How Google Ads Work?

With Google being the #1 platform for reaching customers with buying intent, it certainly would help knowing how they work and all the processes behind it.

In this article we will try to give you all the information you need to know whether Google Ads is right for you.

 

Table of Contents

How Do Google Ads Work?

Google Ads is an advertising platform for various types of content (text, video, image). That content can then be served to a specific country, language, demographic…

Google Ads has a certain hierarchy for serving ads. Below is a visual representing that hierarchy.

Google Ads Hierarchy

As you can see, within a Google Ads account you have campaigns, ad groups, ads with keywords and a landing page for your ads.

One should mention that you can have 1 account for your business. You can create many campaigns and you would generally want 5-10 ad groups, 20 or more keywords per ad group and 2-3 ads. That does however change depending on your business.

Generally, you should align Google Ads hierarchy with your product hierarchy. For example, if you sell clothes online, your campaign could be “Clothes for Men”, your ad group “Men Jeans” and your ads could then promote different benefits and features of jeans which you sell.

 

How Google Ads Auction Works?

Google Ads operates as a pay-per-click platform.

The amount you pay is influenced by the dynamics of the Google Ads marketplace.

This marketplace functions through an auction-based system, where you compete with others for placements based on the keywords or audience segments you’ve selected.

Your bid plays a significant role, but it’s not the only factor. Google also evaluates the relevance of your ad campaigns through its Quality Score, as well as the potential impact of extensions and other enhancements.

It’s worth noting that certain keywords or audience groups may come with higher cost-per-click rates. This highlights the importance of thorough keyword research—not only to identify valuable terms but also to understand their potential costs.

The more relevant your ad and the more competitive your bid, the greater your chances of achieving favorable rankings and frequent visibility. This can lead to a higher share of impressions (how often your ad is shown for your chosen keywords) and even top placement in search results.

Below you can see Google Ads Account Overview.

Google Ads Account Overview

Different types of Google Ads

Google Ads has in total 6 different campaign types you can select. 4 out of those 6 represent advertising with different types of content and 2 integrate many types of content to give on many different placements. There are:

 

  • Search Ads: Text ads, most popular type of ads, where you are advertising in Google SERP (Search Engine Result Page) or put simply those ads you see when you search anything on Google.

 

  • Display Ads: Image ads that is being shown on different websites in Google Display Network. Generally used for retargeting people who already interacted with your website.

 

  • Youtube Ads: Video ads that are being shown on Youtube videos. Great for product showcase or benefits showcase.

 

  • Shopping Ads: Ads that are being shown on Google Shopping and in SERP depending on relevancy and quality.

 

  • Performance Max Ads: Giving Google the control over your ads placement by providing it with videos, images, copies and letting it optimize for the “best” platform.

 

  • Demand Gen Ads: Visual Ads shown on Youtube, Gmail and Google Discover.
Google Ads Campaign Type

How Google Ads Campaign Creation Works?

In your Google Ads Account, under Campaigns, you can see a + sign for creating a new campaign. Once you click that, you will be asked to select a campaign objective. That can be sales, leads, web traffic and others.

Google Ads Objective Choice

After selecting your objective, you can select your campaign type, name your campaign, and select where you want your ads to lead (website, phone, local store).

Once you do all that, you will come to a campaign editing window. Here you can then edit all the important campaign information and options. Those options include bidding, placement, location, language, audience, ad rotation, keywords and ads (if you want to create an ad group immediately) and budget.

Google Ads Campaign Creation

When you are done creating a campaign which would also include setting up conversion tracking through Google Tag, you can create more ad groups, as well as ads and you can then optimize it to standard.

For all those wondering how Google audience targeting works, you can see a visual below.

Google Ads Audience Segments

And for a complete list of Google Ads audiences, topics and other, you can visit this link.

If you found this article helpful and wish to work with us, make sure to check out our 100% client- dedicated service and offer via this link.

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