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How Google Ads work?

by | Mar 3, 2021

Google offers paid ads that appear in search results on google.com with the use of Google Ads or ads that appear on other websites through the Display Network and the Google AdSense program.

Below is an example of a Google search engine results page (SERP). There are two paid Google Ads sections, one above the “natural” or organic links and one at the bottom of the results page:

 

Sponsored results, or announcements, (in the red box) are indicated by a green “Announcement” tag. The results that appear below the ads (in the green box) are called organic results.

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

 

Why Google Ads Appear

 

The Google Ads auction is focused on keywords: Advertisers choose a list of keywords to target that are relevant to their commercial offers, the words that people are most likely to use when searching for your 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 Google-assigned Quality Score based on the quality of your proposed ad, determines which Google ads appear in the SERP. When users click on the ads, the advertiser pays a certain cost (the cost per click or CPC), which is calculated according to the following formula:

 

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