What is Google Ads and How Does it Work

As a Google Ads manager, I work with business owners who want more of the right people finding their website, taking action, and becoming customers. 

I’ve seen Google ads work for many different businesses:

  • Local service companies, like dental offices and home contractors trying to drive phone calls
  • Professional services firms focused on qualified form submissions
  • e-commerce brands measure success in completed purchases

First, let’s take a look at defining what Google Ads are.

What is Google Ads?

Google Ads is Google’s paid advertising platform. They are what allow businesses to create targeted ads for users of Google’s platform.

This is what makes them so effective: they’re targeted at users most likely to click on the ad. 

While you pay for ads; Ads are shown based on relevance, not just budget.

There are many types of ads, though, each with its own format and purpose. Generally, these are bundled as “Ad Campaigns”.

Who Is Google Ads Designed For?

Google Ads is designed for anyone promoting a product or service who wants to reach new customers.

This range is broad, spanning from small local businesses and shops to large companies.

Next let’s take a look at where people would see various types of Google Ads.

Where Google Ads Appear

Advertisers bid to show ads across:

  • Google Search
  • Display Network
  • YouTube
  • Gmail
  • Discover
  • Apps and websites

One of the most common places you see Google Ads is in the sponsored results section of a Google search. 

Google bumps up a high bidder to the top and displays other websites that paid to be displayed. These rankings are just one of the many types of Google ads. 

Now that we know where they appear let’s look at how they work.

How Does It Work?

When displaying ads for a business google only charges them using cost per click, so the business will enter a bid for how much they’re willing to pay for a click to their website. 

Google can target people who are most likely to see and click on ads by using targeted Google Ad Campaigns. For more information on Google Ad Campaigns, you might find this article useful. 

When setting bids, a business is saying how much they’re willing to pay for a click, then google uses their bid system to display targeted ads bidding the most. However, the bidding system isn’t the only system Google Ads uses to control who sees ads. 

Google ads are ranked based on:

  • The Bid
  • Quality of the ad and landing page 
  • Expected impact
  • Ad Rank
  • Context
  • Auction competition. 

Google combines these factors so people can’t just outbid other ads with better relevance to the consumer.

These ads use targeted advertising, essentially: how likely is the user to click on an ad? This is determined using Google’s data analytics, so that your ads reach users most likely to click on your ad.

Google Ads use keywords in their ad campaign to narrow down who will see the ads. This is done with keyword matching based on the ad campaign.

Now that we know how they work, let’s look at the point of Google Ads.

What is the Goal of Google Ads?

Google Ads can increase a business’s reach, but the specific goal, whether it’s conversion, sales, leads, or simply traffic to their page, depends on the business. 

The overall purpose of Google Ads is up to what a company wants from their ads. Generally, the goal is to get targeted ads to users to get them to click on the ad.

What are the Types of Google Ads 

The format for Google Ads depends on the type of ad campaign. Here are the different types of Google ads: 

  • Search ads – Appear at the top of a google search as sponsored results
  • Display ads – On web pages in side bars, good for building awareness 
  • Shopping ads – Google Shopping sponsored suggestions and images
  • Video ads – Generally on Youtube before and after videos
  • App ads – Appear in Google Play Apps
  • Discovery ads – Placed on the Google and Youtube app homepages
  • Local Services Ads – Based on search results and location
  • Performance Max ads – AI powered ads that reach very specific targeted consumers
  • Smart ads – Use broad keyword matches to display various types of ads to consumers
  • Responsive Search Ads – Flexible ads that can appear anywhere and dynamically optimize over time

You may now be wondering, how much do Google Ads cost? 

Now that we understand Google Ads and we’ve seen an example of how they’re used, let’s evaluate if Google Ads would be worth your while…

Should you use Google Ads?

Google Ads is one of the most effective ways to get new traffic. But will the cost be worthwhile for you? 

Google Ads is one of the most flexible ad platforms, allowing business owners to target specific audiences, manage budgets, and track quantifiable results.

If it’s within your budget as a business owner and Google Ads can contribute to your goals, then we would say it’s a worthwhile investment. But ultimately, your business’s needs are up to your discretion.