When you do a search on Google, you get a page of results which looks something like:
The main results (outlined by the green box) come from websites which are displayed in order of relevance or importance by Google. You cannot pay to be listed here. Google has its own set of rules (called algorithms) which allow it to display the most relevant results for your search. These results are called natural or organic results.
Google, however, makes their money from displaying ads (outlined in red) ABOVE, to the SIDE and BELOW the natural/organic results. Any advertiser can have ads displaying on Google’s search results pages in these valuable areas. These ads are called Google AdWords.
As an advertiser, you don’t pay for the ad to display. You only pay when somebody clicks on your ad to go through to your website. In other words, you only pay-per-click. This is why AdWords is called Pay-Per-Click advertising, or PPC for short.
In order for your ads to appear, you need to specify which keywords or phrases must trigger your ad. For example, if you are selling car insurance, you will want your ad to appear when someone types in “car insurance” or “cheap car insurance”, but you don’t want your ad to appear when someone types in “life insurance”.
The amount you pay per click is highly variable. Google decides how much you pay per ad based on an auction or bidding system. Therefore what you pay depends on a number of key factors:
- How many other people want their ad to display for the particular keyword you have chosen i.e. how competitive the keyword is.
- How much other people are willing to pay for their ads to appear
- How much you are willing to pay for your ads to appear
- How relevant your ads are to the keyword you are bidding on
- How relevant the website page is that you are sending visitors to
- How effective your ad is in getting people to click on it
As can be seen from the above, starting, running and maintaining an AdWords campaign involves a lot of skill, time and knowledge, as well as ongoing optimisation in order to maximise the clicks you get for the amount you’re spending.