Basic Guide to Google Adwords


Adwords Basics

Over the last few years the major internet search engines have evolved beyond basic search engines to provide incredibly sophisticated advertising services. These services are known as Search Engine Marketing (SEM) and they allow any business of any size to promote its products or services to the world. The leader in the search engine market is Google, with a global average market share of approximately 75% and their SEM package is called Google Adwords.

As a growing number of business owners become interested in promoting themselves online and I get the same questions time and again, I thought it might be useful to provide a basic Q&A of the main aspects of Adwords.

Google Adwords Q&A



Now more than ever, people are turning to Google to find businesses that provide the products or services that they are looking for. They type in a search phrase (known as a ‘keyword’ or ‘keyphrase’) and then Google looks through its database and displays all the relevant websites that match the keywords that were typed in.

Using a Google Adwords campaign allows businesses to place simple adverts (known as ‘sponsored links’) above or alongside the normal list of websites (known as the ‘organic’ list), which allows interested and pre-qualified customers to click on an ad and visit your site.



There are many reasons why businesses should use Adwords, but the three main reasons are as follows:

  1. It allows you to reach a highly targeted customer base in any geographic region. So you can target Ireland, or both Ireland and the UK. Or, if you have a product that will appeal to the Spanish market for example, then you can target just Spain or even specific areas of Spain.
  2. To supplement your website’s own search engine rankings. Realistically, even the best designed websites can only rank well with a dozen or so keywords or phrases. But with Google Adwords there’s no limit to the number of keywords you can target and so your site can be promoted against an almost limitless list of keywords.
  3. If you have a product or service that you want to offer globally or to specific overseas markets, then Adwords is absolutely ideal. No other advertising medium allows you to target overseas customers in such a simple, flexible and cost-effective manner. Even individuals with a holiday home could place a private adwords ad to rent their property to tourists if they so wished!



The rules for whether you should advertise with Adwords are no different to whether you should advertise at all. Businesses that provide mainstream products and services will do very well from adwords, but ironically business with niche products or services can benefit even more from an adwords campaign. As a rule of thumb, businesses that are focused on attracting a very local customer-base (barbers, hair-dressers, small local retailers) would not benefit from an adwords campaign.



The Adwords program is very clever because instead of paying for an ad to be shown (like most other forms of advertising), you only pay when a viewer clicks on your ad and visits your website. This type of web marketing is called “Cost-Per-Click” advertising (CPC for short).

Once you have registered to start using Adwords the process for creating, displaying and paying for ads is broken down into 4 main elements as follows:

  1. Keyword Selection
    You create a list of words and phrases that would be typed into the Google search bar to find your company, service or product.Don’t worry – Adwords provides a very advanced tool that helps determine what the keywords and phrases should be.
  2. Cost-Per-Click
    You decide how much you want to pay for each click through to your site. This can be done globally or by keyword. This figure is used for two purposes:Firstly it is used for the payment mechanism for each click you receive, but it is also used to determine where in the list your ad will appear. This is basically a bidding system, where businesses that bid the most for position are placed higher than those who bid less.It’s not quite as simple as that, because there are other factors involved, but in simple terms just remember that if you want to be at or near the top of the list you need to bid high. Don’t worry, the system provides a lot of help by showing you where your ad will appear for each keyword based on your bid and you can then adjust accordingly.
  3. Daily Budget
    You will setup your daily budget, which will determine the maximum that you want to spend per day.Let’s say that your average CPC is €1 and you have a daily budget of €10, in this case you will receive up to 10 clicks per day. After this the Adwords system will automatically shut-off your ads. There is a lot of flexibility that allows you to determine when you do and don’t want ads shown in order to maximise your budget.
  4. Ad Creation
    When you create your ad you are asked to provide a headline, the ad contents, a link to your site and finally a ‘friendly’ link. The friendly link is what the viewer sees, whereas the actual link is the full link to the ‘landing’ page. You only get 30 characters per line (including spaces), so your ads need to be very creative, yet concise!



If you’ve ever used the Google search engine, then you will have seen these ads.

They are typically shown on the right-hand side of the search results page, but can also appear above the ‘organic’ or naturally ranked search results.

A typical ad would look like this:




How Google Provides a Great Deal of Feedback 


Unlike any other advertising medium, with Google Adwords you can easily review the performance of your ad(s), and the whole campaign overall. This is all done through the Adwords web interface. Once you have created an account and one or more ads, after only 24 hours you will be able to see a whole host of information on them.
Fig 1 - Campaign Performance Overview

Fig 1 – Campaign Performance Overview

The details in Fig. 1 show a snapshot of a small campaign that I run. The graph shows the number of clicks by day over a period of 8.5 days. Beneath this is indicated that I received 79 clicks in total and that the ads were shown 1,722 impressions. This gives me a click-through rate of 4.59%.

Let’s pause at this point to review what’s so important about click-through rate. Google considers anything below 0.25% as poor and most advertisers should be aiming for anything between 1% – 10% on average (depending on what they are advertising). The click-through rate is an indicator of how appealing your ad is, but it is very important to remember that if you are achieving a very high click-through rate but you are not seeing actual revenue return, then your ads are too generic and are attracting entirely the wrong visitors!

The ‘Average CPM’ shown in Fig. 1 is the cost per thousand clicks and for some advertisers this is very important. The ‘Average CPC’ is your average cost-per-click, which helps you define your overall daily budget. For instance, my CPC is €2.28 and my daily budget is €20. This means that I am limited to between 8 and 9 clicks per day maximum before my budget runs out. Finally we see the total cost for the campaign over the 8.5 days that it was running.



You can also drill into each individual ad to review more detailed data.


Fig 2 - Performance by Ad

Fig 2 – Performance by Ad


In Fig. 2 we see a snapshot of my Logo Design ad. This page breaks down the detail by keyword. You can see how much I am bidding, as well as all the same data as shown in the summary page. Take note here that some of the keywords are generating a click-through rate of 33%. However, another interesting statistic shown is the “Avg Pos”, which shows that my ads are being shown on average between position 1.4 and 2.0 on the page.

There is much, much more that can be tracked, but if this is all you tracked, then you would already be doing well.



Google Adwords is an incredibly versatile and powerful advertising medium, but like any other advertising medium the most important figure to track is your revenue return. If Adwords is not delivering a return, then your ads may not be setup correctly or Adwords may not be a good choice for you.

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