to take to create and manage ad campaigns. First, we will introduce you to the idea of paid search and how it is different from organic search. We will then explain how paid advertising works and what goes into a powerful ad campaign. By the end of this article, you will be able to create, run, track, and optimize your ad campaigns. Let's get started!

 

Paid vs. Organic Search

Over 90% of web traffic comes from search engines. That's the primary destination people head to when they are looking for a specific product, service, or information in general. The search engine's job is to list the most relevant results based on users' search queries. Businesses with a high reputation in their respective industries enjoy the first pages of Google and get lots of organic traffic. They never paid to appear on the number #1 spot; Google chose them because they are offering real value to their visitors, and everybody is talking about them. This is basically how organic search works if we were to oversimplify SEO into a few sentences.

What about businesses new to the industry, or those having a hard time ranking on Google's organic search results? That's where paid search or PPC (pay-per-click) advertising comes in! It's a powerful tool and can make your business tons of sales if adequately used.

Google Ads will allow you to appear on the first pages of search results even if you are new in the business and haven't established your online presence yet. Simply put, you create your Ad on Google, and when people search for something related to your products or services, your ad gets served. You pay for every time a person clicks on your ad and goes to your website. Simple, right? 

Let us show you how it looks like:

Google SERP example

As you can see from the example above, Paid Results appear on the very top and can be easily distinguished from organic results with their small Ad icons to their left.

 

Google Search & Display Network

The picture you have seen above is a perfect example of an ad on Google Search Network. It allows you to appear on Google's search results based on a particular set of keywords. However, Google's PPC advertising does not end there! Google is partnering with over 2 million websites and apps on the internet that agree to display ads provided by Google. 

You must have seen Display Ads on various websites you visit. The pool of partners is so large that it is impossible to miss if you are on the internet regularly. Here's an example to refresh your memory:

display network

As you can see from the second example, display ads appear on parts of webpages and are usually in the form of photos or videos.

When it comes to the most significant difference between these two, Search Ads have considerably higher conversion rates compared to Display Ads. This is primarily because Search Ads are highly targeted and only appear when people are searching for it. This is not the case with Display Ads, which usually appear based on the previous behaviors of a user on random webpages.

However, Display Ads come with their own advantages. Besides being considerably cheaper than Search Ads, Display Ads are an excellent tool for getting brand recognition by showing it to the maximum number of people with a minimum budget.

 

How to Setup Google Ads Account?

The first step in advertising on Google starts with opening up an account, well, unless you already have one. Just go straight to ads.google.com to get started.

The process of setting up an Ad account is pretty straightforward. Now, there are two modes to Google Ads accounts: Smart Mode and Expert Mode. While Smart Mode is a good option for beginners, or people who don't want to spend too much time on it, Expert Mode provides you with dozens of more tools to better manage your campaigns.

The default mode is Smart, and at the very beginning of a setup process, you will have an option to switch to an Expert mode. If you don't feel like dealing with lots of metrics right from the start, you may continue with the default mode and switch to Expert mode later on.

In this guide, we are covering some fundamental concepts present in Expert mode only, so you can get essential knowledge of working with advanced tools and metrics.

 

Location Targeting

Selecting a geographical location that you will be targeting is one of the earliest choices you get when setting up your Ad campaign. If you are an online store, shipping products nationwide, it would make sense to target the whole country. Based on the data you have collected, you may want to narrow it down and focus on better-performing locations to sell more units of products per $ spent on your ads.

However, if you are a local shop, your best option would be to target a small radius around your shop and target people in your area.

 

Scheduling the Ad

For evergreen campaigns that you run, it is not necessary to set an end date. Though, for those of you who run specific campaigns for the period of promotions, it is better to go live on some days and stop whenever the promotion expires. 

 

Keywords

A Keyword is a term that you decide to bid on while using Google Ads. To bid on those keywords, you need first to find them. The best places and platforms to find great keywords are:

  • Client website (For those of you who would provide this service to others)
  • Google Keyword Planner
  • SpyFu, SEMRush, Ahrefs, or such competitive analysis tools.
  • The search term report that is provided by Google Ads

Google has three match types, which helps you give instructions on how you want your Ads to be found. They are Broad matchPhrase match, and Exact match

Don't worry though; it's easier than it sounds! We'll get into it right away.

keyword match types

 

Exact Match

Say you are selling gaming laptops and choose the keyword 'black gaming laptops' for your Ad. Now, if you set the keyword to exact match, your ads would only appear if people typed in the exact same thing or a very close variation. In such a case, your Ads won't be displayed if someone searches for 'cheap black gaming laptops' or 'affordable laptops for gaming' because they either include additional words or don't have all the terms specified by you.

The upside of setting an exact match is that you will be targeting people looking for an exact product or service. However, this limits your reach and eventually gets less traffic to your website because others might be looking for the same thing with different keyword variations that you haven't included.

 

Phrase

Phrase match is similar to an exact match; however, it lets people add words to the set keyword. For example, if you set the keyword 'slim gaming laptops' to phrase match, your Ads will be found when searched for 'slim gaming laptops under $1000'. However, they won't be found if the order of your set keyword was to change. In this case, 'slim laptops for casual gaming'  will not trigger your ad.

 

Broad

For example, if your keyword 'slim gaming laptops' is set to Broad match, Google can serve your Ad for search queries of 'small laptops,' 'laptops for games,' 'gaming computers,' and so on. Now you can see how setting your keywords to broad match can open up your business to more people. Since it is not the best practice to always use Broad match and get lots of traffic, it is a good way to explore new search terms and see what performs the best.

 

Negative Keywords

Additional to the three match types mentioned above, Google also allows you to enter specific words or phrases as Negative keywords. In this case, when people type in any of those negative keywords when searching, your ads simply won't appear. This is a handy feature as it allows you to refine your strategy further. 

For example, say you are selling all brand new gaming laptops, again, for hefty prices. You may want to add the words 'used' or 'cheap' as negative keywords to avoid people who are looking for cheaper options.

 

Ad Group Strategy

Time to learn how to make a tidy account structure! Let's give an introduction to Ad Groups first. Ad Groups are used to group together all the keywords of an Ad. Let me explain it with an example.

Say you have a clothing shop, and you are selling various clothes at your online store. You have created two campaigns in your account called "Footwear campaign" and "Upper-body campaign," where you will be selling shoes and upper-body clothes. Look at the picture below to get a better idea.

ad groups

 Source: Google Ads Help 

Now, you want to create two separate Ads in your footwear campaign - one featuring sneakers, the other selling boots! So you create an Ad Group for each of them (called "Sneakers" and "Boots"), add the keywords, and create Ads for each of those Ad Groups.

Let's show you how an ad of "Sneakers" Ad Group would look like:

Google Ads

This Ad will be triggered when people search for keywords such as "running shoes" or "sport shoes."

You will then create two other Ads for your "Boots" and "Shirts" targeting the keywords specified in the chart.

 

Pay-Per-Click Bidding

Here we come to the important part. So how much do you pay for each click? Google does not set fixed prices for its keywords; instead, they use an auction-style bidding model to price each click. Just like everybody else, you will set a maximum price that you are willing to pay for each click on your ad. Let's show you an example. 

Google Ads

Let's say we have the highest bidder who put a price of $4.00 per click. The second bidder happens to be YOU, with $3.50 per click. The remaining two advertisers bid at $3.20 and $2.70.

However, that's not the amount advertisers actually pay. The bid of the lowest bidder is being taken as a base price for each click. Then each spot going up in value is being priced $0.05 higher as shown in the example below:

Google Ads Bidding Strategies

In this case, you end up paying only $2.80 per click even though you bid at $3.50, whereas the top bidder pays $2.85 despite bidding at $4.00.

 

What is Retargeting? 

Remarketing or retargeting is a term that refers to the act of sending another marketing message for those users who previously interacted with your campaign but have not converted or purchased yet. It is a second chance call that can help you with driving the sale. 

Have you ever visited a company's website without purchasing anything and then got Ads about that company's products? Exactly! Marketers all over the web are trying to retarget those visitors to gain more trust and recognition to convert casual browsers into buying customers.

 

Writing the Ads

After you completed all the mentioned steps successfully, now you can start writing your ads. There are vital points that you need to keep in mind during this process.

 

What are those?

  • You need to include keywords in these texts
  • If you are local to the area in which you are going to advertise the products and services, mention this
  • Try to include your value propositions and aspects that sets you apart from the competitors
  • It is always best to speak the audience's language which means the usage of daily phrases that most of us use
  • Try to be casual and use phrases such as you, your, etc.
  • Use more specific lines. Instead of "Big sale will happen today," you need to use "50% off if you order the products in 24 hours."
  • Always include CTA in both ad text and landing pages.

 

Building Landing Pages for your Ad Campaign

Landing pages play a crucial role in converting your visitors into customers. Once people click on your Ad, they directly go to your landing page or web page that you have created. Now that you have already paid Google for that click or piece of traffic, it is now the sole responsibility of your landing page to make the sale! 

So what are the things you need to focus on while creating a landing page?

Your landing page should perfectly align with your Ad. The same promise that you have made on your Ad copy must be fulfilled on your landing page. This means that after clicking your Ad, people should not be confused about their next step of action.

Say you are providing financial audit services. When a business owner clicks your ad, he or she should immediately see some sort of call-to-action. That can be a button for filling out a form, a phone number, or an email address to contact you.

This is obviously one of the many things that you should be focusing on while creating a web page for your ad, and it is certainly beyond the scope of this small guide. Check the web for hundreds of materials or hire a professional web developer to do the job!

 

Quality Score

By hovering the mouse on the quality score metric in your business's Google Ads account, you will see a chart that rates the ad from 1 to 10. Ten is the best score that you can get, while lower than five can be an indication of poor targeting.

The quality score is determined by three values: Expected CTRContextual Relevance, and Landing Page Experience.

#1 Expected CTR

CTR or click-through rate refers to the number of clicks per one hundred impressions. Higher CTR means people are generally interested in your ad, and they expect to find what they are looking for by going to your website. 

#2 Contextual Relevance

Do you think your ads are specific, and if so, to what extent? Do CTA and the provided offer make sense? For instance, if you use Call to Action lines such as "Visit Our Store As Soon As Possible," and you are selling products online, this will create contextual irrelevancy and result in low ratings.

#3 Landing page Experience

Your landing page plays the most prominent role in converting your visitors and actually making you sales. You need to make sure that your landing page perfectly matches your Ad. Otherwise, visitors may bounce off your webpage, in other words, exit right after they land on your web page. This usually happens when your Ad claims one thing, and your landing page another.

Apart from that, one of the most important things when creating a landing page design is putting call-to-actions or CTAs on your webpage. Visitors should know what the next actionable step is to benefit from your products or services.

quality score

Source

Now you might ask yourself, why do you need a higher quality score? Well, first of all, the quality score indicates how effective your ad is. This, in turn, gives you an idea of what you can expect from an advertisement. 

Also, the Quality Score plays a significant role in the placement of your ads, also called Ad Rank. As you have seen from the examples, there can be multiple ads on the same page. Although which ones come first, which ones come second is determined by bidding, high QS can actually help you rank higher above your competitors even if you are paying less per click.

 

Conversion Tracking

After you set up the campaign, the keywords and ads start to generate a number of clicks. It is good news. However, without tracking those conversions, you cannot estimate how many of those clicks result in actual sales. Conversion tracking is a very effective tool that can help you learn data about the clicks, sales, leads, email signups, and downloads. With this information and data on hand, you will be able to see which keywords work great and which ones are not so effective. So, it will be easier for you to improve your strategies and modify your bids.

 

How to set up Conversion Tracking?

It is very easy to set up conversions in Google ads. All you need to do is to click the tools and analytics tab in the Google ads and select the conversions bar. After that, you need to fill a form so that Google can generate related HTML code for you. By using that code, you will be able to see the results. The source of the conversion is another aspect of the setup process. The choices regarding this matter are Webpage, Call on-site and App download. The webpage conversion is for those people who want customers to take particular actions on their websites. The on-site call option is about those users who want customers to contact them directly through the phone. Lastly, the app download, as you can guess from the headline, is for those users who want customers to download their apps.

 

Four Basic Metrics

After you have successfully created your account structure, campaigns, and ads, it is now time to optimize them. There are four basic metrics that you need to learn, which play a significant role in understanding your campaigns' performance. Let's dive into it!

four basic metrics of Google Ads

 

Impressions

Impressions are the number of times your ad was viewed or was served. Whenever people see your ads either on Google search results or while browsing on the internet, it counts as one impression. They don't have to take any action by clicking on your ad or contacting you. People may not even notice it and go past it, and it would still count as impressions.

 

Clicks

As the name suggests, clicks is the number of times your ad was clicked on. This is very different from impressions because it requires viewers to take action. It happens when people are interested in your initial offerings, and they land on your webpage by clicking on your ad.

 

Conversions

Conversion can mean different things to different people, depending on their goals. The goal can be selling a product, receiving a call, or getting an app download. Once the goal is reached, it counts as a conversion. It requires people to get an impression of your ad, click on it, and take the action you have intended for them to take, such as purchasing your sports sneakers.

 

Spend

This one is pretty straightforward. Spend is the amount of money you have spent on your ads and campaign.

Four crucial concepts derive from the combination of these metrics. They are click-through rate, cost per click, conversion rate, and cost per conversion.

 

Measuring Success

four PPC concepts

 

Click-through Rate

Click-through rate or CTR indicates what percentage of the people viewing your ad have actually clicked on it. Here's the formula:

CTR = Clicks / Impressions

CTR generally gives you an idea of how effective your ad is in persuading people to click. It can depend on various factors, such as the selection of your targeted keywords or the quality of your ad copy. Higher CTR is always better, indicating the excellent performance of your ad.

 

Cost Per Click

Cost per click or CPC, as the name suggests, shows how much you are paying for each click. You should always try to keep this number down to minimize spendings on advertising and maximize profits. Here's the formula:

CPC = Spend / Clicks

 

Conversion Rate

Conversion rate shows how many people clicking on your ad actually converts by purchasing your product, filling out a form, or making a phone call.

Conversion Rate = Conversions / Clicks

It is a good indication of how well your landing page is doing in converting people. The higher the conversion rate, the better! As you will be paying money for each click you get no matter whether it converts or not, it is in your utmost interest to convert as many clicks as you possibly can.

 

Conversion per Acquisition

Conversion per Acquisition (CPA) or Cost per Conversion shows how much money you are ultimately spending for each conversion. The lower this number is, the better! A Google Ads campaign can only be sustainable if you keep your CPA low to maximize profits.

CPA = Spend / Conversions

 

Final Thoughts

If you have made it this far, congratulations! Now you know the fundamentals of Google Ads or pay-per-click advertising in general. Go ahead and create your first campaign!

Don't stop there; browse our website for more valuable information on pay-per-click marketing, search engine optimization, and web development. If you need professional help for developing and advertising your website on the biggest digital platforms, contact us now!