How Does AdWords Work?

For new advertisers, understanding AdWords can be a daunting task without a helping hand to guide them. So, how does adwords work? Below is a quick summary to give you the run-down on how the AdWords system delivers ads, how your advertising activity is created & controlled, as well as some other important information you’ll need to get start on your very own campaign.

AdWords is an advertising network launched in the year 2000. The network was created to give advertisers of all spend-levels an opportunity to have a presence on Google’s search engine, as a “Sponsored Link”, shown on the top (in the yellow box), or right hand side of the search results. Sponsored links are outlined in red below:

So how does AdWords work for advertisers? AdWords is an auction based model, where advertisers select a specific “maximum bid” that they’re willing to pay for each click. here’s some points to make the initial process easy to understand. I’ll be using an advertiser that runs a florist as an example:

1) The advertiser created a Google AdWords account.

2) A range of keywords is selected. These are terms that you would like your adverts to appear for when Google search users type them into the search engine. They should be highly specific to the service or products you’re offering. In this case, we’d add keywords such as “find a florist”, “florist delivery”, etc. etc.

3) One or more adverts should now be created. The adverts are quite small, with 3 lines; 1 heading with a maximum character limit of 25 characters (inclusive of spaces), and 2 description lines with a maximum character limit of 35 characters (also inclusive of spaces). The site’s URL will also be displayed under the advert.

Adverts should also be highly targetted to the product or service you’re offering, so a florist’s ad will look something like this:

Florist – Free Delivery
Buy $50 worth of Flowers & Get
Free Delivery! Australia Wide.
www.randomflorist.com.au

4) Hopefully your question of “How does AdWords work?” is almost answered by now, but wait – it gets slightly more complicated! Once your adverts and keywords are complete, you’ll then need to go in and change your geo-targetting settings. This effects where in the world your adverts will be seen. If you’re a local business only servicing Sydney, then you can choose to only show your adverts to people located in Sydney.

5) Once your campaign is created and geo-targetting is set, you’ll then need to enter your maximum bids. AdWords is an auction based bidding system, which means you need to set a “maximum bid” for each keyword. This bid will be the most you’re willing to pay for each click with your website and, along with your campaign’s “quality score”, will determine where on the search results your advert will rank – the higher your bid and quality score, the higher on the search results you’ll appear.

6) You’re all set! Now all you need to do is enter your payment details, select your campaign’s maximum daily budget, then wait for Google to review your ads and you’ll be online!

Hopefully this answers you’re “How does AdWords work?” question – if not, feel free to give us a call on 02 9654 3323, or send us an email.