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The Fundamentals of Google Ads: What it is, How it’s Used, Who Should Use It

Luke working on google adsWhen it comes to allocating marketing dollars, the options are seemingly endless, and everyone has a different opinion on which advertising channel(s) work best. Ultimately, the best promotional strategy will be different for every business. For that reason, we’re not here to pitch you on Google Ads, but rather to explain:

  • What it is
  • Why it’s used
  • Who should use it
  • How it’s best used

What is Google Ads?

Well, Google says, “Google Ads is Google's online advertising program. Through Google Ads, you can create online ads to reach people exactly when they're interested in the products and services that you offer.” While for many business owners and executives, Google Ads sounds like a new advertising platform, it’s actually been around for nearly 20 years, launching in 2000 as “AdWords.” In 2018, the company renamed the program “Google Ads.”

What is Google Ads, exactly? Google Ads is a paid advertising platform that allows organizations to 1) show ads in search engine results pages (SERPs), 2) on websites included in Google’s network, and 3) on mobile apps. It’s one of the many forms of search engine marketing (SEM) and pay-per-click (PPC) advertising. Although Amazon, Bing, Facebook/Instagram, Pinterest, and Twitter all have their own variations of these practices, Google still dominates the market.

Google Ad Networks are divided into two primary groups:

  1. The Search Network
  2. The Display Network

If you're advertising on Google's Search Network, your ads may show up in SERPs, Google Maps, Google Shopping, and on search sites that partner with Google. Conversely, if you're using the Display Network, your ads may appear on over two million sites that reach over 90% of all people on the internet.

Why Do Businesses Use Google Ads?

Google Ads is a practical approach to creating brand awareness, driving traffic to your site, and increasing conversions. Unlike social media ads, advertising on the Search Network shows relevant ads to people who are actively searching for a product, service, or answer that fulfills their needs.

One of the most attractive features of Google Ads is that you can set your own budget, and there is no minimum monthly spending limit. Google also allows you to pause or stop your ads at any time, making it ideal for seasonal products and services and for brands concerned about long-term commitments.

The returns that can come from using Google Ads are substantial. On average, $2 in revenue is generated for every $1 spent, equating to a cool 100% increase. Not bad, right? However, some estimates of Google’s average ROI are as high as 800%!

Google Ads can also be a boon to your brand awareness. In marketing, there is an old adage called the "Rule of 7." It suggests that people need to see your name, brand, or offers seven times before they'll remember it and take action. Therefore, as consumers see your URL repeatedly appear at the top search results, they'll begin to remember your business. 

Furthermore, a conversion in Google Ads isn’t always a sale. Smart brands use it as a part of a larger nurturing campaign wherein they advertise their free content in exchange for contact information. This strategy not only eliminates the obnoxious “hard sell”  of a product or service, but it also better positions your brand to build trusting relationships with future customers.

Who Should Use Google Ads

Google Ads can be expensive, but it can also be a source of healthy returns. Bottom line: If you can’t invest at least an average of $500 a month, Google Ads isn’t for you. While there are cases for ramping up with smaller budgets (gathering data in the first few weeks, slower seasons, etc.), this strategy doesn’t work particularly well if you’re running out of ad spend before the month is up.

The suggested percentage of your gross revenue that you should spend on marketing changes depending on the source, but generally, it falls anywhere between 2-20%. However, that’s not just on Google Ads, that’s all marketing.

Google Ads chart showing clicks

We typically recommend starting somewhere in the middle, at around 10-12%. When it comes to Google Ads, begin by taking 20% of the overall marketing budget and allocating it toward PPC, and adjust from there. What’s critical to remember about Google Ads is that you need a strong website as your foundation. Otherwise, the whole strategy will more expensive and less effective.

This ineffectiveness comes from the fact that Google considers landing page experience. If your site loads slowly, has weak content, and was developed poorly, you’re going to have a low ranking even in paid search—that is, if you appear at all.

Conversely, if you have an optimized site with high-quality content that’s relevant to your ads, your cost per click (CPC) will decrease, and your ad rank will increase. All this is to say, Google Ads work most effectively for businesses who already have a reliable website with specific landing pages built. Ultimately, we think Google Ads are best for businesses and organizations that:

  • Already have a great website
  • Already have invested in on-page SEO
  • Have at least $500 in monthly average monthly ad spend
  • Are able to allocate at least five to ten hours a week to management; or
  • Are able to allocate funds towards agency management

Example of Data

How is it Best Used

Every element of your business will impact how you and/or your agency approaches Google Ads, from your price point and product type to marketing goal and advertising budget. Despite all these nuances, there are three main reasons for using Google Ads. Here is a preliminary look at how to do it successfully:

  1. Brand Awareness: If you’re less concerned about immediate purchases, you should consider Display ads. Clicks and conversion are typically lower for Display ads, but cost per thousand impressions (CPM) is significantly lower than for Search ads. To make these ads eye-catching, team up with a graphic designer who can maximize the potential of your brand assets. Further, be sure to remarket to those who have clicked!
  2. Trust Building: If you already have valuable content created for your target audience, take to the Search Network and start disseminating gated content to those actively looking for answers. Collect names, emails, and phone numbers for future marketing endeavors and nurture these contacts into warm leads. If you’re competing for niche, long-tail keywords, your CPC should stay low, and your click-through rate (CTR) will be healthy.
  3. Purchases: If you have a product or service you’re trying to sell immediately, ditch Display and go for Search Network ads. If you have a product, we highly recommend creating Google Shopping Ads (part of the Search Network). Shopping Ads are highly-targeted and user-friendly. If you're selling a service, stick with Search Ads and ensure you're managing your keywords appropriately with broad phrase match, exact match, and negative keywords.

The Netwerk

Managing Google Ads successfully is no walk in the park. Without proper management, you can lose a significant chunk of budget without seeing much in return. To take the headache out of managing Google Ads, align with a seasoned digital marketing agency that’s armed with a crew of Google Ads Certified gurus. If you’re interested in learning more about how we help organizations amplify brand awareness, build trust with their audience, and increase conversion, reach out to us today by visiting our contact page.

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