Google Adwords – The basic concept

June 17th, 2009
by Paul @ ORC
Google SERP

Google SERP

People who aren’t in the industry don’t usually pay too much attention to the structure of the Google results page and refer to Google Adwords as “those ones down the right hand side”.  Well if you want to know a bit more about how to get your business listing in “those ones” here is an outline about what Google Adwords is all about.

On a Google results page as well as the natural listings there are also paid for sponsored links. These appear at the top of the results page above the natural listings and down the right hand side in a seperatecolumn. To get these adverts linking to your site you will need to set up an account to use Google Adwords.

The concept is a simple one – you bid on words and phrases in an auction and the highest bids appear at the top of the sponsored links. The highest bid isn’t just about money though. There are two other important factors that Google consider – the Quality Score and the Click Through Rate (CTR).

Every time you bid for a word or phrase Google will compare this with the content on your landing page and work out a Quality Score. The published score is between 1-10 and usually 7 or more is considered good.

The third factor – the CTR – is a percentage of people who click on the advert after it is displayed (clicks/impressions). It is slightly more difficult to say what you should be aiming for here as expected CTRs will vary greatly depending on the phrase and the market. Our ecommerce clients would accept 5%, would be pleased with 10% and would be very pleased with 25% or more. However with some terms much less can be acceptable.

Effectively what this means is if you have a high Quality Score and good CTRs then you will pay less for your clicks than competitors who have poor quality scores and CTRs.

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Posted in Google Adwords, Online marketing - General | Comments (11)

11 Responses to “Google Adwords – The basic concept”

  1. Derekp Says:

    I think i’ve seen this somewhere before…but it’s not bad at all

  2. Paul @ ORC Says:

    Thanks Derekp

    Well I accept that it’s not ground breaking :D but I often come across companies who are paying for clicks through Adwords, without really understanding the basics and whether or not it’s cost effective.

  3. ORC Says:

    Paul is right. We often get clients asking us how Adwords works. Bizarrely we even come across clients actually using Adwords who still don’t understand the concept!

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