Google Adwords: How Adwords Creates Online Success

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Today, I begin a series of posts to help you understand and optimize your Google Adwords. If you’ve never used Google Adwords, you should. A good Google Adwords campaign can bring a lot of traffic to your website — and not just any traffic, but targeted traffic buying the types of products and services you sell.

Successful Google Adwords strategy is part art and part science. It involves creating ads in a highly stylized format while exercising care to avoid terms forbidden by Google or violating their format guidelines. This infographic provides a good overview of Google Adwords:

Google Adwords: How Adwords Creates Online Success

It all starts with keywords

I discussed keywords in a recent post on SEO Basics — because they both rely heavily on keywords.

Recall, keywords are really phrases consumers use when looking for information online.  Lets say you’re looking for a dress for a friend’s wedding.  Maybe you prefer specific designers, so you enter the search term: Michael Kors Dresses or maybe you’re even more specific entering the search term: Michael Kors Black Dress.  These are called keywords — even though they’re really phrases.  Google looks through the websites using these keywords and returns a list of websites with a short description of each and the URL (link) that takes you to the website — called SERPs (Search Engine Results Pages).  Now, there are probably thousands of websites using these keywords and Google orders them using the algorithm we discussed in the SEO basics post.

Above and on top of these SERP’s (what we call organic search) are paid search results matching your keyword.  Just as with organic search results, Google orders all the advertisers using similar keywords so that some are on the first page, some the second, and so forth.  Well, a similar keywords strategy works for Adwords — but here advertisers bid for a position in the results.  Rather than showing up based on a complex algorithm, your ad position is determined by a combination of your bid (how much you’re willing to pay for that keyword) and your quality score (which is a function of how useful and relevant your ad might be to searchers).  The higher your quality score, the less you’ll pay for a similar position on SERPs.

So, you can either bid more for the keyword (commonly in terms of CPC or Cost Per Click) or have a higher quality score to show up on the first page of the SERPs.  The infographic shows a good example of where various ads will show up when these 2 factors are changed.  Your actual CPC is a function of how much the next highest bid is, so you often don’t pay the amount you bid.  Google uses a formula to determine your CPC, which is:

Ad rank of the advertiser immediately below you/your quality score + $.01

In fact, when you look at your CPC, you’ll find you’ve paid various amounts based on the query entered by the user and the bids of other advertisers for that keyword.  You can see sample calculations of your CPC in the infographic.

Obviously, choosing your keywords strategically is an important

aspect of using Google Adwords effectively.

Next Post

I know this information on Google Adwords is pretty dense, so I’m going to stop with this short introduction to Google Adwords.  Tomorrow, I’ll post more about how Google Adwords works, then move on to discuss how to optimize your Google Adwords.

This information if pretty dense.  If you have questions about Google Adwords, check out the information available from Google.  Google even offers certification in Adwords, if you really want to master Google advertising.  You can also enter your questions in the comments below and I’ll try to answer them.

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About Angela Hausman

I manage Hausman and Associates, a full-service marketing firm operating at the intersection of marketing and social media. We provide marketing strategy, branding, feasibility studies, market research, and a variety of other marketing programs to mid-sized and large businesses. I teach marketing and social media at several top tier universities including Howard University.

I hold a PhD in Marketing from USF. I live in Alexandria with my 3 kids, 2 dogs, and 3 cats.

If you enjoy my posts, you might also check out my articles in Social Media Mags and on Business2Community website

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  1. Poker of #infographic to learn more about Adwords | ROI Lovers says:

    [...] Source: Hausman Marketing Letter [...]

  2. [...] June 13, 2012 By Angela Hausman, Ph. D. Leave a Comment An earlier post discussed some basics of Google Adwords, so you should read that post, if you haven’t already.  Today, I’d like to more [...]

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