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AdWords is Google’s pay-per-click platform displayed on the very top and bottom of Google’s search results. It generates approximately 20% of all clicks in a given search query (percentage is an estimate and not officially disclosed by Google) from all results, both paid and organic. In a different page, we delve into what it takes to build a great AdWords campaign structure.

AdWords is considered the most effective inbound marketing channel, which is when the user is looking for us. Outbound marketing, on the other hand, is when we are looking for the prospective customer and do so by sending letters, postcards or advertising in social media channels. Inbound marketing, in most cases, yields a greater return on investment than outbound channels.

Google matches the search query with the keywords present in the AdWords’ advertiser keyword pool. If a match is found, Google will run an algorithm aimed at determining relevance and quality, also known as the keyword quality score, alongside the bid placed by the advertiser. Since there is only room for up to four adverts on top of the search results and up to two below them, the algorithm will determine which 6 keywords have the highest quality score. AdWords will then place their corresponding text ads in the search results page accordingly.

The user has now an option – or better yet, up to 17 in the first page. 4 ads on the very top, followed by 10 organic results followed by up to three additional text ads on the bottom of the search results page. If Google deems the search query to have local intent, a map with up to three local results will be placed in between the top ads and the ten organic results. Although no official percentages have been disclosed, it is estimated that up to 20% of all Google users click on the text ads, 35% do so on the local results whenever present, and the remaining 45% click on one of the organic results. Given how completive are many industries, ranking in one of the ten organic results is many times a lengthy and arduous process. Google AdWords provides for an immediate solution since the text ad can rank on top of them as soon as campaigns are created.

Finally… this someone visits the website and gets to buy

When a user clicks on an ad, s/he is redirected to the advertiser’s website and is now a potential lead who can buy the product or service the advertiser has to offer. When this happens, and if the cost of the clicks that take for a user to buy is less than the product’s price tag minus the margin, the advertiser has a positive return on the investment.

To sum up, Google AdWords makes for an excellent channel to drive more traffic and acquire more users for all companies, big and small. It is important to optimize the Google AdWords campaigns to ensure a positive return on the investment.

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