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15 Interesting Facts About How Google Ads Work

Digital Advertising

As a small business owner, what would you say is the most challenging part of handling the marketing efforts of your own business?

Some say it’s the lack of resources to implement and execute a marketing plan, others say they have trouble tracking the ROI of their campaigns. But what many small business owners can agree on is the fact that they always have to fight to get noticed when it comes to web searches.  

In this digital world, we both know how vital it is to rank on the first page of search results.  

According to Google, 94% of their clicks happen on the first page of result pages. This means increasing your online visibility is the only way to get more of your target audience to visit your website and generate leads!  

This is why SEO is incredibly important. However, because Google’s algorithm changes on a near-daily basis, keyword ranking is highly unpredictable, meaning you can rank first today but for the next few days you might drop to the third or fourth position, which can have a huge impact on your site traffic.  

What’s worse is that the lower you rank, the more you’re affected by even the slightest tweaks or updates.  

Fortunately, you can use Google Ads to make sure you remain on top of search engine results pages for relevant queries no matter what changes or updates happen in the algorithm.  

In this article, we will share interesting facts about how Google Ads work and why it’s the perfect advertising platform for many small businesses.  

But before we discuss these things, let us first define Google Ads.

What are Google Ads and Why Are They Important for Small Businesses?

Google AdWords was first introduced in October 2000 and was then renamed Google Ads in 2018.  

It is an advertising platform that uses a bidding system to decide which ads will appear on top of Google’s search results and Google Maps for certain keywords.  

Google Ads uses a pay-per-click model that requires advertisers to pay only when measurable results, like website clicks and a business call, happens.  

What’s great about Google Ads, is that you get to decide how much you want to spend on a campaign and you can specifically target to whom you want your ads to appear, making it the perfect advertising platform for small businesses.  

According to SEO Expert, 92% of searchers are more likely to click businesses that are found on the first page of local search results.  

This proves that Google Ads is an essential digital marketing tool for any business, especially for SMBs because it’s the best way to reach potential customers who are actively looking for their products or services and quickly convert them!  

It puts your ad in front of the right people at the right time and in the right place, allowing you to maximize every user that is interested in what you have to offer.  

Investing in Google Ads puts you in a better position to succeed. But how do Google Ads work? Let’s find out.

How do Google Ads Work?

Google Ads work based on an auction system, which happens each time a user carries out a keyword search. Whoever wins the bid, receives the highest position in ad ranking.

During the bid, Google looks at two factors: Quality Score and Maximum Bid. Google multiplies both factors and the advertiser with the highest points gets the first ad position.

bidding-auction

To make sure that you get the highest ad rank, you’ll need to optimize your Quality Score and Bid Amount. The higher your quality score and your bid amount are, the better your ad positioning will be.  

How Much Will It Cost to Run Google Ads?

Your cost-per-click will be established based on the ad rank of the person below you divided by your Quality Score plus $0.01.  

The only time this equation doesn’t apply is when you’re the only bidder or you have the lowest bid in the auction. If this is the case, then you’ll need to pay your maximum bid per click.  

Google Ads Auctions tend to reward bidders with high-quality scores with higher ad ranks and lower cost-per-click.  

Aside from this, their ads also get displayed more often and are placed in better positions in the SERPs, allowing them to generate more leads without having to pay more.  

Conversely, advertisers who bid with low-quality scores are penalized and must bid higher to have a good ranking. This is why it’s important to work on your Quality Score.

15 Interesting Facts About How Google Ads Work

If you’re considering advertising your business using Google Ads then you must know how it works and the important figures that go along with it!  

Here are 15 interesting facts about how Google Ads work:

  1. Businesses earn an average of $3 in revenue for every $1.60 they spend on Google Ads (Google Economic Impact Report).
  1. 89% of the traffic created by search ads is not overtaken by organic clicks even when these ads are paused. (Google AI Blog).
  1. Ads that rank in the top three paid advertising positions receives 46% of all clicks (PPC Protect).
  1. 68% of marketers consider PPC as a very important part of their overall marketing strategy (HubSpot).  
  1. 50% of people who found a retailer site through paid ads are more likely to convert than those who found a site through an organic link. (Unbounce)
  1. Advertisements placed on Google Display Network can reach 90% of internet users. (WordStream)
  1. 49% of internet users click on text ads, making it the most popular type of Google ads. (Search Engine Land)
  1. The average cost-per-click in Google Ads is $ 2.69 for the search network and $0.63 for the display network. (WordStream)
  1. Small businesses are estimated to spend between $ 9,000 and $10,000 on Google Ads each month. (WordStream)
  1. The legal industry has the highest average CPC for Google Ads, while the eCommerce industry has the lowest. (Statista)
  1. 64% of brands plan to increase their PPC budget in the following year (State of PPC)
  1. 74% of businesses say that PPC plays an important role in the success of their business (State of PPC)
  1. 58% of millennials ended up purchasing something online because of PPC (Clutch)
  1. Google Ads convert 50% more than organic search results (PowerTraffick)
  1. Google dominates 71% of the search engine market. (PowerTraffick)

Are You Planning to Run a Google Ads Campaign?

online-advertising

Without a doubt, Google Ads can help small businesses get the leads they need to start growing their business this 2021. If you’re planning to run a Google Ads campaign, here are nine things that you can do:

1. Set up Your Account for Success

Organize your products and services by category. There are two levels of organization you should follow: campaigns and ad groups. Campaigns represent a general category, while ad words are more specific. For example:

Campaign 1: Lounge Wear

  • Ad Group 1: Hoodies
  • Ad Group 2: Sweat pants
  • Ad Group 3: Pajamas

2. Set Your Budget

When running Google Ads, there are two budgets you need to set. The first is the amount you want to spend on a campaign per day and the second one is your bid or the amount you’re willing to spend on a keyword is a user searches for it and then clicks on your ad.  

3. Choose Your Keywords Wisely

When choosing your keywords, you want to consider a searcher’s intent to make sure you pop up for queries that are relevant to what you have to offer. And as much as possible, avoid choosing highly competitive words. Target long-tail keywords instead because they tend to generate more quality leads.  

4. Set Your Keyword Match Types

Keyword match type allows you to control when your ad will shop up on search results. You have five options:

  • Broad Match: default setting for all campaigns. Shows your ad for searches that contain your keywords and to those related to it
  • Broad Match Modifier: allows you to specify that a certain keyword or keywords must be used during a search to trigger your ad to appear
  • Phrase Match: allows you to specify that your ads will only appear for queries containing your key phrase
  • Exact Match: is an option you can choose to make sure that your ads only appear if a searcher uses your exact keywords or key phrase during a search
  • Negative Match: allows you to specify what keywords will not trigger your ads to show

5. Create Your Landing Page

It’s important to optimize your landing page to make sure that every person who clicks on your ad will convert one way or another.

6. Set Which Devices You Want Your Ads to Appear

According to SmallBizGenius, 53% of paid clicks are conducted on mobile. So, you must optimize your ads not just to appear on computers or laptops but also mobile devices.  

7. Create a Relevant and High-quality Ad Copy

Make sure to optimize your ads by using a compelling call-to-action, use a relevant image or video, make sure it communicates to your audience well, make sure it provides value and it’s keyword-rich.

8. Connect Your Account to Google Analytics

Google Analytics allows you to track the performance of your ads, including your ROI, click-through rate, bounce rate, and other important metrics.  

9. Run Test Ads and Monitor

Because you can run multiple ads at once and set a certain budget, you can run test ads first to identify which campaign your target audience is more receptive to.  

Are You Ready to Take Your Business to the Next Level with Google Ads?

They say that Google Ads is created in a way that anyone can run ads on the platform. However, when you’re competing against Google Ads experts, it’s safe to say that your chances of winning the auction are slim to none.  

It’s best to hire a digital marketing agency that can help you set up your Google Ads to account for success from the beginning, improve your quality score, create compelling ad copy, track the progress of your campaigns, and more!

At Digital Resource, our team of Google Ads experts can help you get the leads you need to start making more sales and grow your business this 2021! Contact us to get started.

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