Google ads

Google Ads: What Are Google Ads & How Do They Work?

Every second, there are 2.3 million searches performed on Google, and the majority of search results pages include Google ads. Paid for by businesses, Google ads can be an extremely effective way of driving relevant, qualified traffic to your website exactly when people are searching for the types of products or services your business offers.

In this article, you’ll learn what Google ads are, how Google ads work, and why you should run your own Google ads.

What Are Google Ads?

Google offers advertisements which appear in search results on google.com with the use of Google AdWords or advertisements that appear on other websites through the Display Network and Google’s AdSense program.

Below is an example of a Google search engine results page (SERP). There are two sections of paid Google ads, one above the “natural” or organic links and one at the bottom of the results page:

The sponsored results, or ads, (in the red box) are denoted with a green “Ad” label. The results that appear below the ads (in the green box) are referred to as organic results.

Google also offers Display Ads, which appear on the Google Display Network. The Display Network is an extensive collection of outside, third-party websites that have partnered with Google and agreed to serve Google ads. Google ads on the Display Network can be in text, image, video, or rich media format, and can be targeted differently. This includes remarketing and banner ads.

If using AdSense, your ads would appear in the selected areas on a website:

Why Google Ads Appear

The Google AdWords auction is focused around keywords – advertisers choose a list of keywords to target that are relevant to their business offerings, the words that people are most likely to use when searching for their product. They then bid on these keywords, basing each bid on how much they are willing to pay for a Google user to click on their ad. This bid, combined with a Quality Score assigned by Google based on the quality of your proposed ad, determines which Google ads appear on the SERP. When users click the ads, the advertiser pays a certain cost (the cost per click, or CPC), which is calculated according to the below formula:

This is where the term Pay-Per-Click (PPC) originates.

The AdWords Auction

AdWords works on an auction system, which takes place every time a user performs a keyword search.

To “win” the AdWords auctions and see your Google advertisement appear for relevant keywords, you’ll need to optimize your Quality Score and bid amount. The higher your Quality Score, in conjunction with your bid amount, the better your ad positioning. The following factors (among others) affect your Quality Score:

  • The relevance of your Google ad to the search query
  • The relevance of the Google keyword to your ad group
  • The relevance of your ad to its landing page
  • The historical click-through rate (CTR) of the ad and its ad group
  • Overall historical account performance

There are also overall benefits to having a high quality score:

  • Lower costs– Google rewards advertisers with high Quality Scores by lowering their cost per click (CPC), helping improve ROI.
  • Higher exposure – When you have high Quality Scores, your ads will display more often, in better positions on the SERP—the top vs. the bottom of the page. This enables you to get more clicks and conversions without having to raise your bids.

For more information, refer to this infographic to better understand how the AdWords auction works.

Google Ads Costs

The cost of Google ads varies based on a number of factors, including the competitiveness of your keywords and industry, your geographic location, the quality of your advertising campaigns and more.

In South Africa, the average cost per click for Google search ads across all industries is R 7.98:

In other countries, average costs for Google ads are often much lower:

Adwords Starter

$8500monthly
  • Setup Fee (once) – R2,800
  • Management Cost – 10%
  • PPC Management
  • Google Analytics
  • Conversion Tracking
  • Progress Report
  • Google Budget – R6000
  • 3rd Party Quality Score Tracking tool – R480
  • Strategy Meeting
  • Monthly Traffic – CPC Dependent
  • Click-Through-Ratio – 1-15% GO STARTER

Adwords Advance

$16000monthly
  • Setup Fee (once) – R2,800
  • Management Cost – 10%
  • PPC Management
  • Google Analytics
  • Conversion Tracking
  • Progress Report
  • Google Budget – R10000
  • 3rd Party Quality Score Tracking tool – R480
  • Strategy Meeting
  • Monthly Traffic – CPC Dependent
  • Click-Through-Ratio – 1-15% GO STARTER

Adwords Ultimate

24900monthly
  • Setup Fee (once) – R2,800
  • Management Cost – 10%
  • PPC Management
  • Google Analytics
  • Conversion Tracking
  • Progress Report
  • Google Budget – R21000
  • 3rd Party Quality Score Tracking tool – R480
  • Strategy Meeting
  • Monthly Traffic – CPC Dependent
  • Click-Through-Ratio – 1-15% GO STARTER

Compare and order Google ads (PPC)