How Does Google AdWords Work? Everything You Need to Know


On average, Google has over 40,000 search queries every second — that’s 3.5 billion searches every day.

Google is the most popular search engine on the World Wide Web. As such, it’s an invaluable tool when you’re trying to build your online presence and sales strategies. 

If you’re wondering how you can leverage it to promote your business, Google AdWords is your answer. But how does Google AdWords work? We’ll answer all that and more in this guide to Google ad services.

What Are Google Adwords?

Google ad services were launched in 2000. What was once a service that required users to pay a monthly fee to have their ad campaign managed by Google has evolved into something far more sophisticated. Today, Google AdWords is the most popular pay-per-click marketing channel out there.

This service enables businesses to reach their target audience with online advertisements. It is based on the concept of keywords.

The idea is that, when a user searches terms that are associated with what you’re selling, your ad will compete for display on the search engine results pages (SERPs) or other websites. But you might also choose to have your ads displayed elsewhere. Check out this blog for additional options.

Google AdWords gives you full control over your advertising budget. There’s no maximum amount you can pay. You can also choose where your ad will be displayed, monitor how well your ads are doing, and make changes to your campaigns accordingly.

How Does Google AdWords Work?

Google ad services might seem complex when you’re first embarking on a campaign. But it’s actually set up in a way that everyone from newbies to tech pros can understand. We break down the basics of Google engine ads below.


First things first: you need to set up your campaign. Campaigns are set up through your Google account and there is no maximum number you can run at one time.

An important part of this step is choosing where you want to run your campaign. This is called the campaign type. There are four campaign types to choose from:

  • Display Network places your ads on websites, YouTube, and other parts of Google’s Display network
  • Search Network places your ad on the SERPs
  • Search Network and Display Select  your ads will appear on a combination of the Display and Search Networks
  • Shopping Network — these ads are product listings that appear as part of the Google Merchant Center

The campaign type you choose determines where your ads will show on the Google network. 

The Auction

Every time a user types in a search query, Google runs an auction in the background. This auction system determines what Google search ads will show and where.

The auction is based on keywords. These are determined by the advertiser. They’re a list of words or terms related to your product or service — words you think people would use when searching for something relevant to your business.

Another aspect of the auction is the bid. You bid on keywords based on how much you’re willing to pay for a user to interact with your ad in some way. We’ll explore this more in the next section.


You choose a bidding strategy based on the way you want a user to interact with your ad. Below are three of the most common bidding strategies.

Cost-per-click — When someone clicks on your ad and goes to your website, you’re charged a small fee. This fee is based on what you’ve set as the maximum you’re willing to pay for someone to click on your ad.

Cost-per-impression — With this bidding strategy, you pay for the number of times your ad is seen. You pay for every 1,000 times your ad appears in a visible place.

Cost-per-acquisition — This bidding strategy isn’t recommended for beginners. It involves setting the maximum amount you’re willing to pay for a conversion. A conversion can be a sale, an e-mail sign up, or any other action you wish to get from the user.

Your bid, along with your keywords, play a big role in whether your ad will appear. But another aspect of this is your Quality Score.

Quality Score

In order for your ad to reach the target audience, you need to make sure you’re setting the right bid and using the right keywords. But more importantly, you need to have a good Quality Score.

Google likes to provide the most relevant information to its users. Your Quality Score is a way for Google ad services to measure how useful your ad is to the user. A high-Quality Score combined with an optimized bid will give you the best chance at getting selected in the auction and being placed in an ideal position.

So what makes a good Quality Score? Keep in mind the following:

  • The relevance of your ad to the terms being searched
  • The relevance of your ad to the where it takes the user (ex: the landing page)
  • The relevance of the keywords used to your ad group

But the historical performance of your ad group and your account are also big factors to remember. The better you get at keywords and bidding, the better your account will perform in general.

How Much Do Google Engine Ads it Cost?

Your Google AdWords costs will vary depending on a number of different things. Your geographic location and your industry are two big factors that affect costs. But you’ll also pay depending on how competitive your keywords are and how well you run your advertising campaigns.

Keep in mind that your Quality Score has an impact on your costs. Because it’s important to show the most relevant information to users, Google rewards advertisers that have higher Quality Scores with lower costs.

Other Ways to Promote Your Business

So how does Google AdWords work? With a little trial and error in terms of setting up your campaigns, optimizing your keywords, and using the right bidding strategy. But Google ad services aren’t the only way to get the word out there about your product or service. 

For more information on how to promote your website online, check out our blog. We’ll teach you more about search engine rankings and why they’re an important aspect of getting yourself out there.