Google Adwords: the Ultimate Step-By-Step Guide

Written by: Tom Donohoe
Last updated: January 17, 2018

This is the ultimate guide to dominating Google Adwords for your business.

And let me be clear on something:

This is NOT another high-level, non-actionable guide. Instead, you’re going to walk away with the knowledge, strategies, and tactics to use Google Adwords for your business.

In this guide, you’ll learn how to:

  • Create a Google Adwords Account
  • Understand metrics and definitions
  • Use Google Keyword Planner
  • Set up Campaigns and Ad Groups
  • Measure results with Google Analytics
  • Advanced optimisation techniques to get better results

Sound good? Let’s jump right in.

Chapter 1

What is Google Adwords?

Google Adwords is Google’s advertising platform for businesses. It lets advertisers bid on keywords to boost your website to the top of the search results.

Want to know the best part?

Google Adwords can drive ready to buy visitors to your website. If people search for keywords related to your products and/or services you can show an ad.

Or as Google say, “reaching the right person with the right message at the right time, every time”.

Google Adwords Definitions and Metrics

To be an expert at Google Adwords can take years. And getting your head around all the definitions and metrics can be challenging.

Here’s the deal:

To understand this guide, and to get better at Adwords you need to know them. To help you out I’ve compiled a list of the basics that you need to know:

Keywords: are words or phrases that Google uses to match what people search to your ads. Selecting relevant and high-intent keywords is the key to running successful campaigns.

Quality Score: is Google’s measurement of the quality of your ads, keywords and landing pages. The better your quality score, the lower the cost of a click will be. It can also improve your ads position in search results. Quality score works on a scale of 1-10. And it’s determined by your expected click through rate, ad relevance and landing page experience.

A bid: is the largest dollar amount that you’re willing to pay for a click on your ad. Otherwise known as your maximum cost-per-click bid (or “max. CPC”). You may not pay this every time you get an ad click. For example, if your max.CPC is $1, you’ll never pay more than $1 for a click. Your “Avg. CPC” is the actual amount you pay for clicks.

Campaigns: are an overarching group that contains a set of ad groups (ads, keywords and bids). Campaigns share a daily budget, targeting options and other settings. They structure your Adwords accounts around the products and services you offer.

Adgroups: sit under campaigns and contain a set of ads, which share a set of targeted keywords. Each campaign must have one or more Ad groups. And it’s best practice to make each Ad groups keywords hyper related to one another.

Ads: are what are shown above and below the Google search results when your keyword triggers an ad. A text ad has three parts headline text, a Display URL and description text.

A Click: is when a person clicks the blue headline text of your ad in Google search results.

Click through rate: is the amount of people who click on your ad divided by the amount of people who see your ad. Click through rate helps you understand how relevant your ads are to your keywords.

Cost per click, or CPC: is the amount that you pay for each click on your ads. As mentioned above even if you’re maximum CPC is $2 doesn’t mean you’ll always pay $2 it can be less.

Conversion: an action you define as valuable to your business completed on your website from an ad click. For example,when a visitor buys something or completes your contact form.

Cost per acquisition (or conversion): is that amount you spend for a defined action (conversion) on your website from an ad. It’s calculated by dividing total costs by the total number of conversions.

Chapter 2

Creating A Google Adwords Account

Before you start running ads for your business in Google. You will need to create an advertising account.

Google has made the process very simple and I’ll take you through it below.

Make sure that you have the credit card you’d like to be charged on with you.

Setting up your Google Adwords Account

Here’s how it’s done:

Step 1: you’ll need to sign up for an account. This is quick and easy. Go to Google Adwords and click start now.

Creating a Google Adwords account

Step 2: Here I’d recommend skipping the guided setup. It will prompt you to create your first campaign while you haven’t completed any research yet!

Once you skip you’ll want to enter your details here:

Create Google Account Step 3

Step 4: Bada bing bada boom, you’re done! It’s that simple your account is set up. Before we move on there is one more step.

Step 5: Add payment details, so that you can run campaigns. You want to click on the spanner and from the drop down select “Billings & payments”. From there set up your preferred billing details.


Before you do anything else with your fresh account we need to talk about keywords. And how to find them.

Without understanding them you have ZERO chance of succeeding with Adwords.

Chapter 3

Google Adwords Keywords Explained

Keywords are at the heart of Google Adwords.

And here’s the deal:

Without keywords you can’t serve ads, at least on the Search Network.

Here I’ll give you the low-down on everything you need to know about keywords in Google Adwords.


Understating keyword match types

Before starting anything else, it’s important that you understand keyword match types. Keyword match types give you more control over what type of searches trigger your ads. They range from very broad to very controlled.

Here is an overview of the four keyword matching options to choose from:

  • Exact match: gives you the most control of what your ads show for in Google. Your ads will show for the exact term that you’re targeting or close variations. For example, if you’re targeting [women’s hats] it could appear for “womens hats” or “hat’s for women”.
  • Phrase match: phrase match gives you control but also some flexibility. Your ads will show for the phrase targeted with words before and after your phrase match. For example, you’re targeting “hat’s for women” you could appear for “cheap hat’s for women in sydney”.
  • Broad Match: broad match is the default that Google assigns keywords if you don’t choose a match type. It also gives you the least control over what your ads will show for in Google. For example, you can target “women’s hats” and appear for “buy ladies hats in sydney”.
  • Broad Match Modifier: is like broad match. But you will only trigger searches that include your keywords. To use broad match modifier you need to put a plus sign before the word. For example, +women’s +hats.

If you have a limited budget it’s best to stick with exact match to be sure you’re not wasting any clicks. If you need more clicks, then you will need to broaden your keywords. I stress if you take this option you MUST have a refined a negative keyword list.


Keywords are words or phrases that Google uses to match what people search to the ads you create.

Selecting the right keywords is crucial. And picking the right match type for each keyword takes time and experience.

In general, the less buying intent a keyword has the more you want to restrict it’s broadness by using exact match.

If a keyword has a longer string of words and is more detailed. Then you may want to broaden it to get more reach. In this case, you can use broad match modified.

Here’s a step-by-step process to adding a keyword to an adgroup:

Step 1: Navigate to the Ad groups tab. Then select the ad group you want to add a keyword to

Step 2: Click the blue button to add keyword

Step 3: Add in your keywords one per line. Then click save. And you’re done!

Negative keywords

Negative keywords are set up the same way as keywords. But instead you’re targeting them to prevent ads from showing for a certain word or phrase.

An example could be that you sell an online marketing course that costs $150. You wouldn’t want your ad to show in a phrase like “free online marketing course”.

In this case, you want to add “free” as a negative keyword. You should repeat this process to cut as many irrelevant words as possible.

Here’s a step-by-step process to adding a negative keyword:

Step 1: Go to the keywords tab then negative keywords, click the blue + to add negative keywords.

Step 2: Add one negative keyword per line

Chapter 4

Google Adwords Keyword Planner

The bread and butter of any Google Adwords campaign is keyword targeting. To find great keywords Google offers their own tool called Keyword Planner.

Want to know the best part?

It’s completely free to use! Now you probably want to learn how to use it, right? Good news, I’ll take you through each step right now.

How to use keyword planner

Step 1: Log in to your new Google Adwords account.

Step 2: Navigate to the top right corner and click on the spanner icon. The from the drop down select Keyword Planner.

Step 3: Here you’ll want to “search for new keywords using a phrase, website or category”.

Step 4: Enter your keywords, choose your targeted location and hit get ideas. Keyword planner will get data on how many times people search for these terms each month. And suggest related keywords that you may not have thought about.

Step 5: Analyse the results and pick keywords to target that are super relevant to your business. But consider the number of times that people search for them. To small and you won’t drive much traffic. Also, keep in mind the level of competition and suggested bid.

Step 6: Download the list of keywords into Excel or Google Sheets. Keep a list of the keyword you want to use and save them. You’ll need these later when setting up your campaigns.

There you have it. You know how to use Keyword Planner. There are more advanced strategies that help with the process. I’ll cover these in another guide.

Chapter 5

Setting up your campaigns & Adgroups

After you research keywords that are relevant to your business it’s time to set up your campaigns and ad groups.

This is the MOST important part of a scalable and successful Adwords account.

You might be wondering:

Why is this so important? Structuring your campaigns with long term business growth in mind. And to ensure relevance to people searching in Google will improve results.

If you structure your account by top level product or service categories. And your Ad Groups by related sub-product or sub-service keywords. This is the formula for great success.

Creating campaigns and adgroups

In my experience, the strategy of the single keyword ad groups (SKAG) works. In this approach every ad group has one keyword with with different match types.

By doing this you can make sure your ads are relevant to the search intent of people in Google.

Let’s run with an example from our website:

My core services are SEO, paid search and content marketing. I would have each of these as a campaign in Google Adwords. Then I would break down ad groups into single keyword ad groups based on searches.

Here is an example of the hierachy:

Campaign: SEO

Ad group: Small business seo

Keyword: [small business seo], “small business seo” & +small +business +seo

Ad group: Seo Services

Keyword: [seo services], ” seo services ” & + seo +services

You get it? While I could put these keywords in an adgroup together with some generic ads about SEO services. I can now tailor my ad copy to each of these searches intent. Resulting in a much higher click through rate and lower cost due to better quality score.

Here’s the step-by-step guide for setting up a campaign:

Step 1: Go to the campaign tab and then click the blue + symbol. Then click new campaign.

Step 2: Choose Search Network, then click create your campaign without a goal.

Step 3: Give your campaign a descriptive name. Include search partners and make sure to check NO to adding the display network. You never want to mix search and display together. They are very different and your data will look funny.

Choose your location targeting options, languages, bidding options, budget and ad extensions.

Step 4: Creating our first ad group. Give it a name, default bid, add the keywords.

Step 5: Create our ads.

Step 6: Review and we’re done. Woo!

Chapter 6

Defining Your Google Adwords budget

How much should I spend on Google Adwords? This questions is something I experience with almost every new client.

My answer has two parts:

Part #1: How much can you afford each month? Your budget.

Part #2: Based on your business objectives – what leads /sales/ growth do you want to achieve? The KPIs.

Based on this we can work on setting a budget that will help meet their goals or set new realistic targets.

How to set your Adwords budget

The rule of thumb to work out your monthly budget goes like this:

Your allocated spend divided by 30.4 (spend/30.4). This is because in Google Adwords you can only set daily budgets and not monthly ones.

To work out how much you should spend you need to know your conversion rate. If you know what percentage your campaigns convert customers into leads and sales. Then work out what is a profitable conversion.

Once you work this out you need to understand what the average cost of a click will be. And how many clicks you need to reach your targets.

Based on this you can decide the budget required to hit your goals. I’ve written about this in more depth in a blog on Google Adwords Budget.

Now we can move onto the basics that every single Adwords account MUST Consider.

Chapter 7

Ad Extensions: The hidden gem

Ad extensions, the hidden gem for Google Adwords newbies. While they are well known by most PPC pros the amount of Adwords accounts I take over that don’t use them is crazy.

You might be wondering:

Why should I use them? Well there are 4 reasons that are worth your while:

1 – Take up more real estate in the search results

2 – Improve your CTR

3 – Improve UX by sending people deeper into your website

4 – Improves quality score, in turn lowering cost

Types of Ad Extensions in Google Adwords

Not convinced? You should be. Here’s a brief rundown of the different options available:

Sitelink extension: links to pages on your website other than your main landing page.

Callout extension: shows descriptive text. For example, “get free shipping”.

Structured snippet extension: highlight the specific aspects of your product/service offerings

Call extension: Encourage people to call your business from the ad

Message extension: Encourage people to text your business from the ad

Location extension: Shows information about your business, like your address.

Price extension: Shows the cost of your products and services

App extension: Encourage downloads of your app

Review extension: Highlight third party reviews of your business

Promotion extension: Shows your specials or sales

How to find and set up Ad Extensions:

Step 1: Go to Ads & Extensions (1), then go to extensions tab (2) and click the big blue plus symbol

Step 2: Choose your extension type

Chapter 8

Google Adwords Essentials: The Basics

Every Google Adwords account has core components that MUST be set up.

These include Google Analytics & conversion tracking and landing pages.

Here’s the deal:

Setting these up lead to lower costs, more optimisations and more leads, sales and growth.

Let’s go through them.

Google Analytics & Conversion Tracking

Two things:

#1 If you haven’t already set up Google Analytics on your website, go do it now!

#2 If aren’t tracking goal conversions go do it now!

Real talk, if you’re not measuring performance on your website how do you know if it’s even working for your business?

Explaining Google Analytics and Goal Tracking is a guide of its own which I will get to…

But in this case, we want to use Google Analytics to track when an ad click leads to a conversion on our website.

By doing this we will know which keywords work and which don’t. This helps with optimising our account. And also allocating our budget to the best keywords.

Here’s a resource to help link your analytics to your AdWords and another to help to import conversions from Google Analytics.

Landing Pages

Setting up your Google Adwords and getting people to click on your ads is only half the battle.

Once someone lands on your website to things can happen:

#1 They leave immediately

#2 They stay and read the content of the page.


Do you want to pay for clicks if over 50% of those people leave your website?

This is why landing pages are so important to paid search success.

How would you feel if you searched “Buy Nike shoe’s online”. Then you land on the homepage of a website that sells shoes among many other clothing items for men and women.

My guess, you leave and try click another result. And hope that, you get sent to a page that talks about Nike shoes with the option to buy them.

If you do this with your Adwords you’ll save a lot of money! Here’s how:

#1 Less people leave the website meaning no “wasted clicks”.

#2 You’ll have a much higher quality score to begin with meaning that your average cost per click will be lower.

Here’s an awesome infographic by Unbounce. It details the anatomy of the perfect Google Adwords landing page:

If you set up a landing page like this for your ad groups you’ll see much better results.

Chapter 9

Advanced Google Adwords Strategies For Optimisation

Getting your Google Adwords account setup is very important.

But here’s the thing:

That’s part one. Part two involves optimising your campaigns from the get go and on an ongoing basis.

There are a handful of best practices to apply to every account no matter your industry.

Let’s go through them now.

Location Targeting

Be sure that your targeting locations that your business can service or can sell to.

Breaking down location targeting on a granular level is a great optimisation strategy. And it is often overlooked.

Example, if you operate Australia wide instead of targeting Australia only. Break down your targeting on a state level. You can then set bid adjustments based on performance of each state.

If you’re a state or regional company you can still apply this strategy. Try targeting many towns and suburbs.

You can even try radius targeting. It lets you target a specific kilometers around a location.

Here’s how it’s done:

Step 1: Navigate to your campaign (1), then chose location (2) and click edit (3).

Step 2: Type your location and select “Target”.

Step 3: Choose your bid adjustment.

Ad Schedule

The time of day you serve your ads can be important. Again you need to ask the questions:

What time of day are my target customers searching? Are there times of the day I don’t want to show my ads?

For example, B2B companies might consider showing ads in business days hours only.

Or restaurants that deliver food in the evenings wouldn’t want to show ads early in the morning.

You can set time of the day bidding adjustments in settings tab:

Step 1: Navigate to your campaign (1), then chose ad schedule (2) and click edit (3).

Step 2: Chose the hours you wish to target.

Step 3: Increase or decrease your bid by certain hours of the day.


More than 50% of Google searches take place on mobile devices. That’s huge and it’s an important consideration.


Is your website mobile responsive? Do you want to send traffic to it? Are people more likely to buy on mobile or desktop?

You need to ask yourself these question and adjust you strategy accordingly. You may want to spend more for a click when someone is on the computer than a mobile. Or vice versa.

You can make these bid adjustments in the settings tab:

Step 1: Navigate to your campaign (1), then chose device (2) and click bid adjustment

Step 2: Set bid adjustments by device

Now it’s your turn

You’ve read this comprehensive guide to Google Adwords. Now it’s time to put in place your learning and set up your account.

Leave a comment below if you have any questions more than happy to give you an extensive answer.

Other than that it’s over to you. I hope you enjoyed the guide!