What are AdWords?

Adwords – The pay-per-click (PPC) search engine marketing (SEM) program provided by Google.

What Is Google AdWords?

Google offers advertisements which appear in search results on with the use of Google AdWords or advertisements that appear on other websites through the Display Network and Google’s AdSense program.

Google also offers Display Ads, which appear on the Google Display Network. The Display Network is an extensive collection of outside, third-party websites that have partnered with Google and agreed to serve Google ads. Google ads on the Display Network can be in text, image, video, or rich media format, and can be targeted differently. This includes remarketing and banner ads.

Why Google Ads Appear

The Google AdWords auction is focused around keywords – advertisers choose a list of keywords to target that are relevant to their business offerings, the words that people are most likely to use when searching for their product. They then bid on these keywords, basing each bid on how much they are willing to pay for a Google user to click on their ad. This bid, combined with a Quality Score assigned by Google based on the quality of your proposed ad, determines which Google ads appear on the SERP. When users click the ads, the advertiser pays a certain cost (the cost per click, or CPC), which is calculated according to the below formula:


This is where the term Pay-Per-Click (PPC) originates.

The Auction

AdWords works on an auction system, which takes place every time a user performs a keyword search.

To “win” the AdWords auctions and see your Google advertisement appear for relevant keywords, you’ll need to optimize your Quality Score and the bid amount. The higher your Quality Score, in conjunction with your bid amount, the better your ad positioning. The following factors (among others) affect your Quality Score:

  1. The relevance of your Google ad to the search query
  2. The relevance of the Google keyword to your ad group
  3. The relevance of your ad to its landing page
  4. The historical click-through rate (CTR) of the ad and its ad group
  5. Overall historical account performance

There are also overall benefits to having a high-quality score:

  • Lower costs– Google rewards advertisers with high-Quality Scores by lowering their cost per click (CPC), helping improve ROI.
  • Higher exposure – When you have high-Quality Scores, your ads will display more often, in better positions on the SERP—the top vs. the bottom of the page. This enables you to get more clicks and conversions without having to raise your bids.


« Back to Glossary Index