How Do Google Adwords Work?

Google Adwords is an online advertising program that allows you to create ads against your products and services. Adwords are run through something called Pay-Per-Click (PPC) advertising, and the effectiveness of it depends on a number of factors. These factors will determine how likely users will click on the ad. When a user performs a search, a Google auction is performed which determines whether the ad forms in the results of a search query. How well an ad performs is dependent something that’s known as an Ad Rank.

So, now we’ve provided an overview of Google Adwords, the next thing to breakdown how it exactly works. Understanding how it works is key to developing the techniques necessary to make your Google Ad Rank effective.

The Key Criteria

Let’s break it down into basic terms to understand the key criteria:

  1. Click-Through Rate (CTR) – The ads that appear depend on the keyword relation, between what’s searched and what’s in your ad. Google looks for two things; the number of clicks on your ads and how much each click charges. This is known as click-through rate (CTR). The CTR calculates the number of users that open your ad. The CTR monitors the level of traffic on your ad, which works and which doesn’t.
  2. Quality Score – The more revenue that an ad returns, the better it is for you and for Google. Therefore, the overall quality score is important because Google will only select those ads that maximizes their own revenue. Every keyword gets its own quality score.
  3. Key phrase Relevancy – The first thing to ask yourself, is which keywords contain the most relevance? All keywords need to be specific and needs to take into account which key phrase develops the best Click-Through Rate (CLR), If the CLR is high, your add will receive ‘impressions’. Google forecasts your oldest and current CLR’s to determine how well it matches up to a search.
  4. Landing Pages – How effective is your landing page? How effective is your ad page? The effectiveness of your ad page plays a role in Google determining whether you’re credible enough. Ensure your landing page is user friendly as you may not think it impacts your quality score, but it does. You add should be clearly visible and if your page is messy, users will click off, downgrading your Quality Score.


To summarise, Google Adwords performs comparisons against your competitors and identifies the effectiveness of your CTR, Quality Score, Relevancy of Keywords and structure of your landing page. These factors determine what you’ll pay. The purpose of this is to keep the value in which you pay as low as possible. Therefore, your Google Adwords strategy needs careful thought with these factors illustrated above in mind.

Need further support on how to make your Google Adwords strategy work for you? Contact us at Smile & Grow by clicking here.

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