How Google Adwords Work?

Google Adwords is the state of the art pay-per-click advertising system that lets advertisers create ads based around keywords and keyword phrases. Using a Google Adwords advertising campaign is an ultra effective method for getting targeted traffic to your website.

Creating ads with Adwords is a fairly simple and straight forward process. You can literally create an ad in a few minutes. Google does a great job of providing tools to help you create quality ads.

As an advertiser you can elect to have your ad shown on specific high traffic websites or have your ad seen on the far right side of the screen when a Google search results page is queried. Any ad that is placed on specific websites is called a “placement specific ad” and a search results ad is referred to as a “keyword targeted ad”.

Placement specific ads are charged to you in one of two ways. Either based on the number of impressions your ad gets, which is the total number of times your ad is seen by prospects, or based on the number of times your ad gets clicked (PPC). In the later scenario, Google is only charging you when someone actually takes action and clicks on your ad.

If you are a small business owner, having these options, can really help you stretch your advertising budget. Google may display your ad quite a few times, but you would only be charged when your ad catches the attention of a prospect and they take action by clicking on the ad, and then they would be directed to your advertised website.

Google gives you choices with regards to paying for your Adwords Campaign as well. You may either pay up front or you have the option of being billed later. If you are like me and don’t care for unexpected financial surprises, paying your Adwords account up front and having each impression or click deducted from your funds is the best way that I have found to stay within my Adwords advertising budget.

Also, in an effort to help each advertiser stretch their advertising budget as far as possible, Google allows you to set a daily cap on how much of your advertising money is used. If you have an Adwords budget of $200 for the entire month then you can set up your limits within your Adwords account and Google will not charge you for more impressions or clicks than your budget will allow for that particular day. This also helps ensure that you will at least get a small amount of advertising every single day of the month.

Determining the effectiveness of your ads is extremely important to your advertising efforts. There are many reports that can be generated from your Google Adwords account that can help you determine how effective your ad actually is. You can easily create multiple versions of a similar ad and have each ad focused on specific keywords or keyword phrases. This will allow you to determine which ads and keywords are generating the highest click thrus and the best return on your investment.

Adwords when used properly is an outstanding tool for driving targeted traffic to your site. By taking the time to study, modify your ads and tracking your results, you can determine which ads are bringing you the most traffic to your site and which ads are helping you to generate revenue.

Not taking the time to test and track your results will usually leave you with very little traffic, little or no income and a waste of your advertising dollars.

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Usefull Resources:

1. google adwords

2. google adwords tool

3. google analytics

4. International Association of Home Business Entrepreneurs