A Comprehensive Guide to Google’s Pay-per-click Advertising

Key takeaways: 

• Unlike organic search, paid Google search ads allow your business to appear instantly at the top of Google search results for specific keywords. 
• With Google Ads, you set your budget, choose who sees your ads (through targeting options), and only pay when someone clicks. 
• Regular monitoring of key metrics (like impressions, clicks, CTR, conversions, and quality score) and adjusting based on performance data (e.g., refining keywords, improving ad copy, adjusting bids) is essential to maximize effectiveness and ensure your ad spend is efficient. 

Are you confused about how to advertise on Google? Are you worried that it’s too expensive for your small business? Learning the ins and outs of Google advertising can seem super complicated. Plus, as a busy business owner, you have so much on your plate already that it may seem impossible to fit in with one more thing. 

We’re here to tell you that advertising on Google is not as hard as you might think. But first, let’s take a look at why advertising on Google is so important for a small business.

What are paid search ads? 

Paid search ads are basically like buying a top spot on Google (or other search engines) when people search for something related to your business. Instead of waiting to naturally show up in search results (which can take a long time), you pay to be seen right away. 

Let’s say you own a shoe store. When someone types “best running shoes” into Google, you want your store to be the first thing they see. Paid search ads make that happen. 

Let’s better understand how it works by understanding the items below:  

• Pay-per-click (PPC) 
• Google Ads 
• Targeting 
• Visibility 

Pay-per-click (PPC) 

PPC is the fundamental pricing model for paid search ads. As the name suggests, advertisers only pay a fee each time someone clicks on their ad. So, if your ad shows up a thousand times but no one clicks, you pay nothing.  

This means you’re paying for actual engagement, not just for the ad being displayed. This model makes it a cost-effective advertising method, as businesses only incur costs when a user shows interest by clicking through to their website or landing page. 

Google Ads 

Google Ads or Google Search Ads (formerly Google AdWords) is the most popular and widely used platform for creating and managing paid search ad campaigns. It’s like your control center for advertising on Google.  

It allows you to bid on keywords and phrases relevant to your products or services. So, when a user searches for one of these keywords, Google’s system determines which ads to display and in what order through an auction-like process.  

Here’s how the ad “auction” works: 

1. You pick keywords. Tell Google what words or phrases people might type when looking for your products or services. For your shoe store, that might be “running shoes,” “buy sneakers,” or “athletic footwear.” 
2. You bid. Let Google know how much you’re willing to pay each time someone clicks on your ad for those keywords. 
3. Google decides who gets the top spot. When someone searches, Google quickly looks at all the businesses that want to show an ad for that search. It doesn’t just pick the highest bidder. Google also looks at: 

• How good your ad is. Is your ad text clear and inviting? Does it actually match what the person is searching for? 
• How good your website is. When someone clicks your ad, do they land on a page that’s helpful and relevant to what they searched for? (If someone clicks “running shoes” and lands on your “accessories” page, that’s not good.) 
• What is your bid amount. Of course, how much you’re willing to pay still matters. 

Google combines all these things to give your ad an “Ad Rank.” The ads with the best Ad Rank are shown at the top of the search results, usually with a small “Ad” label next to them. 

Targeting

Google Ads lets you be super picky about who sees your ads: 

• By what they search for (Keywords). This is the most basic. You want people searching for “running shoes” to see your shoe ad. 
• By where they are (Location). If your shoe store is only in Florida, you can tell Google to only show your ads to people searching in or near Florida. 
• By who they are (Demographics). You can target people based on their age, gender, or even how much money they earn. 
• By what they’re interested in (Audiences). Google knows a lot about people’s online habits. You can target people who’ve shown interest in sports, health, or even people who are actively looking to buy shoes right now. 
• By if they’ve visited you before (Remarketing). You can show ads specifically to people who’ve already been to your website but didn’t buy anything. It’s a reminder to come back. 
• By device. You can choose to show ads more on phones, tablets, or computers. 

Visibility

Visibility means how often and how prominently your ads appear. You want your ads to be seen by the right people, in the best possible spot. 

• Top spots matter. Ads that appear at the very top of the search results get much more attention. Doing well in Google’s “auction” (having good ads, a good website, and a decent bid) helps you get those top spots. 
• More information in your ad. You can add extra details to your ad, like your phone number, store address, or links to specific sections of your website (like “men’s shoes” or “women’s shoes”). This makes your ad bigger and more noticeable. 
• Match what people search for. The more your ad and website match exactly what someone is looking for, the more likely Google is to show your ad in a good position. 

In short, paid search ads are a fast and effective way to get your business in front of people who are actively looking for what you offer, giving you direct control over who sees your ads and what you spend. 

Why advertise on Google?

Simply put, Google is the number one place Internet users visit to search for products, answers, services, places — you name it. Yes, there are still other search engines out there, but Google is far and away the dominant player. 

If you consider the search engine statistics, 81% of consumers research online before shopping for products in stores. When those shoppers go online to do their homework, where do you think they go? Google accounted for 89.98% of all global Internet searches.  To put that number in perspective, Google processes more than 40,000 search queries per second on average. That’s more than 5.6 billion searches per day. 

What does it all add up to? Whether you sell to consumers or to other businesses, to millennials or their parents, it’s safe to bet that your customers spend a lot of time on Google. 

You’re likely thinking that you already have plenty of customers coming to your website without advertising. But consider this first: does any business ever have enough customers? Second, Google ads show up above organic search results—and look very similar. The only real difference with paid search is that they have the word “Ad” in a little box next to them. 

Chances are that customers in a hurry to find what you sell aren’t paying attention to that little box. They just want the result that’s most relevant to their search, and they’ve learned the closer to the top of the search engine results page, the more relevant it is.  

In fact, one study reports that about half of people can’t tell the difference between ads and organic search results at all. With all this in mind, it’s strongly advised that you at least test Google ads as part of your overall local digital marketing strategy.  

How do I set up Google Search Ads? 

Setting up Google Search Ads is a smart move, especially in a competitive market. It lets you instantly connect with customers who are already searching for what you are offering. 

Let’s walk through how to get your ads live on Google. 

1. Create a Google Ads account. Go to ads.google.com. Use your Google account. Choose Expert Mode for full control. 
2. Start a new campaign. Click the blue “+” button. Pick your goal (like Sales). Select Search for text ads. 
3. Campaign Settings. 

• Name it. Give your campaign a clear name (e.g., “Running Shoes”). 
• Networks. Keep Search Network on; turn Display Network off for now. 
• Locations. Choose specific areas (e.g., “Florida”). 
• Languages. Select your customers’ language (e.g., “English”). 
• Budget. Set your daily spending limit (e.g., $50/day). 
• Bidding. Start with Maximize Clicks to get more website visits. 

4. Create Ad Groups: 

• Group similar keywords. Name each group (e.g., “Running Shoes – Branded”). 
• Add keywords. Enter your researched keywords. Use [exact match], “phrase match”, and broad match. Add negative keywords (e.g., -free) to avoid unwanted searches. 

5. Create your ads: 

• Responsive Search Ads (RSA). Make 3-5 RSAs per group. 
• Headlines. Write multiple catchy titles (max 30 characters). 
• Descriptions. Add more detail (max 90 characters). 
• Final URL. This is the exact page people land on. 
• Ad Assets. They make your ads bigger and better. Include Sitelinks (extra links), Callouts (short benefits), Structured snippets (specific features), and Call extensions (your phone number). 

6. Set up billing. Go to Tools and Settings (wrench icon), then Billing > Settings. Add your payment info. 
7. Review and launch. Check everything carefully. Then, click Publish. 

How can I advertise on Google? 

Now that you know why Google advertising is such a good idea, let’s take a look at how to do it. 

Here’s a quick overview of what we’ll cover in this section: 

• Getting started with Google Ads 
• Choose a goal for your campaign 
• Choose a location for your Google ads to appear 
• Choose times for your Google ads to appear 
• Select the right bidding strategy 
• Create narrow ad groups 
• Write relevant ads 
• Track your Google advertising results 

Now, let’s get into the details. 

Getting started with Google Ads 

Google’s PPC advertising platform used to be called AdWords. Now it’s integrated with other products they offer and is known as Google Ads. It’s free to sign up and create a business account. Just select a method of payment, and you’re ready to start advertising. 

As mentioned above, PPC advertising means you only pay when someone clicks on your ad—that’s good news because it means you control how much money you spend. 

 You can check out our PPC Guide for Small Businesses to understand more about PPC marketing. 

Choose a goal for your campaign 

In order for your Google ads to start appearing online, you need to create a campaign in AdWords. Each campaign should have a specific goal. 

For example, the roofing company mentioned earlier has a goal to get people to see video ads and call their business for a quote. Meanwhile, the eCommerce company’s goal is to get users to click on the ad and go to a product category page. Google gives you the option of selecting from different goals, such as increasing sales or getting leads, so it’s easy to figure out which one works best for your small or local business. 

Choose a location for your Google ads to appear 

The more narrowly you can target your ideal customer with your Google ads, the better. For a local business, location is a big part of that targeting. 

For example, if you own a roofing business in Los Angeles, maybe you serve customers in Orange County or even San Diego. But unless you’ve got multiple locations, you probably can’t help customers in San Francisco. 

With Google advertising, you can choose the location of customers you want to see your ads. Why is that important?  

If the roofer in our example above doesn’t specify a location for the ads to appear, they might end up with homeowners in San Francisco (or even Connecticut) clicking on their ads. That’s a waste of money because your business pays for every click.  

By specifying Los Angeles locations for display ads, business owners can target customers in the exact area where they want to get leads and customers. 

Choose times for your Google ads to appear 

The time and day that your ads show up in search engine results can make a big difference to your success. Fortunately, Google lets you control these factors, too. 

For instance, if you’re selling software to business customers, they’re probably looking for your products during business hours. In this case, try setting your ads to run between 9 and 5 on weekdays. On the other hand, if you own a brewpub, you might want to set your ads to run in the late afternoons and evenings (for happy hour) and on weekends. 

Select the right bidding strategy 

Google ads rely on keywords, and not all keywords are created equal. The keywords that are the most popular (the terms that users search for the most) generally cost a lot more money per click.  

Since you’ll be bidding against other business owners on the same keywords, there’s also a competition where you’ll be battling for your ads to show up in front of internet searchers. So the popularity of a search phrase or keyword and the amount of competition greatly affects the cost per click and the minimum price an advertiser can bid on it. 

Artificial intelligence (AI) can actually simplify your marketing. There are many AI marketing tools for small businesses, some of which are designed to take care of your bidding in Google Ads for you. 

One example is Google Ads’ built-in AI called smart bidding, but it has to be used in the right situations. Danny Gilbert writes in Search Engine Journal that if your ad account is small or your ads are already doing well (like if you’re only targeting your own brand name), then using smart bidding might not be worth giving up control. 

Create narrow ad groups 

Ad groups are created within an ad campaign and used to really target specific groups of prospects. For example, a store that sells infants’ and children’s clothes might want to create ad groups targeting parents of infants, parents of older children, parents of boys, and parents of girls. Each ad group should have different keywords or relevant keywords to that specific target market. 

By creating different ad groups, you narrow the target of your ads. An ad that appears in response to a search for “newborn clothes” will be different than one for “back to school clothes.” The more relevant your search ads are, the more successful they will be. 

Write relevant ads 

Google recommends using at least one of your keywords in your ad’s headline. You can use other keywords in the rest of the text but don’t just string together a list of keywords. It’s important to make sure the text is relevant to what the user is searching for. 

In addition, the ad should take the user to a relevant landing page on your website. For example, if someone searches for “newborn gifts,” the link in that ad should go to the page on your website that sells gifts of some kind for newborns, not to the section for preschool kids.  

Track your Google advertising results 

Tracking the results is just as important as starting your Google advertising campaign. Set up conversion tracking to see what happens after a customer interacts with your ad. For example, do they click, call, or fill out a leads form? 

AdWords has a tool you can use for conversion tracking, or you can do it using Google Analytics, which you should use to gather insights about how your business website performs in Google. Sync your Google Analytics account with your AdWords account to be sure you’re tracking ad results properly. 

How can I monitor Google Paid Ads results? 

Diving into Google Ads data can feel like a lot! Let’s break down how to monitor your results in a way that’s much easier to digest: 

• KPIs 
• Reports 
• Monitoring routines 

Let’s check each item in detail below. 

KPIs 

Don’t get lost in all the data. These six numbers are your most important metrics. Focus on them to quickly understand if your ads are working for your business: 

Metric	What it means	What to look for
Impressions  (How often your ad was seen)	Your ad appeared this many times on Google.	High impressions mean your ad is visible. If it’s low, your ads might not be showing enough.
Clicks  (How many people clicked your ad)	This is the number of times someone clicked on your ad to visit your website.	More clicks mean more potential customers visiting your site.
CTR (Click-Through Rate) (How appealing your ad is)	The percentage of people who saw your ad and then clicked on it.	A higher CTR (e.g., 5% or more) means your ad text is relevant and grabs attention. If it’s low, your ad  needs tweaking.
Conversions (What matters (sales/leads)	The number of times someone completed a valuable action on your website after clicking your ad (e.g., buying, filling a form, calling).	If you’re getting conversions, your ads are working. Make sure you set up conversion tracking in Google Ads.
CPA (Cost per Acquisition) (What each result costs you)	The average cost to get one sale or lead.	Is this cost reasonable for your business? For example, if a pair of shoes makes you $500 profit, and your CPA is $100, you’re doing great!
Quality Score (How good Google thinks your ad is)	Google gives your keywords, ads, and landing pages a score from 1-10.	A higher score (7 or above) usually means you pay less per click, and your ads show higher. If it’s low, you need to improve your ad text or website.

Reports

Digging through every report is going to overwhelm you. You can start with these two: 

1. Search Terms Report 

What it is: This shows you the exact words people typed into Google that made your ad show up.  

How to use it: Look for new, relevant search terms to add as keywords. Crucially, find any irrelevant searches (like “free shoes” if you sell new ones) and add them as negative keywords to stop wasting money. 

2. Campaigns/Ad Groups/Keywords Tab 

What it is: This is where you can quickly see the 6 “must-watch” numbers for your whole campaign, individual ad groups, or specific keywords. 

How to use it: Identify what’s working well (high CTR, good conversions) and what’s not (high CPC, low conversions). 

Monitoring routines 

Of course, you don’t need to live in Google Ads, but regular checks are key: 

• Daily. A quick glance at your budget spends and clicks. Check the Search Terms report for any urgent negative keywords to add. 
• Weekly. A slightly deeper dive. Look at your CTR, CPC, Conversions, and CPA. Adjust your bids based on what you see. 
• Monthly. A bigger picture review. Are you hitting your overall goals? Are you profitable? This is when you might test new ad ideas or adjust your budget significantly. 

You don’t need to rebuild it every day, but consistency in these little checks can help your ads run smoothly. 

Refining your Google advertising 

With every aspect of Google advertising, you can fine-tune your budget, timing, wording, location, and more based on what gets the best results. Unlike traditional print advertising campaigns, you don’t have to wait weeks or months to see which ads drive the most traffic to your business or generate the most leads. 

Given the development in recent technologies, that’s a real advantage—and as a small business owner, you want every advantage you can get. 

Speaking of advantages, does your local business have a listing on Google’s local search directory? Creating a local business listing will amp up your business’s online presence. Basically, it ensures that your business shows up in Google Maps and Google Search, which makes it easier for customers to find you. It can also help you to run location extensions in your Google AdWords campaigns. 

Both B2B and B2C businesses can benefit from Google Business Profiles.

10 Google Ads terms you should know

Understanding key terms related to Google Ads is essential for effectively managing and optimizing your online advertising campaigns. Here are some important Google Ads terms you should know: 

• Ad group 
• Ad rank 
• Ad spend 
• Bidding 
• Campaign type 
• Click 
• Conversion 
• Headline and description 
• Impression 
• Match types 

Below are short descriptions for each item to help you understand these terms. 

Ad group

An ad group is a set of keywords, budgets, and targeting strategies within a larger advertising campaign. It helps you focus on specific goals. 

For instance, if you’re promoting a bag sale, you might create ad groups for online sales, women’s bags, and men’s bags. Each group can have several ads designed for those targets. 

Ad Rank

Ad Rank is a critical factor in the placement and visibility of your ads within Google Ads. It is a numerical value that determines the position of your ad on search engine result pages (SERPs) and whether your ad will be displayed at all in response to a user’s search query. 

Ad Rank is calculated based on various factors such as: 

• Your bid amount 
• The quality and relevance of your ad 
• The expected impact of your ad extensions. 

A higher Ad Rank means your ad can be in a better spot on the search results page, which can help more people see and click on it. 

Ad spend

Ad spend refers to the money you allocate for your advertising campaigns. How you calculate it can vary – it might cover just what you spend on ads, or it could also include fees for agencies and people managing the ads. 

Bidding

Whenever there’s an available spot for a new ad on Google, they hold an auction. People who want to show their ads bid in these auctions to secure the ad space. 

Campaign type

Google Ads gives you options for different campaign types. These choices provide flexibility, allowing you to customize your campaigns to match your goals. You can pick from various campaign types, each suited to specific purposes. 

You can choose from the following campaign types: 

• Search campaigns. These campaigns display text ads on Google’s search engine when users search for specific keywords related to your products or services. 
• Display campaigns. Display campaigns showcase visual ads (banners, images, videos) on websites, apps, and videos within Google’s Display Network. This is ideal for brand awareness and reaching a broader audience. 
• Video campaigns. Video campaigns promote your videos on platforms like YouTube and Google Display Network to engage users through video content. 
• Shopping campaigns. Shopping campaigns are designed for eCommerce businesses, allowing you to showcase your products directly within Google’s search results, including images, prices, and links. 
• App campaigns. App campaigns promote your mobile app across Google’s network, including search, YouTube, and Google Play, to increase app installations and engagement. 

Click

When a user sees your ad and decides to visit your website by clicking on the ad, that’s considered a click. Advertisers often pay for each click their ad receives as part of their advertising costs. 

Clicks help measure the effectiveness of your ad in attracting users to your website, landing pages, or other pages. 

Conversion

Conversion refers to a specific action that a user takes on your website after clicking on your ad. This action is typically aligned with your advertising goals, such as making a purchase, signing up for a newsletter, filling out a form, or completing any other desired activity. 

Conversions help you measure the effectiveness of your PPC ads in driving valuable outcomes for your business and allow you to track the success of your advertising campaigns. 

Headline and description

For your own ad copy to be effective, you need a compelling headline and description. These short lines must match what people are searching for, answer their concerns, and provide essential info. Including the keyword in the headline helps them know you have what they need.  

The description should clearly address their needs without being overly enticing. A strong headline and description help your ad shine, even if your bid is lower than the competitors’. 

Impression

An impression is the number of times your ad is shown to a user on a webpage or search results page. Impressions help measure how often your ad is seen by people, even if they don’t click on it. 

Match types

Match types refer to the way you control which search terms or keywords trigger your ads to appear. Different match types help you specify how closely a user’s search query must match your chosen keywords in order for your ad to show. 

There are several match types: 

• Broad match. Your ad may appear for searches that include misspellings, synonyms, related searches, and other variations of your keywords. It offers the widest reach but may also be less targeted. 
• Modified broad match. Similar to broad match, but with more control. You add a “+” symbol before certain keywords that must be present in the search query. 
• Phrase match. Your ad shows for searches that include the exact phrase you’ve specified, even if there are additional words before or after it. 
• Exact match. Your ad appears only when the search query precisely matches your chosen keyword or a close variant. 
• Broad match modifier. You can specify certain keywords with a “+” symbol, which ensures those terms are included in the search query, but it still allows variations and synonyms. 

Stand out with Google Ads

We’ve only scratched the surface of how to advertise on Google in this post, there’s still a lot business owners can explore. We started talking about location extensions but there are other types of assets you can try, too. You could try remarketing, which is when a user searches for baby clothes on Monday, and then your ads for baby clothes follow them around the Internet. You can even use Google display ads or shopping ads to show images shopping ads or videos.

There’s a lot to learn and to try with Google Ads but at the same time, you can simply start with what you learned in this post and try just one ad group at a time and see how it goes. If you’re struggling with the ins and outs of how to advertise on a Google ads account, reach out to pay-per-click marketing experts that can help get you set up and running right away with tools that can do all the heavy lifting. Google Ads is such an exciting tool for small local businesses when used right.

Frequently asked questions