Advertising on Google’s Search Network
Guidelines to Advertising on the Google Adwords Search Network (Google search-based ad campaign)
Google Adwords Search Network program enables you to create simple and effective advertisements and to display them to people who are searching for information that is connected to your business via advertising that is based on keywords.
Types of ads that can appear in this type of ad campaign
Text ads
(New ad formats that enable additions to your text such as ad sitelinks, location and product extensions, video and price comparison are in beta in the United States and some are only available to select advertisers.)
Payment Model
The payment model on this program is CPC (Cost Per Click). You submit a maximum bid that you is willing to pay per person who clicks on your ad, and you only pay if people do in fact click. You will usually end up paying less than your maximum bid, depending on the other competitors in the auction for those spots. The exact formula is described below.
When will the ad appear?
When the surfer enters a search phrase that matches one of the keywords determined by the Search Network advertiser in the ad group. You can choose if you want your ads to appear with:
- an exact match of the keyword (if you chose the keyword “car”, your ad could appear only if someone searched for “car”)
- with a phrase match (if you chose the keyword “car”, your ad could appear for “car race”, “car insurance” or “car seat”)
- with a broad match (if you chose the keyword “car”, your ad could appear for “auto”, “vehicle” or “truck”)
Ad Position
The position of the ad in Google Adwords Search Network (among the other ads shown) is determined by your Ad Rank.
Ad Rank = (the amount you have bid) x (your ad’s Quality Score)
The Quality Score formula takes into account the following factors:
- The CTR (clickthrough rate – the percentage of clicks the ad received out of all the times it was shown) of the keyword and the ad in question
- The CTR of all the other ads and keywords in your account
- The CTR of the display URLs in the ad group
- The relevance of the keyword you chose to trigger the ad and the ad itself
- The relevance of the keyword and the ad to the search query
- How well your account has performed in the geographical region of the searcher
A representation of your Quality Score for each ad can be seen in your Google Adwords Account next to the ad, although bear in mind that this is only a representation and not the actual figure.
Ad Price
The price you actually pay for an ad is determined by:
(Ad Rank of the ad that shows above you) / (your ad’s Quality Score), rounded up to the nearest cent
Importance of CTR
As seen above, one of the major factors in determining Quality Score is CTR. This fact is worth taking advantage of in order to save on advertising expenses. If your ad attracts many clicks, it is possible to bid a lower price per click and even so have your ad appear many times and in a higher position. With the same investment – and sometimes even with less – you can achieve a greater result (there are times when one can save half the amount and receive the same result).
In this context it is worth mentioning that many website owners put the phone number of their business in the text of the ad, thinking that this will save them money because surfers will call instead of clicking on the ad itself (less clicks, less money). This mistaken thought is likely to cause the opposite effect (less clicks, less exposure and higher price per click when there is a click).
Optimizing Ads on Google’s Search Network
You cannot know in advance which of the ads will appear for each word of the list of keywords chosen. You can, however, set the ads to appear in equal proportion for any given keyword (for example, if there are four ads for a given keyword, each will appear 25% of the time), or set it so that the ads will appear optimized to the CTR (an ad with a higher CTR will appear more often).
Only the ads with the highest CTR rates should remain active in the Google Adwords Search Network. Instead of just pausing the ads that don’t perform as well, try to rewrite the ads and keep testing to get your CTR higher and higher.