Google Adwords works by advertisers selecting keywords to bid on and when the keywords are searched on Google an auction starts for ads to appear. In the auction, advertisers set a maximum cost-per-click (CPC) they are willing to pay to get a click on their ad. But the highest bidder doesn’t always take the top spot. Google Adwords use something called Adrank to determine which ad will hold the top spot.
There were a lot of buzzwords mentioned above and I will break it all down below. So, hopefully, you can understand exactly how Google Adwords works.
A bid in Google Adwords is the term people use when they are talking about how much they will pay for a click. A maximum CPC is the highest you will pay for a click. However, Google may spend over your Max CPC if you select a bidding strategy that allows them too.
Keywords are a the heart of how Google Adwords works, they are the words and phrases you select that you want ads to appear for on Google. There are several match types to be aware of:
To succeed with Google Adwords you must understand Ad Rank.
Ad Rank is determined by a keywords Quality Score multiplied by the bid. The formula looks like this:
Quality Score * Bid
Ads are then placed in order based on Ad Rank, so the highest Ad Rank will take the top spot on Google.
Quality score is the metric Google Adwords uses to score the relevancy and the quality of your keywords, advertising copy and landing page. Quality Score is on a scale of 1-10, with 1 being the worst and 10 the best.
Your quality score will ultimately decide how much you need to pay for a click. So, if it wasn’t clear already quality score is very important in how Google Adwords works and you must be trying to improve it.