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Every second, there are 63,000 searches performed on Google, and the majority of search results pages include Google ads. Paid for by businesses, Google ads can be an extremely effective way of driving relevant, qualified traffic to your website exactly when people are searching for the types of products or services your business offers.

In this article, youll learn what Google ads are, how Google ads work, and why you should run your own Google ads.

What isGoogle Ads?

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

Below is an example of a Googlesearch engine results page(SERP). The sponsored results, or ads, are denoted with an Ad label. There are two sections of paid Google ads, one above the natural or organic resultsand one at the bottom of the results page.

Google Ads at the top of the SERP:

Google Ads at the bottomof the SERP:

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

If using AdSense, your ads would appear in the selected areas on a website:

Why Google Ads Appear

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

This is where the term Pay-Per-Click (PPC) originates.

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The Google Ads Auction

Google Ads works on an auction system, which takes place every time a user performs a keyword search.

To win the Google Ads auctions and see your Google advertisement appear for relevant keywords, youll need to optimize yourQuality Score and bid amount. The higher yourQuality Score, in conjunction with your bid amount, the better yourad positioning. The following factors (among others) affect your Quality Score:

• Therelevanceof your Google ad to the search query
• Therelevanceof the Google keyword to yourad group
• Therelevanceof your ad to its landing page
• The historicalclick-through rate(CTR) of the ad and its ad group
• Overallhistorical account performance

There are also overall benefits to having a high quality score:

• Lower costs Google rewards advertisers with high Quality Scores by lowering their cost per click (CPC), helping improve ROI.
• Higher exposure When you have high Quality Scores, your ads will display more often, in better positions on the SERPthe top vs. the bottom of the page. This enables you to get more clicks and conversionswithouthaving to raise your bids.

For more information, refer to this infographic to better understand how the Google Ads auction works.

Google Ads Costs

The cost of Google Adsvaries based on a number of factors, including the competitiveness of your keywords and industry, your geographic location, the quality of your advertising campaigns and more.

In the US, the average cost per click for Google search ads across all industries is $2.32.In other countries, average costs for Google Ads are often much lower.

The Google Ads Performance Grader: A Completely Free Audit of Your Google Ads Account

There you have it! Google Ads, explained.

To maximize the impact of your Google Ads ads and campaigns, you need to know which campaigns work for your business and where to make improvements-WordStreams Google Ads Performance Gradercan help you do exactly that.

The Google Ads Performance Grader is the most comprehensive free tool of its kind. In 60 seconds or less,the Google Ads Performance Graderperforms a thorough audit of your Google Ads account, identifying areas in which improvements can be made as well as highlighting successful areas of your account and how they compare to competitive benchmarks for your industry.

Try the WordStream Google AdsPerformance Grader for free today.