AdWords is Google’s online advertising platform that allows you to reach potential customers and bring them to your website. AdWords allows you to create ads for your business that can display whenever a person conducts a relevant search on Google.

In addition to search campaigns, AdWords also offers the ability to advertise outside of Google across its network of affiliated websites called the Google Display Network.

How Keywords Work

Keywords are the words and phrases you add to a campaign that trigger your ad to show. For example, if you deliver fresh flowers, you could use "fresh flower delivery" as a keyword. When someone searches Google using the phrase "fresh flower delivery" or a similar phrase, your ad might appear along with the Google search results.

Pricing

There's no minimum amount that you have to spend in order to show your ads on AdWords. You set an average daily budget for your campaign along with a bid for each of your keywords. Every time someone searches on Google, AdWords runs an auction with these bids to determine which ads show on the search results page. This also determines their rank on the page.

Two Bidding Methods

1. Bid for each time a person clicks your ad.
   This is known as a CPC, or cost-per-click, bid. This bidding method works well if you want to drive traffic to your website.

2. Bid for each 1,000 times your ads are shown.
   This is known as a CPM , or cost-per-thousand-impressions, bid. This bidding method works well if you want to increase awareness of your brand.

Most people opt for the CPC bidding option, which means they’re charged according to the number of clicks they get on their ads. If you use CPC, the amount you're charged per click depends in part on the maximum CPC bid you set. Generally, this represents the highest amount that you'll ever pay for an ad click. And since this is an auction, you'll only be charged the minimum amount necessary to keep your ad at its position on the page.

Where Ads Appear

With AdWords, your ads can appear in various places across the web. This depends on how you target your ads and the types of campaigns you create. Here are three places your ads can appear:

1. On Google Search and other search sites within the Google Search Network
   

2. On websites that people visit within the Google Display Network

3. On mobile phones, tablets, and computers

Creation

General Targeting

When creating your campaign, there are a number of ways to target your ads in order to reach the most relevant audience.

Location Targeting

Location targeting allows your ads to appear for people in selected locations. You can choose entire countries, areas within a country like cities, or even the immediate area around a specific address. Location targeting helps you focus your advertising on the areas where you’re likely to find customers.

Demographic Targeting

If your products are made specifically for one gender, or if your typical customer skews heavily toward an age group, you can use demographic targeting to reach them without wasting your ad spend on others.

Language Targeting

With language targeting, your ads can appear for customers who use websites in the languages that your campaign targets. This helps ensure that your ads will appear on sites that are written in the language of the customers you'd like to reach. Since your customers may be bilingual, you may find it helpful to target additional languages.

Daily Budgets

Your budget is your daily spend limit for a campaign, so it should be an amount you'd be comfortable spending per day (or seeing on your monthly credit card bill if you multiplied your budget by 30.4, the average number of days in a month). Your ads will run until your daily budget is depleted.

Ad Groups

Ad groups are containers that hold a set of ads and the keywords (or other methods of targeting) that trigger those ads. They also contain a default bid for keywords in the ad group along with keyword-level bids, if specified.

Since ad groups live in larger campaigns, they inherit the settings and ad extensions from the campaign they’re housed in, though you can also apply unique settings and extensions to the ad group.

Learn How to Use Ad Groups to Build Relevant Ads .

Ads

Each text ad on AdWords consists of a headline, a couple lines of text describing your business, and a clickable link to your website.

Headline

The first line of your ad is the one that customers are most likely to notice. Consider including your keywords in the headline to make it stand out because people are more likely to notice headlines that match what they're searching for. Your headline can contain up to 25 characters.

Description

These two lines are where you describe the product or service you're advertising. Space is limited, so choose your words carefully to highlight the most important details and benefits. AdWords allows up to 35 characters for each of the two description line.

Display URL

This line of your ad shows the address of the website that you're promoting. AdWords lets you select a display URL to give people who see your ad a clear idea of where you’ll take them when they click on the ad. This does not need to match the actual URL you send people, so you may want to be creative.

Destination URL

This is the precise location on the website the person who clicks on your ad will be sent. People will not see the destination URL, they will only see the display URL until they click your ad.

Keywords & Bids

Selecting the right keyword list for your campaign can help you show your ads to the right customers as they search or visit certain websites. The keywords you choose should match the terms your potential customers would use to search for your products or services.

When you add each keyword to your campaign, you may also decide how much you're willing to pay whenever a customer’s search matches that keyword and clicks your ad. This is your keyword's maximum CPC bid. Many advanced advertiser maintain tight control over their campaign with manual bids, but many others find value letting AdWords automate their bidding for them within their daily budget.

Learn how to use Google’s Keyword Planner to choose your keywords .

Match Types

Match types give you control over how closely searches must match your keywords to trigger your ads. They’re an additional layer of control over your keywords that let you target the searcher’s intent.

Learn more about match types here .

Optimization

Daily Budgets

When you have a limited advertising budget, you need to make the most of every dollar you spend. Rather than letting your campaigns daily budget run out every day and missing out on clicks, or spending more than you can afford, consider how you can spend your budget more effectively:

1. You can lower your bids to reduce the average cost per click.

2. Ensure your campaign is set to "Standard delivery" instead of "Accelerated delivery." This ensures your budget is spread out throughout the day rather than spending as early in the day as possible.

3. Set your bid strategy to automated bidding. This way AdWords can set your bids to help maximize clicks within your budget

Ads

To optimize your ads, try out different ad text to see which ad has the best results. For example, duplicate your first ad and change the headline to see if that works better. You can even set your ad rotation to optimize for clicks to let AdWords serve the best ads most. When you find a winner, you can test variations of that ad and pause all the others.

Keywords & Bids

You can improve your results and lower your costs by adding, changing, or deleting keywords, match types and bids. For example, if your campaign has been running for a while and your performance data shows that some of your keywords are performing better than others, you could increase your bids for keywords that convert to sales and decrease bids for keywords that aren't converting to sales.

Visit the Google AdWords Help page for more detailed information.