The Basics of Google Ads: What You Need to Know

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Janet Mobley

Think about the last time you searched for something on Google.

It was probably no more than an hour ago. Maybe it’s even how you found this article.

Whether you’ve noticed it or not, when you perform a Google search, you are being shown advertisements in your search results. These ads have become so commonplace to internet users that it’s easy to forget that they’re part of a strategic marketing plan used by companies to promote their products and services.

These paid advertisements, called Google Ads, are tied to the keywords that you search on. Companies pay to have their website appear when a particular keyword is searched, in the hope that it will result in more web traffic, and in turn, more sales.

Using Google Ads (previously known as Google AdWords) is a way for your business to stand out among your competitors. Read this guide to learn the basics of Google Ads for your business.

Basic Terms to Understand

Here are a few key terms you should understand before getting started with a Google Ads account.

Ad: An ad is a message that a business pays to be shown to possible customers.

Keyword: A keyword is a word or phrase related to your message that is used to help your advertisements appear in search results.

Ad group: An ad group is a group of advertisements that all share the same keywords.

Campaign: A campaign is a set of ad groups that share a budget.

Ad extension: These are additional attributes beyond your original message that give searchers more information about your business. Examples include a clickable phone number, a link to a specific page on your website, etc.

Click: A click is counted by Google when someone clicks the link in your ad.

Impression: An impression is counted by Google when your ad is presented in a search result.

Interaction: An interaction is counted by Google if a user interacts with your ad beyond just clicking the link. For example, if your ad includes an extension that is clicked by a user, it will be counted as an interaction.

Clickthrough rate (CTR): Clickthrough rate is essentially an equation. It’s determined by the number of clicks your ad receives divided by the number of impressions it has.

Types of Ads

When you type in a search on Google, anything that you write is considered a keyword. If you see advertisements in your search results, then a business has listed that keyword as a relevant term they want to rank for in search results.

There are a few different types of ads that you will see in your search results.

Search ads: Search ads appear at the top of your results, before any other option. They will have an ad icon next to the website URL. Other ad extensions like ratings, additional links, and phone numbers may also be included in the result.

Geofenced ads: Geofenced ads are shown based on your location. They are shown under a map with surrounding competing businesses and the location of each result. This is great for local businesses or companies that are trying to target users in a specific location.

Display ads: Display ads are image ads that appear in your search results. As you can see in the example below, a search for the keyword “shoes” shows display ads with different types of shoes you may be interested in buying.

Remarketing ads: Remarketing ads are a type of display ad, but they are not shown as a result of a keyword search. Instead, they appear to users who have previously visited a website. For example, if you’ve ever searched for a specific car brand and then you start to notice ads of that car when you visit other, even unrelated, websites, you’re seeing remarketing ads.

Underneath all of the ads in a search result are the organic listings, meaning they are unpaid results.

Below you’ll see a screenshot of a Google search for the term “shoes” and how the different types of ads appear in the results.

Types of ads in a Google search

Payment Options

When you set up a Google Ads campaign, you can choose how you’d like to pay from three different options. The budget you’ve decided to allocate for Google Ads may dictate which option works best for your business.

Cost Per Click: Your Google Ads account will be charged every time one of your advertisements is clicked. So, if your advertisement shows up in a lot of search results, but no one is clicking on it, you won’t be charged.

Cost Per Impression: Your Google Ads account will be charged every time your advertisement appears in a search result, even if no one ever clicks on it.

Cost Per Interaction: Any action taken that goes beyond the initial click of the ad is counted as an interaction. If your ad includes extensions, like a clickable phone number, your Google Ads account will be charged every time one of your extensions is clicked.

More information about budget options is available on the Google Ads website.

At FatCat, our digital marketers know the ins and outs of how to help you achieve success with Google Ads. If you want someone to help you set up and/or manage your Google Ads account, let’s talk.

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