How Google Ads Works

How Google Ads Works

google ads Nov 30, 2022

There are 3 core functionalities of Google Ads that you need to understand for better results in Google Ads.

The first thing that you need to understand about Google Ads is that it is Auction Based. Meaning that when you complete a Google search, Google runs an action to determine the winning ad.

The second thing about Google Ads is that while it is based on keywords and search, Google Ads actually has 4 main types of targeting options which are:

  • Keywords
  • Audiences & Demographics
  • Devices
  • Time of Day & Day of the Week

Meaning that you are able to target people not only on what keywords they search BUT also refine this based on:

  • Their demographics & interests
  • The device they are using
  • And the time of the day or day of the week they are completing the search

This brings us to the 3rd & final core concept in Google Ads that you need to understand, which is regarding Google Ads Bidding & automated strategies.

Ultimately you are running Google Ads to grow your business, so Google has some assisted bidding strategies called maximise conversions or maximise conversion value which allows you to use Google’s automated learning and campaign data to:

  • Increase or decrease your individual bids or daily spend if the data Google has on a user increases or decreases the confidence that Google has for whether this search will result in a conversion.

For example, if you are running a campaign to get more leads for your home moving service and Searcher 1, we will call him Dave, completes a search for “home moving service”, but Dave:

  • Has been searching for new homes to buy in your area
  • Has also been searching for new home loan providers
  • And has recently completed searches for storage sheds in your area

And then you have another search called Sarah, who completes the same search for “home moving service”, but:

  • Has not completed any similar or related service searches recently

Google will increase your bid and spend on Dave’s search because it believes he is more likely to convert. 

Now that is a very rough explanation for one of the more complicated areas of Google Ads. However, if you are new to Google Ads, I suggest using a Maximise Conversions or Maximise Conversion value strategy after generating about 30 conversions in your account. 

And as a general rule, use Maximise Conversions if you are in a service-based industry and Maximise Conversion Value if you are in the eCommerce space.