Google Ads Complete Guideline for Running Efficient Campaigns

There are different Google Ads formats available for businesses. We will introduce them in detail below. They all rely on searched keywords.

When online users type queries in the search engine field, Google may return paid ads at the top of organic results. Google charges a certain fee to the advertiser when people click on those ads. We call this a Pay-Per-Click (PPC) model.

This article will clarify how Google Ads works and what are the best practices to run efficient paid campaigns.

Cost Per Click (CPC)

On Google ads, businesses bid on keywords so they can broadcast their messages. The platform classifies the ads competing on the same search terms depending on several factors, including the Cost Per Click (CPC).

To illustrate this, say five companies want their website to appear on the search results page when users type the keyword “Google ad agency.” Each competitor previously defined a CPC for this specific keyword, which is the bidding price they are willing to pay every time a user clicks on their ads.

Based on this bid, the Google algorithm calculates the rank for each ad and returns the results accordingly. The purpose is to pay the smallest Cost Per Click while ranking as high as possible.

Businesses setting their campaigns the wrong way can lose money quickly. Read our pieces of advice below to run cost-effective Google ads.

Quality Score (QS)

Besides the Cost Per Click, the ad ranking also depends on the Quality Score (QS). To simplify, we will start with the following formula: Ad Rank = Cost Per Click x Quality Score

The Quality Score follows a 1 to 10 scale (10 being the maximum). It estimates the ad quality based on the relevancy between the keywords and the ad content.

Other factors that influence the quality score are compliance with Google Ads policies and the user experience of the landing page. For example, the Quality Score will be low if a billboard advertisement business bids on the keyphrase “Google ad agency”, because this keyword is irrelevant to the company’s industry.

Google Ads Ranking

To explain the rankings on Google Ads, let’s update the previous formula as follows:

Actual Cost Per Click = (Ad Rank to beat / Quality Score) + $0.01

The addition of “+ $0.01” means that advertisers do not exactly pay for their bidding amount. They pay the least possible to beat the competitor below.

This system works like auctions except that brands do not know how much others are bidding. Consequently, it may appear that bidding high would be the best strategy to secure the top ad placements. At the end of this article, we will demonstrate it is not the case.

This formula also says that the higher the Quality Score, the lower the companies will pay. If the QS equals 10, then the business controls the auction because Google anticipates that this ad will provide the best experience to users.

In other terms, the company with the highest quality score pays the least and forces its competitors to pay the most. It means that even small companies with a limited budget can make their Google Ads visible thanks to high relevancy and good QS.

Google likes 8-10 Quality Scores because they guarantee suitable content for online users. If people are happy with what they find on Google, they will continue to use this search engine. Google looks for user satisfaction. A good business strategy is to maximize the Quality Score.

To sum up, the key success factors for Google ad ranking are:

Pick relevant keywords matching the business products and services Carefully choose the right bidding that will optimize the budget Craft top-quality ads (content and visuals) for a smooth online experience.

Google Ads Campaign Settings

After choosing the campaign type, advertisers must name it. This is an important step, especially when running multiple ads. The naming convention should be descriptive to avoid any confusion later.

In the campaign settings, businesses must also pay attention to the following sections:

+) Locations Languages

+) Audience interests

+) Budget

+) Bidding

Ad extensions Locations, languages, and audience interests target the users, so Google can deliver the ads to the right people. The budget and bidding determine the reach and ad ranking as well.

The ad extensions allow text ads to look more relevant to online users. Depending on the business industry and campaign objectives, advertisers activate them from a range of different options. To promote a local brand, we recommend considering these ad extensions as a priority:

+) Sitelink extensions

+) Call extensions

+) Review extensions

+) Callout extensions

+) Location extensions

Ad extensions are a great way to differentiate from the competition in Google ad searches. As they do not increase the campaign costs, we should never ignore them.

Note that, starting the 30th of June 2022, Google will automatically create and edit the expanded text ads instead of advertisers. The purpose is to serve online users and deliver useful ads.

Final Conclusion

Follow this guide to run efficient Google Ads campaigns. Tag this article and refer to it every time needed. We reviewed how the platform works, and how to set up a Google Ads campaign structure, and shared a few actionable pro tips to optimize.

The best way to improve Google Ads skills is to keep practising. There is no bulletproof or ideal formula to be successful on this platform. The best marketers are the ones monitoring closely their campaigns and testing their ads.

If you need our team of Google Ads experts to support you, feel free to contact us. Prodima Vietnam is happy to share over 15 years of practice on the Google AdWords platform.