How to use Google Adwords

How to use Google Adwords

Summary: How to set up and structure Google Adwords. How to choose Adwords, how to budget for Adwords and how to maximize that budget.

Google Adwords is Google’s online advertising program.

With Google Adwords you can:-

1.Create ads for people who are searching for products and services on Google. (Google’s Search Network)

2.Create rich media ads that appear by online content that people read or watch, relevant to what you sell.
(Google’s Display Network).

Google’s Display Network includes more than a million partner sites where your ads can appear.

An Adwords strategy requires a Cost Per Click Strategy. This can be high for popular keywords and large companies with large budgets can easily outbid you.

Proceed with a word of warning. Make sure your Cost Per Click Strategy takes your customer into a sales funnel to ensure your Adwords spend translates into income.

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Step 1: Sign up for Google Adwords.

To sign up for Google Adwords, go to and follow the simple set up instructions.

You will need to create a Google account if you have not done so already.

Step 2: Structure your Adwords.

Adwords are structured into 4 main parts:

1. Campaigns.

2. Ad groups.

3. Keywords

4. Ads

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1. Campaigns

A campaign is where you make big picture choices including how much you want to spend and where your ads appear.  You can have more than one campaign.

2. Ad Groups

You can categorize your campaigns into different products and services. You can have more than one Ad Group per campaign.

3. Keywords

These are words or phrases people use when they search for a particular product or service on Google. Choose 5 – 20 keywords per Ad Group.

4. Ads

Ads are the actual ads that people see when they are on Google, Google sites or Google partner sites.

Text ads can appear after someone has typed in a keyword on Google’s Search Network.

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Rich media ads include text, image or video ads and can appear on Google’s Display Network.

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When someone clicks on your ad, you pay per click.

Step 3: Choose your Adwords.

Google has tools to help you choose your Adwords:

For Google’s Search Network (Text Ads), use Google’s Keyword Planner.

For Google’s Display Network (Rich Media Ads), use Google’s Display Planner.

When you set up your campaigns on Google Adwords, it gives you the option to use Google’s Search Network or Google’s Display Network or both.

Your choice will depend on your ad strategy and whether you are using text ads or rich media ads.

To set up Adwords campaigns, go to

Step 4: Determine your daily budget for your Adwords.

To calculate your daily Adwords budget take your monthly budget divided by 30.4.

For example if your monthly budget is $200:

$200 divided by 30.4 = $6.58 per day.

Adwords can allow 20% more clicks in a day than your daily budget specifies, but it wont charge your more than your daily budget multiplied by 30.4 in a billing period.

Step 5: Determine your bid per click.

Adwords uses Cost Per Click bidding – you only pay when someone clicks on your ad.

Set your maximim Cost per Click bid to indicate the maximum amount you are willing to pay per click.

You can set up different bids for different Ad Groups or keywords.

The higher bids with the most relevant ads for those keywords are the ones who get the good ad positions.

Your keyword planners will give you a good indication of how much you should bid to get a good ad position.

Step 6: Monitor your Quality Scores.

Every time someone does a search that triggers your ad, Adwords calculates a Quality Score from 1-10 for each keyword.

Factors that affect your Quality Score include:

1.Expected click through rate when your ad gets shown from a keyword.

2.How closely related your keyword is to your ads.

3.How relevant and useful your landing page will be to people who click on your ad.

In other words, Google is trying to ensure a quality user experience, so they are encouraging their advertisers to promote quality ads.

The better the Quality Score, the less likely you are to pay for clicks and the the better the possibility that you will have a good ad position.

Your Quality Scores can be found in your Adwords account reports.

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  • Felicia

    Thank you for a really comprehensive overview of Google Adwords, this is very helpful!

    • How 2 for Entrepreneurs

      You are most welcome Felicia! :-)

  • Jessica Laurel

    Is it true that using Google Adwords is too expensive now and one should rather use Facebook?

    • How 2 for Entrepreneurs

      Hi Jessica. It is true for very popular keywords that appeal to large companies. They will most likely keep outbidding you for those top spots. However you can also use the less popular keywords. Google’s keyword planner gives an indication on how popular each keyword is – low, medium or high and it also gives a suggested bid. For small businesses, we do not recommend spending money on either Google or Facebook without having some sort of sales funnel set up in order to make back your spend.