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A Beginner’s 101 to Google AdWords for Local Businesses

Google AdWords can be a helpful tool for a local business if you’re creating a specific marketing campaign or keen to increase the number of leads you get. But at first glance, it can seem very complicated – and expensive. Here’s our guide to the basics of Google AdWords; how it works, important things to remember and what to consider before investing.

What is Google AdWords?

Google AdWords is online advertising run by Google. With over 85% of online searches done on Google, it is the world’s largest search engine. It works by showing adverts that feature prominently in search results when people use Google. These adverts relate to what they’re searching for. For example, if they were searching for “plumbing repairs” they would see adverts from local plumbers.

An example of how it would be seen is illustated below:

Google AdWords

Unlike other advertising (such as in a magazine) your advert may be shown to lots of different people, but you only pay if someone clicks on your advert.

You can set up different criteria for your advert to encourage people to click on it, such as showing it to:

  • People searching for words in a certain location
  • People who have visited a certain website
  • A particular type of person (e.g. certain age)

What are keywords and why are they important?

Google AdWords is based on ‘keywords’ – words and phrases people search for (like “plumbing”). People search for certain keywords using Google, and are presented with different results. Some of these will be adverts.

As a business, you’ll set up your Google AdWords account so you have adverts which appear when people search for particular keywords associated with your business.

As an example, a plumber in Nottingham might include keywords like:

  • plumbing services
  • plumbers in Nottingham
  • plumbing repairs

There might be a lot of businesses who want to advertise on Google when people search for certain keywords – for example, there might be hundreds of plumbers around Nottingham who all want to appear when someone searches for “plumbers in Nottingham”. This means that AdWords use a ‘bidding’ system.

Payments and bidding

The bidding system works a bit like an auction. You put in a bid for a certain keyword, and so do other businesses. Google uses this information, along with the quality of your business website and adverts, to decide:

  • Which adverts will appear in the search results
  • What order the adverts will appear in

When you bid on a keyword in Google AdWords, you’re bidding for the maximum amount you’re willing to pay when someone clicks on your advert. However, what you actually end up paying could be less – it just depends on what your competitors are bidding. It’s a bit like eBay, where you might end up getting your item for less than your maximum bid because other people haven’t bid as much.

What’s important to remember is that the quality of your advert directly affects whether your ad will be shown or not. We’ll explain more on that in the next section.
Because you only pay if someone clicks on your advert, you don’t need to worry about running out of budget; Google will only show your advert to people while you have enough money in your AdWords account to pay for any potential clicks.

Advert ranking

Google doesn’t just show one advert for each keyword a person searches for; they show several. This means that your advert might appear first in the ‘ranking’ – or it might not.

Google uses your bid amount along with a number of different factors to work out a score called Ad Rank. This score determines where your advert will appear in the ranking, or whether it will appear at all.

Ad Rank is important because it means that it’s not necessarily the highest bid which will make sure your advert is shown to potential customers. There are other factors too, most importantly the quality of your advert.

The other factors are:

  • How many people are expected to click the advert
  • Where the advert sends people to and the quality of that destination (usually a page on your website)
  • How relevant the advert is to what people are searching for
  • Whether the advert has a format which includes useful information for users

All this is designed to prevent businesses from paying to get into search results, even if their business or advert isn’t relevant to a potential customer. So if you’re a plumber, you wouldn’t be able to have an advert which was shown to people searching for ‘holidays abroad’ (and you wouldn’t want to, either!).

The quality of your adverts has an impact on the price you pay. So if you improve elements of your Ad Rank – for example, by writing a clearer, more relevant advert which includes the keywords you’re bidding on – the cost you will pay each time someone clicks on your advert could go down.

Google have also introduced their latest AdWords Price Extensions update which will now be live across all devices. This update allows your business to highlight price points for your products or services in your adverts which helps to improve your search visibility.

Important things to remember about Google AdWords

  • Google AdWords are adverts which appear in search results when people search for keywords
  • You’re bidding against other businesses for your advert to appear in search results
  • You’ll only pay for the people who click on your advert
  • The quality of your advert and bid amount affects whether your advert will appear, and where
  • Improving your advert could help bring your cost down

Finally, consider the budget you can realistically invest in your Google AdWords account. There’s no worry about overspending, as Google will only show your advert to people when you have enough budget to pay for clicks. Google will give you suggestions about how much to bid for different keywords based on competitors and other factors, but – like any business expense – it’s important to think about how much you want to spend so you feel like you’re getting something for your money.

Considering all of the points mentioned in this article will help you and your business on your path to Google Adwords success. For more information on how to get the best out of your Google Adwords campaigns, read the following articles.

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