How Google AdWords Works: A Primer for SEM Newbies (PART 1)

The benefits of advertising through Google's AdWords program should be obvious - it enables you to target consumers in a variety of ways (keywords, location, time of day, devices), set a budget for spending to control cost, and measure your success.

Few other platforms are as robust as Google's AdWords offering and it has made familiarity with the solution of immense importance to today's digital marketers (Google is even now bringing some of its most powerful features to its AdWords Express product). With such an extensive platform, it's important to know all of its ins and outs so that it can be utilized to the fullest. Over the next few weeks, Website Magazine will be taking a closer look at how the AdWords ecosystem works so make sure to bookmark or save this page for later so you can return to catch the updates.


The first thing to know about setting up an AdWords campaign is that there are two different networks - the Search Network and the Display Network where ads will be run and advertisers need to choose carefully based on their expectations. The Search Network is used to reach customers actually searching for specific products or services, whereas the Display Network is meant to build awareness, loyalty and engagement. To simplify, consider it a choice between text-based ads (Search) or image-based ads (Display).


Each of the networks has different capabilities and it is important for advertisers and marketers to know what they are and how to take advantage of them. Those advertisers running search campaigns may focus their attention on keywords, the development of headlines or enhancing their listings with ad extensions. Those running display campaigns will be concerned with audience types and targeting methods. Ultimately, what advertisers are after is a campaign that is relevant to their prospective visitors. When that is accomplished, higher quality ads are created, and with the AdWords ecosystem, that means lower prices and better ad positions.

For this reason, Google puts a great deal of emphasis on Quality Score and Ad Rank. Quality Score is an estimate of the quality of ads and landing pages triggered by that keyword in auctions throughout the day. Ad Rank determines the order in which the ad shows up on the page (it's also known as ad position). Quality Score is also impacted by the click-through rate, so even if the landing page is excellent and the position is high (based somewhat on the bid price) it still may not receive any clicks; in which case the Quality Score is low and the cost per click will be higher.

While optimizing a campaign for Quality Score is fast becoming a necessity, advertisers still have control over what they are willing to pay which makes selecting a campaign specific bidding strategy and setting daily budgets so incredibly important.

There are three types of bidding strategies to be aware of - cost-per-click (CPC), cost-per-thousand impressions (CPM) and cost-per-acquisition (CPA). The right AdWords bidding strategy should be based on the goals of the business being advertised. One advertiser, for example, might want to increase the number of website visits while another may require a specific action (like filling out a lead form).


Remember to save or bookmark this page for Part 2 of "How Google AdWords Works: A Primer for SEM Newbies".