How Does Google Ads Work?

If you want your business to stand out online, you must appear on the first search engine results page (SERP). More than 99% of clicks go to those results, leaving less than 1% for the sites on page two and beyond.



Google Ads is the quickest and most straightforward way to appear on the top of page one. Google shows at least one ad on most searches with commercial intent — searches that indicate the viewer wants to buy something, like "auto parts" or "cheap oil changes."

Those consumers are ready to act and an ad drives them directly to your website. So, how does Google Ads work, and how can you make the most of it? Here's what you need to know.

Do Google Ads Really Work?

Yes, Google Ads works! If it didn't, we wouldn't put our reputation as digital marketers on the line by using them with our clients.

Remember, ads appear for commercial intent searches when someone actively searches for products or services they need. They have a problem, and they want someone to fix it. 

Your ads will show up only for search queries that match your chosen keywords. Keywords are words or phrases that someone searching for your business might use. For example, if your ad announces an upcoming tire sale, you might select keywords such as "affordable tires" or "when to buy new tires." 

Google even offers data, such as click-through rates and view numbers, so that you can assess ad performance. This information is available in your Google Ads account and helps you to optimize ad copy, bid structure, and other elements of your strategy. 

Types of Google Ads

If you're one of the 89% of the U.S. internet users who search on Google, you've probably seen a few Google ads. There are three major types, each reaching customers differently.

Search Ads

As we mentioned earlier, search ads appear at the top of a SERP for relevant keywords with buying intent. Your ad only shows up if a user’s search query matches one of your selected keywords. 

You choose relevant keywords and/or phrases when you create the ad. You can also indicate whether the match needs to be exact, or if it can be a version of your selected words or phrases. 

There are three matching levels:

• Exact match: The search term means the same as your keyword, even if the words differ slightly. For example, "tire repair" would match the keyword "tire service."
• Phrase match: The search term includes your search term's meaning. "Shop that fixes tires" would be a phrase match for "tire service."
• Broad match: The search term relates to your keyword's meaning and context. Broad matches for "tire service" could include "fix my flat" or "have a flat."

Google also lets you select negative keywords, which are words or phrases you explicitly don't want to show up. Negative keywords are helpful if certain search intents don't match what you offer.

For example, say you offer auto repair services from Monday to Friday. If someone specifically searches for "car repair open Saturdays," you're unlikely to land that client. You might exclude "Saturday" or "weekends," so you don't pay for someone to click your ad, only to navigate away when they find out you're closed on Saturdays.

Display Ads

Search ads effectively target actively interested buyers. But you don't want to stop there. Display ads let you promote your products or services to people who are likely to be curious, even when they're not searching for you.

Display ads appear on websites, apps, and videos that are part of the Google Display Network (GDN). The GDN includes over 2 million search network properties, including Gmail and YouTube, and reaches over 90% of the world's internet users. That's a lot of potential eyes on your ad campaigns.

Google matches your display ads based on audience demographics or interests. Demographics are facts about a person, such as their age, gender, and parental status. You can choose one or more demographic categories to target, based on who your typical customers are.

You can also give Google keywords describing your audience's interests. For instance, if you run an auto parts shop specializing in vintage models, you might target interests like "car restoration" or "classic cars." Google would run the associated ad on websites related to those topics.

Shopping Ads

Google Shopping Ads appear when someone searches for a specific product, such as "high mileage oil" or "wiper blades." They feature the following:

• A high-quality image
• A price
• A star rating
• A link to the product
• The merchant's business name

Shopping ads encourage clicks because they include images, and appear near the top of the search page.

How Much Do Google Ads Cost?

Google Ads costs vary significantly between campaigns and ad groups. Most Google Ads are pay-per-click (PPC), so you only pay when someone clicks on your ad. Display Ads also let you pay for views or specific user actions, such as booking appointments on your landing page.

All pricing structures use a bidding system. You set your maximum bid, which is the most you're willing to pay for a keyword. 

Cost per click (CPC) varies by industry and search query. According to Search Engine Journal, automotive services keywords cost an average of $3.06 in 2023, which is relatively middle-of-the-road compared to other service industries.

Google considers your bid as part of your Ad Rank and compares that rank to other potential ads. Ad Rank also includes factors such as ad relevance, ad quality, and landing page experience. A high-quality score gives your ad a better chance of running and getting placed above competitors.

Many factors play into CPC and bidding strategy, and Optimize is here to help. We work with clients to understand their goals for Google Ads and find budgets that meet those goals without breaking the bank.

Manage Your Campaigns With Optimize

Google Ads offers a variety of options to suit business owners' and marketers' goals and budgets. Whether your campaign includes search, display, or shopping ads, or a combination of the three, Google helps you reach people with an active interest in your offer.

You've now learned the answer to the common question, "How does Google Ads work?" But the job is far from over. An effective Google Ad campaign needs active budget and bid management, campaign design, and results tracking.

Optimize can help you create ads that work without destroying your budget. To learn more about how we can assist you with managing your Google Ad campaigns, contact us today.