What is Google Ads?

Google Ads, formerly known as Google AdWords, is a bid-based online advertising platform that includes text format search engine ads, video ads, banner ads, YouTube ads, and other display options. Google Ads appear across Google search results and millions of Google partner websites.

Google Ads is a pay-per-click (PPC) advertising platform that you can use to get your ads listed on Google’s search engine results pages (SERPs).

With this system, you can create just one campaign, which is used to organize groups of similar ads, or you can run multiple campaigns at once through your Google Ads account.

James T. Eggert

We’ve talked plenty about how a strong Google Search Ads campaign can take your reach, brand awareness,

How do Google ads work?

You write an ad, place a bid, wait, and sales roll in. That’s basically it… with a few small caveats.

I’ll cover how to create a Google Ads campaign in step-by-step detail later, but essentially, Google Ads works on a pay-per-action pricing model, usually calculated as cost-per-click (CPC). That means you pay a certain price every time a user clicks on your ad, or whatever your goal action is.

That price changes often and depends on multiple factors, including how many other brands are currently targeting that keyword, search volume, expected reach, time of day or year, and more.

When you place your ad, you specify your “maximum bid” — the most you’re willing to pay for a click (or view, or other action you’ve defined).

The three main bidding options are:

1. Cost-per-click (CPC): You pay when a user clicks on your ad.
2. Cost-per-mille (CPM): You pay per 1,000 ad impressions.
3. Cost-per-engagement (CPE): You pay when a user performs a specific action on your ad (signs up for a list, watch a video, etc).

For example, if your max bid is $2 but Google says the value of that click is $2.55, your ad won’t show. However, if your max bid was $2.56, your ad would be more likely to get the placement.

Importantly, this number is different from your overall campaign budget. You have the option to set a daily average budget and let Google handle your individual ad bids, or to set both your overall budget and fine-tune the maximum bid for each ad.