What Are Google Ads? (+ How Do They Work?)

Wanna get your (or a client’s) business in front of literally millions of eyeballs?

Two words: Google Ads.

But what are Google Ads, exactly? And how do they work?

We’ve got some exploring to do together…

What Are Google Ads?

Google Ads is Google’s pay-per-click (PPC) platform. It allows you to plaster your brand (or your clients’ brands) across Google’s massive network—Search, YouTube, Gmail, and millions of partnered websites.

Google Ads come in a range of ad formats, including:

Search Ads

I’m sure you’ve noticed them before, but just in case you haven’t, search ads are the text-based “Sponsored” results that appear at the top (or bottom) of Google’s search engine results pages (SERPs).

Brands use these ads to get their products or services in front of people who are actively searching for things related to their business. Unlike organic results, which are earned through SEO efforts, search ads are paid placements that give businesses instant visibility.

It’s worth noting that search ads don’t appear for every query. Google’s algorithms consider the searcher’s intent and the relevance of an ad’s targeted keywords to decide if your ad is a good fit.

Display Ads

Display ads appear on websites across the Google Display Network and catch eyeballs as people browse the web. Display ads come in a few different formats, including:

• Static images with text (like the above Best Buy ad)
• Animated images (GIFs)  
• Rich media ads with interactive elements  
• And video ads (like the Rivian truck ad)

Unlike search ads that appear when people actively search for specific keywords, display ads are strategically placed on websites based on user demographics, interests, or browsing behavior.

Shopping Ads

Shopping ads showcase product images, prices, and store information directly on the search results page. They are generated from a site’s product feed, which contains details about its inventory.

These visually rich ads stand out from traditional text ads, offering users a snapshot of a product’s key details when searching for relevant items. As my example shows, a search for “nike airs” may trigger a carousel of shopping ads showing Nike Air variants.

For eCommerce businesses, Shopping ads are a valuable tool to increase product visibility and attract potential customers who are ready to buy.

Video Ads

Video ads appear before or during, yup, videos, grabbing attention with sound, motion, and storytelling. On YouTube, look for cues like the “Sponsored” label, a call-to-action, a yellow progress bar, and the infamous “Skip” button to identify them.

These ads go beyond static images, allowing you to showcase a brand’s personality, demonstrate products in action, or tell compelling stories that resonate with viewers.

How Google Ads Work

So, how does Google decide which ads to show?

For search ads, it’s basically a super-fast auction happening every time someone searches. Advertisers bid on keywords, saying, “I’ll pay this much if someone clicks my ad for this search.” That doesn’t mean that ad placement goes to the highest bidder, though. Oh, no. Google also looks at the ad’s quality and relevance to make sure it’s a good fit for the user’s search intent.

Video ads also run on an auction system, but instead of keywords, you’re bidding on placements within or around YouTube videos. You can target specific demographics, interests, or even the content of the videos themselves. So, if you’re selling skateboards, your ad could appear before, mmm, let’s say, a Tony Hawk podcast. Oh, and like with search ads, ad quality and relevance still matter.

Display ads are a bit different. Specific keywords do not trigger them. Instead, they appear on websites across the vast Google Display Network based on factors like user demographics, interests, and browsing behavior. Advertisers can also use retargeting to show ads to people who have previously visited their website or interacted with their brand.

And once you’ve got a killer ad that someone clicked on. Then what?

That’s where your landing page comes in. It’s the final destination, the place where the action happens.

For a landing page to be successful, it needs to deliver on the promise of your ad and give visitors a clear path to take action—whether it’s making a purchase, signing up for a newsletter, or downloading a freebie.

The Benefits of Google Ads

And the benefits, what are they?

First up, traffic. We’re talking about a flood of targeted visitors landing on your website, ready to engage with your brand. Studies show that businesses using Google Ads see an average 80% increase in brand awareness. Not bad.

But it’s not just about eyeballs. It’s about qualified leads. With focused targeting options, you can reach the exact people who are most likely to convert. Say goodbye to wasted impressions and hello to a pipeline chocked full of potential customers.

And the best part? It’s all measurable. Google Ads gives you a front-row seat to the action, tracking everything from clicks and conversions to ROI and ad spend.

Need to pivot your strategy? No sweat. Google Ads gives you the flexibility to adjust your campaigns on the fly. Change your bids, tweak your targeting, or revamp your ad copy—all in real-time. Handy, no doubt.

Google Ads Effectiveness

Okay, let’s get down to the real important stuff—are Google Ads even worth the fuss?

Let’s dissect the numbers so you can make an educated decision:

Cost Per Click (CPC)

• Across the board, Google Ads CPCs average around $1.72.
• Looking to showcase your products? Google Shopping Ads come in at a thrifty $0.66 per click. Some industries aren’t as cost-effective, though…
• Lawyers are shelling out the big bucks, with the legal industry having the highest average CPC at $6.46.
• The medical industry sees an average of $2.62 per click.
• Marketing, software, and real estate also have hefty CPCs, ranging from $2.37 to $3.80.

Click-Through Rates (CTR)

• Google Shopping Ads see an average CTR of 0.86%. Not bad.
• For regular Google Ads, search ads boast a 3.17% CTR, while display ads trail behind at 0.46%.
• Want to hog the spotlight? Ads in the first position on Google search rake in an impressive 7.94% CTR.

Conversion Rates

• Google Search campaigns convert at around 4.40%, while display campaigns lag at 0.57%.
• Shopping Ads convert at a solid 1.91%.
• Overall, the average conversion rate across all Google Ads is 3.75%.

Return on Investment (ROI)

• The average business makes $2 for every $1 spent on Google Ads—a 2x return.
• Although, other sources show an average return of $8 for every $1 invested. Cha-ching!

Other Effectiveness Metrics

• A whopping 63% of users click on Google Ads.
• 90% of consumers say ads influence their buying decisions. (Yep, even when we all claim we hate ads…)
• 43% of users have actually bought something after seeing an ad.
• Google Ads boasts a massive 90% global online reach.

Addressing Your Google Ads Concerns

The word “advertising” can send shivers down any budget-conscious business’ spine.

But hold your horses before you write off Google Ads as a money pit; consider the answers to these two commonly asked questions:

1. “Isn’t Google Ads Too Expensive?”

We get it—your CMO is breathing down your neck, and every dollar spent better have a return address. But here’s the thing: Google Ads gives you control. You set your own budget, and you only pay when someone actually clicks on your ad. Plus, with the right strategies, you can get those clicks for a surprisingly affordable price.

Remember that impressive $8 ROI we mentioned earlier? That’s not a fluke. With laser-focused targeting and optimized campaigns, every dollar you spend is working hard to bring in new customers and boost bottom lines.

2. “I Don’t Have Time to Manage Google Ads.”

Between running your business and juggling a million other tasks, who has time to become a PPC expert overnight? That’s where an expert comes in…

…hello! It’s us, Loganix.

We’re your PPC dream team. We’ll handle everything from strategy and setup to ongoing optimization and reporting so you can focus on what you do best—running your business.

Conclusion and Next Steps

Sure, PPC can seem a bit daunting at first, but don’t let that scare you off. With the right strategy and a little bit of know-how, Google Ads can be your secret weapon for online success.

But hey, we get it. Not everyone has the time or expertise to master the PPC game.

Entertain me as I plug us again—from white-label PPC to full-on management services, Loganix is ready to take the reins and deliver campaigns that convert like crazy.

🚀 Hit up our PPC management services page, and let’s do this thing! 🚀