How Does Google AdWords Work?

Google AdWords is a pay-per-click advertising system that allows a web publisher to create an ad based on keywords and key phrases.  This type of advertising campaign can be an effective method for generating traffic to a website. 

Creating an ad with AdWords is fairly easy and doesn’t take much time.  Google supplies the users of this service with quite a few tools to help them create the most effective ads possible.

A person can choose to have their ad placed on specific websites or have their ad seen on the right side of the screen on a Google search results page. An ad that is seen on websites will be known as a placement specific ad and a search results ad is known as a keyword targeted ad.

A placement specific ad can be billed in two ways, either for the number of impressions, which is the number of times it is seen by people, or through pay-per-click.  All keyword targeted ads are billed in the pay-per-click manner.  What this means is that Google only charges the advertiser when someone actually clicks on the ad. 

This can really help stretch a small business owner’s advertising budget.  Google may display the ad quite a few times, but the advertiser is only charged when the ad catches the attention of someone who clicks on it, and is then directed to the advertiser’s site.

Google allows people to pay up front for their AdWords campaign as well as the option of being billed later.  For someone who doesn’t want any unexpected surprises, paying up front and having each click or impression debited from the funds is a great way to stay on budget.

To further help stretch an advertiser’s budget, Google allows the advertiser to set a daily limit on how much money is used.  If a person has a budget of $50 for the month they can set those limits within their AdWords account and Google will not let them have more clicks or impressions than their budget allows for that day.  This will ensure that they get a small amount of advertising each day.

There are many reports within AdWords that can be used to determine the effectiveness of the ad.  An advertiser can easily create a few versions of a similar ad and focus each one on specific keywords to see which ad and which keywords are the most effective for them.

In this way, AdWords can be a very effective tool, as well as a great way to drive traffic to your site.  By taking some time to modify their ads and track their results, a business owner can find out exactly which ads bring in the most traffic and the highest profits.