Chapter 4

Quick Overview of how AdWords Works

how-adwords-work
  • Google AdWords provide a wide variety of mediums to advertise on. These mediums include the Google search engines and Google partner search engines such as AOL.
  • Via Display advertising (which reaches 83% of the world’s websites and mobile applications) you can advertise static banners as well as dynamic HTML5 banners, video ads and interstitial ads.
  • Bidding on those placements can be done using the following bidding methods:
  • Pay Per Click (PPC) – you pay only when someone clicks your ad – popular with search advertising with a specific action driving objective like a purchase or a signup.
  • Pay Per Mil (thousand) (PPM) – you pay when someone views your ad – popular with display advertising with a branding / awareness generation objective.
  • Pay Per View (PPV) – this is popular in video advertising with a branding / awareness generation objective.
  • Choosing the bidding and advertising medium will always depend on your goals and budget.

The Basic Cycle of Working of AdWords

basic-adwords-work-cycle
  • When you start using Google AdWords, every dollar you spend should be taken into consideration carefully. If you start investing your money in certain keywords or ads and realize they are not leading to positive results, it’s an alert to reassess your strategy. The advantage in Google AdWords is you can see the number of people who saw your ad, the number of people who clicked on your ads to visit your website, and the leads generated from your ads.
  • In essence, AdWords is an auction system. The ads that are displayed are the ones that won the auction. Every time a search is conducted on Google, an auction takes place. Winning results are based on the Ad Ranks. Ranks are calculated by multiplying the Quality Score of the ad and the bid amount. Quality Score is a metric which assesses account relevance and landing page factors. It is an estimate of the quality of your keywords, ads and landing pages on a scale of 1-10 and is determined every time a customer searches a keyword you are targeting. Quality Score X bid amount = Ad Rank
  • The more relevant your ads and landing pages are, the higher your quality score – resulting in a higher ad rank, higher ad position and lower cost per click.
three-components-of-quality-score
  • The three components of Quality Score are:
  • EXPECTED CLICK THROUGH RATE
  • AD RELEVANCE
  • LANDING PAGE EXPERIENCE
  • We will elaborate on this later on but first let’s start by understanding the different campaign types we can use.

Types of Campaigns

  • Search Campaigns
  • Display Campaigns
  • Search with Display Select
  • Remarketing Campaigns (Display and Search)
  • Video Ad campaigns
  • Google Shopping Campaigns
  • Universal App Campaigns

Search Campaigns

  • You can setup a campaign targeting the Google Search Network (GSN) consists of Google Search, Google Maps, Google Shopping, and many Non-Google Search Partner websites like AOL that show Google Ads matched to search queries. On the GSN you can setup campaigns to show your ads along with SERPS.
  • The Ad format available for Search Campaigns is Text Ads.
  • On GSN you can target campaigns to specific locations, time, and devices. These campaigns are keyword based. We will elaborate on that but for now what you should know is that on GSN when people search the keywords you are targeting, if your bid wins, your ads will be displayed to them along with the search results on Google Search. If anyone clicks your ad, you will pay for the click. AKA Pay Per Click (PPC).
  • Here is an example of different GSN winning bids for the keywords “Mens Shoes”.
search-network-ads-examples

Display Campaigns

  • You can setup a Display campaign targeting The Google Display Network (GDN) which aggregates about 83% of the world’s advertising inventory or advertising space on websites across the world including Google Websites like Google Finance, Google Blogger, YouTube, and Gmail, a host of Google Partner sites, Mobiles sites and Mobile Apps.
  • Ad formats available for Display Campaigns are Text Ads, Image Ads, Rich Media Ads and Video Ads.
  • Here is an example of different GDN ads:
google-display-network-ads-examples

Search with Display Select

  • If you want to try out AdWords with the least efforts – Search with Display Select is a good place to start. This campaign type enables you to use a combination of Search and Display ads targeting both the search and display campaign from one single campaign. This is recommended only for beginners, as search only and display only campaigns have better targeting features that help them perform better.
  • Ad formats available for Search with Display Select campaigns are Text Ads, Image Ads, Rich Media Ads and Video Ads.

Remarketing Campaigns (Display and Search)

remarketing-campaigns
  • Remarketing campaigns target prospective customers who visited your website previously while they browse the internet. These prospective customers are people who have visited your website but not taken a specific action you wanted them to – like make a purchase, fill a form, download a whitepaper or e-guide, click to call you, etc. Remarketing campaigns have to be setup separately for search and display networks. Remarketing for Search is also known as Remarketing Lists for Search Ads (RLSA). We will talk about Remarketing campaigns in detail in a separate chapter on how to set up and optimize them.
  • Ad formats available for Display Remarketing Campaigns are Text Ads, Image Ads, Rich Media Ads.
  • For Search Remarketing Campaigns only Text Ad format is available.
video-ad-campaigns

Video Ad Campaigns

  • You can create video ad campaigns which run on YouTube and other Google Partner websites. Video Ads have shot up in importance as YouTube is the second largest search engine in the world after Google Search. You can target YouTube with other ad formats like text ads and display ads from the display campaigns.
  • Ad formats available for Video Campaigns are display video ads and in steaming video ads.

Google Shopping Campaigns

google-shopping-campaigns
  • If you are selling a product, you can setup your product ads through Google Shopping Campaigns targeting people who are searching for the product you offer. Google Shopping Campaigns displays your product images, price and your business name. Google Shopping Campaigns let you show your product specific ads across devices when people are searching products that you offer. Google Shopping Campaigns provides features which allow you to showcase your local inventory from the closest store (in case you are a multi store retailer), and stand out as trusted store, with promotional offers, and product ratings.
universal-app-campaigns

Universal App Campaigns

  • Universal App Campaigns target specific goals like mobile app installation and engagement across GSN, GDN, Mobile app network AdMob and YouTube. This campaign type is automated and requires very little effort to set up making it very easy for driving mobile app installs. Universal App Campaigns can be setup from the Google Play Developer Console or AdWords. You can provide up to four lines of ad text which can be used interchangeably including an option to run video ads through YouTube. The targeting options are limited to location and language.
  • This campaign type works on a Cost Per Install (CPI) bid strategy. Once you setup the campaign, the ads are generated and the campaign is optimized automatically to deliver mobile app installs based on the CPI targets.
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