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Get started with Google Ads Part 2

Updated: Jun 4, 2019

To understand how Google Ads works it is important that you understand some fundamental terms.

1. AdRank

2. Bidding (CPC, CPM, CPE)

3. Campaign Type

4. Auction

5. Click-Through Rate

6. Conversion Rate

7. Ad Extensions

8. Keywords

9. Quality Score

1. Ad Rank

Ad rank is a value that's used to determine your ad position and whether your ads will show at all. Ad Rank is calculated using your bid amount, your auction-time ad quality the Ad Rank thresholds, the context of the person’s search and the expected impact of extensions and other ad formats.


To run your ads on Google, you'll need to decide on the right budget and bidding options. Your budget establishes a charging limit for an individual campaign, so it should be the average amount you'd be comfortable spending per day (or seeing on your monthly credit card bill if you multiplied your budget by 30.4, the average number of days in a month). Your actual costs may be lower, depending on how you manage your bids. You have three options for bidding: CPC, CPM, or CPE.

CPC (cost-per-click) is the amount you pay for each click on your ad.

CPM (cost per thousand impression) is the amount you pay for one thousand ad impressions, that is when your ad is shown to a thousand people.

CPE (cost per engagement) is the amount you pay when someone takes a predetermined action with your ad.

3. Campaign Type

Search Network with Display Select Campaign The "Search Network with Display Select" campaign type helps you reach people as they use Google search or visit sites across the web.

You manage your "Search Network with Display Select" campaigns the same way that you'd manage a "Search Network only" campaign: set a budget, choose relevant keywords, create ads, and set bids.

Your ads can appear when people search for terms on Google search and search partner sites that match your keywords. They can also appear on relevant pages across the web on the "Google Display Network". However, your ads are shown selectively on the Display Network and bidding is automated, helping you reach people who are most likely to be interested in the products and services you’re advertising.

Search Network Campaign Ads in a Search Network campaign appear near Google search results and other Google sites when people search for terms that are relevant to your ad’s keywords.

Search Network campaigns are usually focused on getting people to take action such as clicking your ad or calling your business. These campaigns show ads to people who are actively seeking out information. When someone is intentionally seeking out a product or service like yours, they're much more likely to find your ad helpful, and click it.

For example, say you run a local music school. A Search Network campaign lets you show your text ads to high-potential customers right when they’re searching for "guitar lessons."

Display Network Campaign

The Google Display Network is designed to help you find the right audience. Its targeting options let you strategically show your message to potential customers at the right place and the right time. While the Search Network can reach people when they're already searching for specific good or services, the Display Network can help you capture someone's attention earlier in the buying cycle. You can put your ads in front of people before they start searching for what you offer, which can be key for your overall advertising strategy.

Shopping Campaign

If you're a retailer, you can use Shopping campaigns to promote your online and local inventory and boost traffic to your website or local store.We call these placements Shopping ads, because they're more than a text ad - they show users a photo of your product, plus a title, price, store name, and more.

Video Campaign

Video campaigns let you show video ads on their own or within other streaming video content on YouTube and across the Google Display Network.

App campaign

As an app advertiser, you want to get your app into the hands of more paying users. App campaigns streamline the process for you, making it easy to promote your apps across Google’s largest properties including Search, Google Play, YouTube, and the Google Display Network. Just add a few lines of text, a bid, some assets, and the rest is optimized to help your users find you.

4. Auction

The process that happens with each Google search to decide which ads will appear for that specific search and in which order those ads will show on the page (or whether or not any ads will show at all). Each time an ad is eligible to appear for a search, it goes through the ad auction. The auction determines whether or not the ad actually shows and in which ad position it will show on the page.

Here's how the auction works:

1. When someone searches, the Google Ads system finds all ads whose keywords match that search.

2. From those ads, the system ignores any that aren't eligible, like ads that target a different country or are disapproved based on a policy violation.

3. Of the remaining ads, only those with a sufficiently high Ad Rank may show. Ad Rank is a combination of your bid, ad quality, the Ad Rank threshold, the context of the person's search, and the expected impact of extensions and other ad formats.

The most important thing to remember is that even if your competition bids higher than you, you can still win a higher position - at a lower price - with highly relevant keywords and ads.

Ad position and ad rank

5.Click-Through Rate

A ratio showing how often people who see your ad end up clicking it. Clickthrough rate (CTR) can be used to gauge how well your keywords and ads are performing. CTR is the number of clicks that your ad receives divided by the number of times your ad is shown: clicks ÷ impressions = CTR. For example, if you had 5 clicks and 100 impressions, then your CTR would be 5%.

6.Conversion Rate

The average number of conversions per ad interaction, shown as a percentage. Conversion rates are calculated by simply taking the number of conversions and dividing that by the number of total ad interactions that can be tracked to a conversion during the same time period. For example, if you had 50 conversions from 1,000 interactions, your conversion rate would be 5%, since 50 ÷ 1,000 = 5%.

7. Ad extensions

Extensions expand your ad with additional information, giving people more reasons to choose your business. They typically increase an ad's click-through-rate by several percentage points. Extension formats include call buttons, location information, links to specific parts of your website, additional text, and more. To maximize the performance of your text ads, Google Ads selects which extensions to show in response to each individual search on Google. For that reason, it’s a good idea to use all the extensions relevant to your business goals. By adding more content to your ad, extensions give your ad greater visibility and prominence on the search results page. That means you tend to get more value from your ad. Extensions often increase your total number of clicks, and can give people additional, interactive ways of reaching you as with maps or calls.


Keywords are words or phrases that are used to match your ads with the terms people are searching for. Selecting high quality, relevant keywords for your advertising campaign can help you reach the customers you want, when you want. To get your ads to appear when people search for your product or service, the keywords you choose need to match the words or phrases that people search for.


If you sell frisbees, you can add "buy frisbee" as a keyword in your Google Ads campaign. When people type "buy frisbee" on Google search, your ad might appear on the search results page. In addition, your ad could also appear on websites about "ultimate frisbee".

Negative Keywords A type of keyword that prevents your ad from being triggered by a certain word or phrase. Your ads aren’t shown to anyone who is searching for that phrase. This is also known as a negative match.

For example, when you add "free" as a negative keyword to your campaign or ad group, you tell Google Ads not to show your ad for any search containing the term "free." On the Display Network, your ad is less likely to appear on a site when your negative keywords match the site's content.

9.Quality Score

Quality score is an estimate of the quality of your ads, keywords and landing pages. Higher quality ads can lead to lower prices and better ad positions. The more relevant your ads and landing pages are to the user, the more likely it is that you'll see higher Quality Scores.

Read more about how to succeed with Google Ads in Part 3!



Thank you!

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