In my previous posts, I explained why you should use Google AdWords and how to set up and structure your Google AdWords campaigns, and now it’s time to understand how the AdWords system works, so you know how to get the best results from it.

Most new AdWords users think “well, I only pay anything if my ad gets clicked on so it doesn’t really matter how good it is”. True, but Google only earns money if your ad gets clicked on, so if your ad isn’t a good relevant one that gets a good number of clicks, Google won’t like it and it won’t show up in good positions very often, if at all.

How the bidding system works

Let’s say your ad has appeared 1,000 times (known as ‘impressions’ in AdWords) and you have received 10 clicks. That gives you a clickthrough rate (or ‘CTR’) of 1%.  And let’s say your maximum bid is £2.00 per click. This will mean that for every 100 times your ad appears, you will get one click, earning Google £2.00. So, on average, Google will earn 2p each time your ad appears.

And let’s suppose you have a competitor with a clickthrough rate of 3% on his ads, but he’s only willing to pay 75p per click. For every 100 times his ads show, it will get 3 clicks, earning Google £2.25, so on average Google earns 2.25p every time your competitor’s ad shows (compared to your 2p). So, despite his lower bid price, Google will favour his ad over yours, and he’ll pay less than you for a better placed ad.

So your goal should be to write really relevant ads that get a high clickthrough rate. There are other factors that Google considers, but this is just a beginner’s guide, so I won’t complicate things at this stage. Even with these few basics though, you now already know more than a lot of first-time advertisers.

So how do you write ads that perform well in Google?

You’re well on your way now if you have split out your ad groups as described in my first post, with very specific ads for each, instead of one generic one. Some other quick tips to use are:

• Include ‘negative’ keywords – these will stop your ads showing if certain words are keyed in. For example if you’re a financial adviser you’d want to exclude people who want to train as a financial adviser so you could use ‘course’, ‘train’ and ‘qualification’ as negative keywords. ‘Free’ is always a great negative keyword in pretty well any market.
• Include keywords in the ad – your ad will draw people’s attention to it if they see the keywords they have used actually appear in the ad – especially in the headline.
• Include benefits, not features – say what benefit your product or service delivers to customers, not just what it is. For example, if you’re a financial adviser and you will travel to meet clients, stress the convenience of it in your ads.
• Use highly relevant landing pages – link your ads to highly relevant pages, as Google will also assess the relevance of your landing page when deciding how prominently to show your ads. If a lot of people click your ads, but hit the back button quickly to see the results again, Google will track this and it will count against you.
• Split test ads – if you’re not sure what words your customers respond to – do some tests. Google lets you write multiple versions of your ad and split test them to see which gets the most clicks. Test regularly to see what your customers like.

So that’s the end of this 3-part series on the basics of Google AdWords. If you want to start with a small budget and need to make the most of it, these basics will help you to get started.

There is much more to AdWords than what I’ve mentioned here, so as your advertising takes off, you might want to consider outsourcing your AdWords campaigns, but in the meantime, good luck with getting your campaigns off the ground!

By Rob Watson of www.clicktosale.co.uk

This is the final part of a three-part-guide to Google Adwords