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May 27, 2015

Posted by: Brad


AdWords for Dummies: Display Ads, Search Ads & Bidding

Call me a late bloomer, but I’m new to the whole Google AdWords craze that’s engulfed businesses and driven leads for well over a decade.


Have you ever wondered why you Google, “NYC hotel rooms,” and then visit Facebook or another website and, magically, a bunch of ads show up for hotels in New York City? I have, and I’m sure you have too.


Businesses will pay, usually on a cost-per-click (CPC) or cost-per-impressions (CPM) basis, to get its brand noticed and receive conversions. The above scenario is an example of a remarketing Display Ad run by a company in Facebook Ads or Google AdWords. At its core, AdWords runs two types of ad campaigns, Search Ads and Display Ads. 


Display Ads

Display Ads are ads targeted to consumers using visuals that, when clicked on, bring you to that company’s website or landing page. Display Ads are supported by any of Google’s interfaces such as Google Finance, News, Gmail, Blogger, and YouTube, any of its partner sites, and a huge network of websites that makes advertising space available to Google.


According to Google’s DoubleClick data, Americans click on Display Ads .10% of the time. To put that number in perspective, you are more likely to be dealt a full house three times in a row, .14%, while playing poker. So what does this mean? You should invest your entire advertising budget in a good poker player? No. Display Ads are very good in driving brand awareness, or what we in the marketing world like to call “advertising wear out”. A Display Ad will receive thousands, if not millions of impressions, and will provide better results if compelling and targeted at the right audience. Display Ads account for $3.5 billion of the global advertising budget.


Impressions are huge for companies. Impressions are the number of people who see your ad, whether they click on it or not. Impressions lead to clicks, clicks lead to page views, and page views lead to conversions.


Conversions range from a customer buying a product online to signing up for a newsletter to creating an account on a website. The impact of display ads may not be as directly measurable as Search Ads, but they do serve a purpose, and if nothing else, they drive brand awareness.


Search Ads

Believe it or not, Search Ads are exactly what they sound like; an ad that appears when you search for a particular product or service using Google’s search engine. Search Ads are useful in driving traffic to your site by using keywords related to your product.


For example, let’s use the above example of “NYC hotel rooms,” specifically a real hotel, which we will call Hotel X for the purposes of this example. Hotel X has its work cut out for it because it has to diversify itself from the other 1,400 New York City hotels competing with it. So how do they do it? Hotel X must define what keywords are most important to it.


Knowing that it is located in Times Square, it would probably be a good idea to add “Times Square” into its keywords. Other keywords that are useful could be, “Modern Hotels,” “Broadway Hotels,” “Cheap NYC Hotels,” you get the idea.


Hotel X has the option to use broad matches, phrase matches, exact matches and negative matches for each of its keywords. A broad match would be synonyms related to the keywords, a phrase match includes your specific keywords, but might have a few other words included, and an exact match is your exact keywords, nothing more, nothing less. Needless to say each match technique narrows the targeted market of the ad.


After defining its keywords, Hotel X would bid for each keyword. 



A bid is the maximum price you are willing to pay for someone to click on your ad using a specific keyword. Bidding is nothing more than an auction, similar to eBay. I compare it to eBay because when you bid for a keyword on AdWords you pay no more than what is needed to beat the next highest bidder.


Interestingly enough, there is another factor that influences the price you pay for clicks: Quality Score. Your Quality Score is based on a ten  point scale and is calculated by Google in its fancy algorithm that you and I will never truly know the exact details of; what we do know is that when your site or landing page provides content related to its ad campaign it receives a higher quality score.


Google views your Quality Score more importantly than your bid price. Don’t believe me? Let me give you an example. 


There are two NYC hotels bidding for the keyword “Times Square Hotels,” Hotel A bids $7.50 and Hotel B bids $7.00. Hotel A's Quality Score is 6 and Hotel B's is 8. Since Hotel B’s quality score is higher, even though the bid is lower, it may still win the higher ad placement. Bids can be adjusted as an ad campaign wears on. If a hotel notices that more consumers are viewing its site on mobile devices than computers, then it can adjust its bid strategy to be viewed more on mobile devices than computers.


The type of information available to us seems endless and there is a lot of strategy that goes into managing a Google AdWords campaign. However, when managed properly, the returns can be very successful. If you’re new to Google AdWords, I’d love to hear what type of results you’ve seen. If you’re thinking of integrating it into your company’s marketing budget, I’d love to know what’s holding you back. Please leave a comment below. 

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