Google AdWords

In order to generate new customers for a website, there exists the possibility to place paid ads in search results in addition to search engine optimization (optimization of the technical and website content components). This is done through special paid programs offered by search engine operators. Google AdWords is a paid program that allows ads to appear in Google Search results. The paid ads are displayed above the organic search results (left column) as well as on the right side of the results list. In professional jargon, such programs are also called “paid inclusion.”

Google AdWords is a web-based platform that allows advertisers to place online advertising in the form of text ads, banners, or Product Listing Ads on the Google Advertising Network. Google AdWords is currently the largest online advertising network in the world. Google generates its profit almost entirely through Google AdWords.

History and background[edit]

The history of Google AdWords is closely linked to Google’s corporate history. For two years after the Google search engine was founded, it launched its own advertising platform on the market. When Google AdWords was finally launched in 2000 as a beta version, the still young Google company earned a lot of criticism, since it was initially started with the promise of remaining ad-free. As we know now, they did not stick to that. Today, Google AdWords revenue makes up the company’s high profits almost exclusively. The extent to which the financial interests of the company take precedence over ethical aspects became clear again in 2013 when Google tested placement of banner ads on the SERPs.

Back to history:

Shortly after its market launch with less than 500 advertisers, the AdWords system developed so well that the group was able to terminate the beta phase and launched a released version. In the following years Google AdWords was expanded with further language versions. By 2004, German, Chinese, Spanish, and French were added. The number of advertisers who used Google AdWords rose exponentially as did the advertising revenues.

In 2006, Google AdWords changed the usage mode of its own API to a paid model. At the same time, the official AdWords blog was set up. It is still called “Inside AdWords.”

A milestone in the development of the platform in 2008 was the introduction of ads specifically targeted for specific devices, for example, Apple’s iPhone. In the same year, Google also adapted its advertising and quality guidelines for ad copy and keywords.

Four years later, YouTube was also integrated into the large advertising network. This step enabled advertisers to place video ads as well. 2012 was also the year when Google established the AdWords targeting options.

The most recent major development step was the product listing ads (PLAs) introduced in 2013. Since then, listing on Google Shopping is a paid service for e-commerce retailers. At the same time, the Google Merchant Center has been given a central role in managing the product catalog for the PLAs, which are now being controlled by the AdWords system.

The ongoing expansion of the company portfolio suggests that Google AdWords will undergo further important adjustments in the coming years. Thus, it can be assumed that TV commercials can be placed on Google TV, or other multi-channel ads will be possible.

How it works[edit]

Google has basically aligned the AdWords platform according to Bidding Procedure, which is typically based on the CPC method. This means that advertisers submit a bid for a specific keyword that users type in the Google Search. The advertiser has placed an ad or banner to match this keyword. The advertiser competes with other bids on this keyword.

Finally, Google controls the ad placement according to various criteria and factors. A high click-through bid usually has higher chances to be placed prominently on the advertising spaces next to, above, and below the organic search hits.

The actual ad position for a particular keyword can depend on the following factors:

  • Click bid or click price: Depending on the industry, clicks for keywords can range between 10 cents and 10 dollars.
  • Keyword quality factor: The quality factor is used to determine how relevant the keyword is relative to the landing page. The Google system also analyzes the likely click-through rate and the target-site experience. There are therefore three factors that determine the quality factor.
  • Competition: The more competitors who bid on a relevant keyword, the higher the click price.
  • AdWords account history: The AdWords account history can also be included in the price calculation per keyword. Accounts that never update their keyword lists and don’t optimize their ad groups usually have a disadvantage.
  • Audience targeting: Targeting options can also vary the click price. For example, if the keyword is too broad and is intended for cross-regional ad placement.
  • Display form: When display ads are controlled through keywords, the click price may be higher than for a purely text-based ad placement.

Establishing an AdWords account[edit]

A Google AdWords account usually has a clear hierarchy. Campaigns will be created at the top level. This is where advertisers have the opportunity to specify the daily budget and targeting. Other ad placement methods can be set up. Several campaigns can be created per AdWords account.

A campaign itself consists of ad groups, for which relevant keywords are stored in the system.

It is important that the campaign budget can only be specified within the campaign settings. If only certain products are to be targeted, it is generally worthwhile to create several campaigns for better budget distribution.

It is also recommended to follow the structure of the advertised online store or the advertised information webpage when creating the campaigns.

AdWords campaigns can also be managed and organized offline with the Google AdWords Editor.

Possible forms of advertising[edit]

Google Adwords offers advertisers different ad formats, which can be adapted to their marketing activities. All ads are checked by the system before being placed. These advertising formats are briefly sketched here:

  • Text-based ads: These two-line ads are the classic Google AdWords ad format. They consist of a title, ad copy, and a displayed link. The title contains 25 characters, the ad copy a total of 70 characters (evenly distributed on two lines) and the displayed link 35 characters. Special characters cannot be used in the ad text. Exclamations or question marks may occur only once.

AdWords ads appear next to, above or below Google’s organic add-ons, above Google Image Search, and publisher sites from the Google AdSense network.

  • Banner ads: These image ads can be placed on the Google Advertising network and appear on partner websites that are registered for Google AdSense. Permissible file formats are GIF or Flash files. Banners can be created either with your own tools or using the AdWords tools.
  • Video ads: Advertisers can advertise with their own video clips or YouTube movies on YouTube or with individual clips or channels.
  • Product Listing Ads: These are theoretically classic image ads for products. Such display ads consist of a product image, product title, price and possibly a short ad slogan or reference. What’s new is that customizing is not done through the ad itself, but must be done in the product lists that the advertiser uploads to the Google Merchant Center. The AdWords account merely serves the purpose of determining which product groups or products are to be displayed.
  • Dynamic Search Ads: These search ads are not set up and written in advance, but are dynamically created by the AdWords system. Such ads are based on the contents of the advertiser’s web pages.
  • Click-to-call: This option allows users to call the company with just one click. For example, the desired destination telephone number can be added for text ads.

Advertised products[edit]

Advertising with Google AdWords is subject to specific country-specific regulations. For example, weapons, tobacco or intoxicants may not be advertised via the AdWords platform. Similarly, restrictions apply to products that are intended only for adults and alcohol.

More stringent restrictions also apply to online pharmacies, who first have to submit their license to Google before they are allowed to place ads for medicines after verification. These strict guidelines have a very practical background. For example, in 2011, Google had to pay half a billion dollars in penalties because the company had admitted ads from Canadian pharmacies, but this was not allowed in the US.

There are also strict restrictions when using brand names. Anyone who wants to advertise and use the brand must apply for a derogation and obtain specific permission from the trademark owner.

The lack of use of brand names can have a detrimental effect on ad placement and result in much higher click rates.

Example: How should I create a text ad for the Apple iPhone, in which neither the protected terms “Apple” or “iPhone” may be used?

Billing methods[edit]

The most popular billing method for Google AdWords is CPC, similar to most for SEA campaigns. However, other billing modes are possible depending on the campaign type and targeting:

  • CPA: The prerequisite for this billing method is that the conversion tracking tool has been set up. With that in place, either the highest-possible CPA or target CPA can be specified for each ad group, based on which Google will then automatically use the campaign budget. However, a mixed form is also possible.
  • CPM: The classic billing method for banner ads can be used for Google display or video ads.

The advertiser then pays his invoice either when a previously determined level has been reached or at a monthly rate.

Keyword options[edit]

There are three different options for the keywords:

  • Exact match: In this case, the searcher must enter the keyword exactly as it was specified in order to trigger the ad placement.
  • Broad match: Modified word forms are used with this ad placement method, for example, through stemming in order to trigger the text ad.
  • Matching phrase: This will also trigger ads when the keyword appears within a larger word group.

In any ad group, advertisers can also work with negative keywords that are not supposed to be included as part of the keywords which trigger the advertiser’s ad placement. This may be important when the “matched phrase” option is selected for a keyword, but the advertiser does not want their ads to show when keyword and other brands are entered. Campaign settings can also specify whether related terms and spellings should be considered.

Placeholders can be helpful for ad placements. You can put placeholders within the ad copy and title pages. The corresponding keyword is then used for the ad placements. The use of placeholders is particularly recommended for campaigns with large keyword sets. Below is an example using the combination of “SEO Services”:

  • {Keyword: Standard} contract: The keywords are usually in lower case.

In other words: seo services contract

  • {KeyWord: Standard} contract: Only the first letter of the first word is capitalized.

In other words: Seo services contract

  • {KEYWord: Standard} contract or {KEYWORD: Standard} contract: The initial letters of each word are capitalized.

In other words: Seo Services Contract

  • {KEYWord: Standard} contract: The first word is fully in uppercase and the first letter of the second word is capitalized.

In other words: SEO Services contract

  • {KeyWORD: Standard}: The first letter of the first word is capitalized and the second word is in upper case.

In other words: Seo SERVICES contract

Through the use of placeholders, accents can be placed in the ad copy and titles.

Targeting with Google AdWords[edit]

The AdWords system also allows differentiated targeting. This has been used since 2013 regardless of automatic keyword and ad options.

The following targeting options are possible:

  • Regions: All ads can be delivered worldwide or regionally restricted.
  • Languages: This choice allows you to limit AdWords ads to specific language regions.
  • Devices: Text or display ads can be specifically targeted for mobile devices, desktops or both.
  • Age groups: Display ads can target age groups.
  • Time of day: All ads can be limited or extended to specific days or time of day.
  • Placements: Specific sites or apps can be selected from the Google Advertising Network for display ads.
  • Interest groups: Display ads can also be aligned according to the interests of the users. Google will then automatically find matching placements.
  • Affinity categories: Google summarizes possible topics that can be linked to the main topic. Again, the appropriate placements are automatically selected.

Retargeting has a special position within Google AdWords because it requires linking to the Google Analytics account and tracking code adjustment. Next, specific retargeting goals are set in the Analytics account, which can then be accessed in the AdWords Retargeting Campaign account. You can also use RLSA for retargeting.

Google AdWords Editor[edit]

The Google AdWords Editor allows advertisers to edit and manage campaigns and ad groups, as well as complete keyword lists on their desktop. The editing and optimization can be done offline and then all changes are uploaded to the appropriate account. The advantage of using the editor is that many different accounts can be edited and maintained.

More tools[edit]

  • Display Planner: This tool helps in planning and creating banner ads.
  • Keyword Planner: You can identify new keywords and ad groups with this tool. Moreover, assessments of costs and traffic can be obtained.
  • Conversion Optimizer: If the advertiser has previously activated conversion tracking and the AdWords system has collected enough data, campaigns can be managed through the Conversion Optimizer. Google will then place ads according to the average CPA or target CPA.

Linking to Google Analytics and the Google Merchant Center[edit]

Your Google AdWords account should be linked to your Google Analytics account. AdWords campaigns can then also be evaluated with Analytics. Moreover, retargeting goals can be defined with Analytics. Linking to the Merchant Center makes the use of PLA possible in the first place.

Google AdWords advantages[edit]

The Google AdWords system offers many advantages if you know how to use it. You can prepare and launch online advertising relatively quickly. In addition, campaigns can be controlled, paused or started by you. This provides a high degree of flexibility in advertising. Furthermore, reasonable cost control is possible and there are numerous optimization options to reduce long-term advertising costs.

Google AdWords is a kind of “start-up” aid for young online stores that are still receiving little organic search traffic, in order to receive visitors at all.

For agencies, Google AdWords is a great way to stand out. Google offers free Google AdWords certifications. The advantage as a partner is also the fact that several customer AdWords accounts can be managed via a central customer center. You can also generate reports for evaluations in the customer center.

Below is a summary of the essential features: 

  • Reach of relevant users

Users who specifically search for a product can be reached with search engine advertising.

  • Cost control

A maximum Google AdWords budget can be specified which should not be exceeded. If the budget is exhausted, ads will no longer be placed.

  • Transparent evaluations

Extensive reports on the performance of placed ads provide a good basis for analysis and optimization.

Google has a very large network of partners (see also Google AdSense) Use of this channel can be a great advantage for advertisers. Google AdWords ads can be shown in three areas:

  • Directly in the Google search results
  • On the Google Display Network (GDN)
  • With search partners as placements

Click fraud[edit]

Google AdWords campaigns can be manipulated by third parties with click fraud. For example, by automatically generating ad clicks which do not represent interested users. As a result, the advertiser’s daily, weekly or monthly budget is reached more quickly, and ads will no longer be placed from that point onwards. The low number of actually interested visitors also reduces the ROI of the campaign.

Benefits for SEO[edit]

Google AdWords is not a relevant criterion for a good Google ranking. Google also repeatedly asserts that there is no connection between good rankings and the use of AdWords.

However, an indirect effect can be established theoretically. The more traffic you get from AdWords, the more data Google will get about visitor behavior. It does not matter whether the visitors get to your website through AdWords ads or organic search hits. For example, if visitors come to your site via Google AdWords and keep the CTR or bounce rate low, Google will get an indirect indication of your site’s quality. As a result, Google AdWords is likely a supporting factor for the assessment of a site by search engines. Of course, this would require a successful AdWords campaigns.

The brand, in this case the name of an online store or a website can be strengthened. As a result, the number of direct-type-ins and trust will increase. The increased popularity may also increase the number of external links to the website in a natural way.