What is Google Ads? Beginner's Guide on How Google Ads Works

Google Ads are effective due to the immense online activity—3.8 million searches per minute and billions of people active on the internet at any moment. YouTube alone streams a billion hours of content daily.

The digital space is a vast market, and Google Ads allows businesses to tap into it strategically. The success of Google Ads lies in choosing the right ad type and placing it in optimal locations where it reaches the most relevant audience.

For every dollar spent, businesses see an average return of $2, and search ads alone deliver an impressive 8:1 return on ad spend. In short, Google Ads offers a valuable channel for generating meaningful returns.

What is Google Ads?

Google Ads, also known as adsGoogle AdWords, is a bidding-based advertising platform that offers various ad formats, including search ads, video ads, banners, YouTube ads, and more display options. These ads show up in Google search results and across numerous partner sites.

As the biggest digital ad publisher in the U.S., Google Ads holds a 28.4% share of the country’s total ad revenue.

Are Google Ads and AdWords the same?

Yes, they are. Google rebranded Google AdWords to Google Ads in 2018. While there have been a few adjustments, those familiar with AdWords will find Google Ads similar and easy to use. This platform is designed to help drive traffic to your website and achieve a range of marketing objectives.

Though Google Ads and AdWords are the same, Google AdSense is different. Google Ads (formerly AdWords) helps you create targeted ads to drive traffic to your site, increasing conversions. Google AdSense, however, allows you to earn revenue by offering ad space on your site to other advertisers. Both are valuable, yet they serve different purposes—one for promoting your site and the other for monetising its space.

Why Use Google Ads?

The benefits of Google Ads are:

• Instant Visibility: With Google Ads, your ad gains quick visibility. Factors like bid and quality determine its placement, ensuring that a new product or promotion gets noticed instantly—no lengthy wait.
• Versatile Formats: Google Ads offers various ad formats to fit your needs, whether you want to showcase your message through text, visuals, or video, helping you connect with your audience effectively.
• Accurate Targeting: Google Ads lets you reach a specific audience by targeting details like age, interests, or location, helping you focus on the right people for your business.
• Re-engage with Remarketing: Google Ads helps you reconnect with visitors who left your site without completing an action, like a purchase or signup. By displaying your ads on other sites they browse, Google Ads keeps your brand fresh in their minds, encouraging them to return and convert.
• Budget-Friendly Options: With Google Ads’ pay-per-click (PPC) model, you only pay when someone clicks on your ad. Other pricing choices like cost per thousand impressions (CPM) and cost per action (CPA) offer flexibility, letting you pick the most cost-effective approach for your campaign goals.
• Trackable Performance: Google Ads offers detailed reports to track your campaign’s impact. You can see views, clicks, and conversions, allowing you to understand which ads perform well, adjust budgets, and sharpen your targeting for better outcomes.

Google Ads helps with a variety of goals—whether it’s driving traffic, capturing leads, or boosting sales. Your ad’s effectiveness depends on factors like ad type and audience reach.

How Do Google Ads Work?

Google Ads works by allowing businesses to create targeted advertising campaigns that reach potential customers based on specific factors like keywords, campaign type, and geographic location. Here’s how it functions:

1. Choosing a Campaign Type

Google Ads offers various campaign types suited to different marketing goals. You can select from search ads, display ads, video ads, app campaigns, shopping ads, and smart campaigns. Each type serves a unique purpose, such as appearing in search results, on YouTube, or across other websites.

2. Selecting Keywords

Keywords play a crucial role in making your ads visible to the right audience. By identifying relevant keywords related to your products or services, you help Google match your ad with search queries, increasing the likelihood of reaching users who are actively looking for what you offer.

3. Ad Rank and Quality

Ad Rank determines where your ad appears on the page, combining the quality score (based on relevance and user experience) and your bid amount. A higher Ad Rank increases your ad’s visibility, which can drive more clicks and engagement.

4. Bidding System

Google Ads operates on a bidding model where you set the maximum amount you’re willing to pay. Options include cost-per-click (CPC), cost per thousand impressions (CPM), and cost per engagement (CPE), letting you choose the most suitable model for your campaign objectives.

5. Targeting by Location

If your business operates in specific regions, you can target audiences by location. Google Ads can restrict ad visibility to certain geographic areas, making it useful for local businesses looking to attract nearby customers.

6. Keyword Match Types

Keyword match types help you control how closely a search query must align with your chosen keywords. Options like exact match, phrase match, and broad match let you fine-tune your audience reach, allowing ads to appear for specific phrases or broader terms with similar intent.

7. Crafting Ad Copy

The ad copy is the message displayed to users and should be carefully crafted to capture attention and drive action. Testing different versions of ad copy for the same audience can reveal what resonates best, ensuring effective use of your ad budget.

8. Using Ad Extensions

Ad extensions add extra information to your ads, such as business location, product details, or customer ratings. Extensions improve visibility and provide users with additional context, making your ad more appealing and informative.

By managing these elements—campaign type, keywords, bidding, targeting, ad copy, and extensions—Google Ads allows businesses to reach the right audience with the right message, making it a powerful tool for online advertising.

Types of Google Ads

Google Ads offers various ad formats to reach your target audience effectively across different platforms. Each ad type is designed to serve specific goals, whether it's attracting website visitors, increasing product sales, or building brand awareness. Let’s explore the main Google Ads campaign types and how they work to support your marketing objectives.

1. Google Search Ads

Google search ads show up on Google’s results pages (SERPs) when users search specific keywords.

Take the query “email management platform,” for example. An ad for this search typically features:

• Title & description: A headline and brief description provide a quick overview of the product or service.

These ads usually appear at the top or bottom of the SERP, with the number shown depending on factors like keyword popularity.

Search ads align with what users are actively looking for, helping you connect with potential customers precisely when they’re interested in related products or services. 

The Ads Launch Assistant app makes setting up Search campaigns easy. With AI and Semrush data, it guides you through campaign setup. Just enter your URL, language, and location for keyword ideas and AI-generated ad copy, confirm the campaign, set your budget, and launch

2. Google Display Ads

Ever feel like someone’s keeping tabs on you, especially when you keep seeing ads for something you searched yesterday? That’s the power of display ads at work, targeting users with visual ads across devices and websites.

Display ads run through the vast Google Display Network (GDN), which spans millions of websites and apps, including Google platforms like Gmail and YouTube. These ads might show up as banners, like the T-Mobile ad on Forbes, or positioned along the side or within the content of various sites.

Here’s an example of a Google display ad on the Washington Post website:

In the top corner of display ads, you’ll often find an icon for ad choices, where users can close the ad, give feedback, or learn why that ad was shown. Google chooses ads based on page topics, browsing history, and specific market categories advertisers target.

While Display ads may have lower click-through rates, they’re great for building brand awareness by keeping your message visible as users navigate the web—much like digital billboards that follow users on their online journey.

The Google Display Network partners with platforms through AdSense, allowing these sites to host relevant Google ads for their visitors.

3. Google Shopping Ads

Shopping ads pull directly from your product catalogue to create ads optimised for e-commerce across Google’s platforms, including Search, Display, YouTube, and Gmail. Google’s automated system then matches relevant products to a user’s search intent, such as when someone is looking for a specific style of shirt.

These ads are displayed in a visually appealing, easy-to-browse layout, combining both paid ads and organic product listings, making shopping convenient for users.

Here is an example of Google Shopping Ads

Unlike Search ads, where the advertiser creates custom ad copy, Shopping ads use product details from Google Merchant Center feeds. This is especially beneficial for retailers with physical stock, as it populates ads quickly on various platforms:

• Google SERP: Similar to Search ads, Shopping ads appear when users search for keywords tied to products. They can be shown in individual spots throughout the results or grouped in a section along the page’s right side, often linking to Google Shopping.
• Google Shopping: Sponsored product listings appear prominently in a carousel across the top, increasing visibility.
• Google Images: Relevant product ads are displayed in carousels at the top of image search results based on product-related keywords.
• Google Maps: Local Inventory Ads appear in top spots for relevant keyword searches on Google Maps, helping drive traffic to physical store locations.
• Partner Sites: Shopping ads also show up in search results and listings on Google’s partner sites, though these sites are not listed by name.

Shopping ads rely on up-to-date product details from the Merchant Center, focusing on essential information rather than creative text. Each ad typically shows the price, any discounts, user ratings, brand, and product name, along with an image—unlike Search ads, which are text-only

4. Google Video Ads

Video ads primarily run on YouTube, but where and how they appear on the platform varies widely. Here are the six formats for YouTube video ads:

• Skippable in-stream ads: These ads play before, during, or after a video and let users skip after a few seconds if they choose. They have no set length and continue until finished or skipped.
• Non-skippable in-stream ads: Limited to 20 seconds, these ads play without a skip option, keeping viewers engaged for the full duration.
• In-feed ads: Designed to promote videos in highly visible spots like YouTube’s homepage, search results, or below currently playing videos.
• Bumper ads: Short and sweet, these six-second, non-skippable ads play at the start of videos to deliver a quick message.
• Outstream ads: Similar to Display ads, these videos play outside of YouTube, reaching audiences through Google’s video partner sites with no time limit.
• Masthead ads: Highly visible, these ads sit right at the top of YouTube’s home feed.

Beyond YouTube, Google’s Video ads may also appear on its video partner network, including apps, games, and websites that meet Google’s quality standards for video content, ad management, and monetisation practices. This network supports all video ad formats except in-feed and masthead ads, expanding your ad reach across the web.

5. Google App Ads

App ads are specialised ad formats designed to promote mobile applications across Google’s broad network, helping businesses reach potential app users at scale. App ads appear on multiple platforms, including Google Search, Google Play, YouTube, and Google’s Display Network, allowing businesses to effectively engage users across various channels and guide them towards installing or interacting with their app.

App ads do just what they promise—encourage users to download your iOS or Android app. However, Android campaigns come with some unique options, given Google’s ownership of the Google Play Store.

You can set app ads to focus on driving installs or increasing engagement with users who already have the app. For Android, there’s an extra option to run pre-registration campaigns, allowing you to gather early signups and gauge interest before your app officially launches.

Setting up app ads is straightforward. They pull images, videos, and text directly from your app store listing, or you can choose to upload custom media.

How Do Different Types of Google Ads Work?

Google Ads offers a range of ad types, each designed to reach your audience in unique ways. Here’s a closer look at how each Google ad type works to drive targeted results and maximise ROI.

1. Google Search Ads

When someone types a search query, Google’s algorithm checks the ads targeting that keyword.

These keywords are the terms you’ve selected to reach your audience. For each keyword, you can set a “match type,” which determines how closely the user’s search must align with your keyword for your ad to show.

Match types include:

• Exact: Matches only the exact keyword
• Phrase: Matches the exact phrase, allowing extra words before or after
• Broad: Matches any words from the phrase in any order

The algorithm then selects ads with matching keywords and match types, ranking them.

This ranking depends on factors like bid, relevance to the search, and Quality Score. Only the top-ranking ads are shown, with their order set by Ad Rank.

To achieve strong rankings, focus on keyword research. It helps you target relevant search terms and create ads that meet user intent.

2. Google Display Ads

Google display ads work a bit differently than search ads—they don’t rely on keywords. Instead, they focus on factors like user interests, demographics, and specific topics.

When someone lands on a site within the Google Display Network, Google’s algorithm looks at the content on the page, the visitor’s browsing history, and the advertiser’s chosen targeting settings.

From there, the algorithm selects and displays the ads that are most likely to match the visitor’s profile and interests.

3. Google Shopping Ads

For these ads, Google relies on the product information you provide in your Merchant Center account. When someone searches for a product, Google’s algorithm matches their query with your product details.

It then ranks the ads by considering relevance, bid amount, and customer ratings for the product. The top-ranking products are featured in the shopping carousel.

4. Google Video Ads

These ads leverage both demographic and interest-based targeting. Google reviews the video the viewer is watching, along with their past viewing habits.

Taking this information and your chosen audience criteria (such as age, gender, or interests) into account, Google assesses if your ad is relevant. Then, your bid and Quality Score decide if your ad will show up and where it will appear in the video—either before, during, or after the content.

5. Google App Ads

Google App ads are created automatically in different formats for various platforms using the text, images, and videos you submit. These ads target users based on their behaviour, search patterns, and other contextual details like location, device type, and time of day.

The algorithm uses your bid and Quality Score to determine ad placement within Google’s network. It then tests different asset combinations to find the most effective ad setup for reaching the right audience.

Tips For Creating Winning Google Ads 

Creating effective Google Ads can help you reach the right people and drive valuable traffic to your website. But to truly stand out, your ads need to do more than just appear in search results—they need to grab attention, provide value, and encourage clicks. Here are some simple tips to help you create Google Ads that deliver results:

• Focus on Keyword Relevance: Pick keywords that closely match what your ideal customers are searching for. This way, your ad appears at the right time when people are actively looking for what you offer, making them more likely to click.
• Craft Compelling Ad Copy: Write ad copy that captures attention and clearly explains the benefits of your product or service. Use strong calls to action and highlight what makes you unique to encourage clicks and conversions.
• Leverage Ad Extensions: Ad extensions add useful information like your location, contact details, or additional links, making your ad more visible and clickable. They enhance your ad’s performance by providing extra details to potential customers.
• Optimise for Mobile Users: Many people search on mobile devices, so make sure your ads and landing pages are mobile-friendly. A smooth mobile experience makes it easier for people to engage with your ad and improves overall results.

Transform Your Advertising with ScaleStation’s Data-Driven Google Ads Strategy

ScaleStation’s Google Ads services are crafted to deliver powerful, targeted results, connecting you with the right customers at the perfect moment. Our dedicated team dives deep into your business goals, building customised ad strategies that capture attention, drive engagement, and boost your bottom line. Here’s what makes us stand out:

• Google Search Ads: Reach motivated customers precisely when they’re searching for your products or services, securing prime positions in search results.
• Google Display Ads: Amplify your brand’s presence with captivating visuals that expand your reach across Google’s expansive Display Network.
• Google Shopping Ads: Showcase your products to shoppers ready to buy, using optimised visuals in Google Shopping to increase e-commerce success.
• Google Remarketing Ads: Re-engage past visitors with compelling ads that keep your brand fresh in their minds, boosting conversions where it matters.

ScaleStation’s data-driven approach and relentless optimisation ensure that every ad dollar delivers maximum impact. Partner with us to transform your Google Ads strategy into a powerful engine for growth.

Conclusion

Google Ads is a powerful platform that offers businesses a direct line to potential customers right when they’re searching for related products or services. Whether you’re looking to boost website traffic, increase sales, or promote brand awareness, Google Ads provides various ad types and targeting options to fit different goals and budgets. 

Once you get to know how bidding, keyword targeting, and ad placements work, even beginners can create effective campaigns that reach the right audience. With some strategic planning and regular optimisation, Google Ads can be a valuable tool for growing your business and enhancing your online presence.