What is AdWords?
AdWords is probably the best-known service from Google Inc. According to estimates, Google generates over 80% of its income with AdWords . Advertisers can display prominently placed ads in search results for specific keywords or keyword clusters. For every click on an ad, the advertiser pays Google an amount determined by a bidding system. The landing pages linked behind the ads are often specially designed for AdWords. For most companies, AdWords ads are an indispensable part of their marketing campaigns .

New name for AdWords since 2018: Google Ads
On July 24, 2018 , Google changed the name of its advertising offer: from AdWords to Google Ads . The background to the rebranding was a restructuring of the company’s business structures in the online advertising segment. The aim was to make access easier for advertisers. With the new name, Google has given its advertising a different logo. It is very similar to the old logo, so that the graphic recognition value is retained.

Since then, Google Ads has been the general term for all forms of Google advertising on all channels, including, for example, YouTube advertising and mobile advertising as well as advertising on partner websites. However, nothing has changed in terms of campaigns and ads. Only the user interface was optically adjusted due to the rebranding.

Nevertheless, the term AdWords is still widespread and continues to be used by both advertisers and agencies. After all, the Google AdWords advertising option has existed since 2000.

Development of Google AdWords
The first ad placement on Google took place in 2000. Until then, Google was completely ad-free. The company relied on text ads right from the start, which clearly stood out from the competition. In addition, the ads were already displayed according to search terms. While Google was still in charge of the ads in the early days of AdWords and advertised on the basis of CPM (cost per mile – thousand contact price), advertisers were soon able to take control of their accounts and manage their accounts.

Other important steps in AdWords development:

2002: AdWords runs in the form of auctions, billing takes place via pay-per-click

2003: AdSense is added – any websites can provide advertising space on their own pages and receive a certain amount from Google for their ads.

2008: Further criteria are included in the auctioning of the ads, e.g. the loading time of the website or the quality of the ad. In addition, ads that can be targeted to specific devices will be introduced in 2008.

2012: Adwords is extended to Youtube. In addition, the Product Listing Ads (now Google Shopping) are introduced, the product ads with images.

2018: Rebranding – AdWords becomes Google Ads

Sales with AdWords have risen in leaps and bounds since 2002. As an example, the comparison between 2002 and 2005:

2002: $ 400 million in sales

2005: $ 1.4 billion in sales

In the fourth quarter of 2019, revenue for the advertising business was approximately $ 27 billion .

Nowadays, AdWords accounts for the largest share of Google’s company profits . It is therefore not surprising that the visualization of the ads and the organic results are getting closer and closer and that the ads are given considerably more space.

As an example, a search result from June 2020:

Further information: New look for AdWords ads

How does Adwords work?
If you have registered an AdWords account, you select certain keywords for your advertising campaign. Depending on the keyword, the click price is between 0.1 cents and several euros. Realistically, you have to pay at least 7 to 10 cents per ad.

The price per click (CPC) depends, among other things, on the following factors: the quality score and the competition of the selected keyword. The costs are determined in a similar way to an auction.

Your booked ad will only be shown when a user searches for the term (keyword) you have specified. Your ad will be displayed in Google search or on one of the websites on the Google network. On the Google search results pages , you will find the advertisement above or below the organic search results . In the Google network, your ad will only be shown on the websites whose content it matches.

AdWords costs
What does AdWords cost? What does the keyword cost ? Or: What does the AdWords campaign cost? These are common questions in everyday agency work. After all, customers and AdWords users want to know what budget they should plan for it and what the cost-benefit ratio of Google’s online advertising looks like.

Specific statements on questions such as “What does AdWords cost?” Are not possible, as the price for the ads depends on numerous factors, such as their size, quality and the keywords.

The fact is: There are no costs for using AdWords itself, i.e. the advertising tool or the AdWords account. Only the click on the ads generates costs for the advertiser.

You can find detailed information on the costs in the dictionary entry AdWords costs .

Use Adwords without a website
Typically, you need a website to serve ads with Google AdWords. After all, the user has to get to your online offer via the ad. However, with AdWords Express (now Smart Campaigns) , a local ad-targeted advertising offering from Google, a website is not essential. In this case, you can create a local page with Google My Business and advertise it with AdWords Express. Your ads will then appear in Google Search and Maps.

Further information: AdWords Help – Create a website for your ads

The Google advertising network
Advertisements in AdWords can take place in different places. Where the ads are to appear can be controlled via the assignment in groups, more precisely in the two groups Google Display Advertising Network and Google Search Advertising Network.

Difference between display network and search network
Google search network
This network includes Google search results pages , search pages from other Google websites (e.g. Google Shopping and Google Maps) and search websites or apps that place ads through a partnership with Google. The best-known partners include eBay classifieds and

Ad formats: e.g. text ads, image ads, videos, shopping ads (product listing ads)

In addition to the normal search ads that appear on the basis of booked keywords, there are also dynamic search ads . Dynamic search ads are displayed on the basis of the website content, that is, Google crawls the page, classifies it thematically and delivers the corresponding ad for search queries that match it.

Display network
On the one hand, Google’s own services such as YouTube and Gmail, and on the other hand, partner websites are located in the Google display network . These partner websites can be large portals (e.g. Amazon, Spiegel Online, Heise) as well as private websites. Participation in the AdSense program is required to be able to run ads on these partner websites .

Ad formats: e.g. text ads, banners, videos

AdWords remarketing
Remarketing enables you to target visitors to your own website on another website. What is shown to the visitor in what form by means of remarketing ads can be variably adapted. For example, it is possible to display products that have been viewed but not purchased. The content of the advertisements is therefore based on user interests and not on the page content.

Prerequisites for using remarketing via AdWords:

either integrate a remarketing tag from AdWords into the website

Enable remarketing in Analytics
Mobile advertisements
Mobile advertisements can be served via the display network and the search network. Although the advertising space is smaller than for advertising on the desktop, the mobile ads still take up a lot of space due to the small screen size.

Further information: Google AdWords goes Mobile

Google advertising policies
Ad placement on AdWords is subject to certain advertising guidelines. The ads are checked manually and automatically. The guidelines are divided into the following broad areas:

improper practices
illegal content
restricted content
editorial and technical requirements
Google does not allow ads for weapons, intoxicants, online gambling or certain content only for adults.

A major issue in the field of advertising guidelines is trademark infringement . Advertisers must have permission from the trademark owner to advertise with the name.

Further information: AdWords guidelines

AdWords quality score
The placement of advertisements on AdWords does not only work according to the auction principle, but includes the so-called quality factor in the decision about the ad space. With this, Google also wants to prevent too many irrelevant ads from appearing in the top positions that were bought through a high bid.

How the quality factor works
The quality factor is indicated on a scale from 1 to 10 , the higher the better the quality. First and foremost, it makes a statement about the relevance of the selected keyword in relation to the target landing page . Furthermore, the expected click rate and the user experience on the target page are included in the quality factor.

An optimal quality factor is determined by the agreement of:

Query the user
booked keyword
matching ad text
matching landing page
positive user signals (e.g. long interaction with the page)

Advantages of a good quality factor
A good AdWords Quality Score shows how relevant the ads are and has a positive effect on the CPC (lower costs for the same keyword with a better Quality Score), the ad position and the first page bid.

Important for the AdWords account history
The quality factor is saved in the account history, ie Google keeps a bad account performance with a bad quality factor “in memory”. For this reason, it can take a long time for a badly / not optimized account to increase the quality factor through account optimization or negative developments can damage the account in the long term. A regular care and AdWords optimization is essential to achieve a high quality, reduce costs permanently and to achieve a good display performance.

Further information: New function for Google Adwords

AdWords: Account creation and management
The AdWords account is divided into campaigns that contain ad groups . These ad groups contain the keywords and ads.

AdWords account structure

It often makes sense to use your own company website or shop as a guide when structuring. A good, clear structuring of the account not only helps with your own administration, but also with the positive assessment by Google.

Put simply, it works as follows for an online shop for shoes:

AdWords account structure example shoes online shop

Keyword options in AdWords
The following considerations are fundamental when choosing the right keywords for your campaigns: Put yourself in the shoes of your target group and think about how you would search for your product / service.

Once you have decided on a keyword, you can use the AdWords Keyword Options to make restrictions, which in turn affect how your ads appear.

Google offers the following keyword options:

Perfectly fitting:

Search query contains exactly the selected keywords. Neither before nor after may be another word. Function words between the keywords are possible. In spite of the term “keywords exactly matched”, it is also possible to play out variations, e.g. synonyms.

Largely suitable:

The default keyword option in AdWords. The ad is shown whenever your keyword matches the search query in some way.

Modified largely suitable:

Small restriction for “largely matching”: The search query can contain keyword variants such as plural / singular, misspellings. The order is still irrelevant.

Matching phrase:

The search query must contain the keywords in exactly this order. In the search, however, additional terms may appear before or after the keyword.

Negative Keyword:

E.g .: – cheap

The ad will not be shown if the search query contains the minus term.

Google Merchant Center
The Merchant Center is relevant for online merchants who want to place ads through Google Shopping. After registering, retailers can create a data feed and use it to upload their products.

In order for products to appear as shopping ads, however, they have to meet numerous requirements and transmit a lot of data, e.g.

GTIN – global article number
Product title up to 70 characters long
fixed, unchangeable price
Product group
Product condition
More information: Merchant Center Help

AdWords ads with ratings
You can use the ad extensions to display ratings in the AdWords search results: in the form of star ratings and further information on the number of stars and the number of ratings.

An example:

These are seller ratings, but they are only displayed under the following conditions:

at least 150 reviews in the last 12 months
3 stars on average
Reviews must come from portals that Google uses as a source, e.g. eKomi, ShopAuskunft, TrustPilot or Google’s own program for customer reviews
Showing reviews in AdWords can do the following:

Trust advantage – ratings increase users’ trust in the provider
Increase in the click rate – if only because the stars are eye-catching
Opportunity to stand out from the competition
Google AdWords Editor
With this free tool from AdWords you can manage your AdWords account offline . This makes it much easier to make extensive account changes compared to optimizing in the account itself. In addition, changes can be implemented faster with the AdWords Editor and you have better control over the changes.

After the changes, the data can be uploaded to the account.

Further information: AdWords Editor

Adwords Express – Smart Campaigns
AdWords Express is a greatly simplified version of the “normal” AdWords that has existed since 2011. It promises a much faster, easier creation of advertisements and is therefore intended for companies that want little effort with advertising. In addition, AdWords Express is limited to local / regional search.

It is also possible to use AdWords Express without a website. However, a Google MyBusiness profile is required. This profile is then the landing page of the ad.

The steps to display are:

Select industry
Create ad copy
Set a budget
In all of these steps you are guided via the express menu navigation.

AdWords Express offers advantages through a greatly simplified ad creation, but in this version there are no options for optimizing the account . You don’t even choose the keywords yourself. In turn, the lack of customization options means that it is not possible to optimize the cost of the ads.

Change from AdWords Express to Smart Campaign – Smart Campaigns
In January 2019, AdWords Express was renamed Smart Campaign or Smart Campaigns. In addition to the renaming, the smart campaigns also have an expanded function. And: Instead of a separate tool, the campaigns are now part of Google Ads (in line with the 2018 rebranding, in which all forms of advertising were combined under Google Ads).

Extended functions with Smart Campaigns compared to AdWords Express:

Advertisement planning (planning option at the time of display – certain days of the week, certain times of the day)
Measurement of Google Maps interactions (e.g. when clicking on the company on Maps)
Measurement to calls
with Google Analytics, actions on the company website can be measured and evaluated
Further information: Smart campaigns in the Google help pages

Adwords Targeting – target definition in Google AdWords
The targeting functions in AdWords enable a targeted alignment of the advertisements with regard to the usage situation , the advertising environment and the target group.

Usage situation: relates to the user’s environment – device, location, time of day, language

Advertising environment: relates to topics, keywords, placements

Target group: relates to the characteristics of the target group, e.g. gender and age; settings for remarketing are also possible here.

The more specifications, the less wastage. However, it can also happen that the filters restrict the display of ads too much and therefore reduce the reach. It is therefore important to precisely define the target group at the beginning of a campaign and to optimize the campaign accordingly.

Adwords Tools
Google itself provides numerous tools to facilitate the adjustments and settings in AdWords. Keyword research is of course particularly important in this context. For this, Google offers, among other things:

Keyword planner
Google Trends
Ad preview and diagnostic tool
Relevant for ad creation and ad optimization include:

Ad2Check : checks all URLs in a project that are linked to an AdWords ad, whether the pages are accessible, detects all error codes
AdWords Editor
Bid management systems (e.g. intelliAD, Marin, Search Ads 360 – campaign management tool from Google, formerly DoubleClick Search)
Certifications for AdWords
With its Ads certification, Google offers accreditation for individuals as part of the Google Partner Program . The certification helps to assess the Adwords knowledge and to be able to present oneself to customers as an experienced Ads consultant or AdWords agency .

The AdWords certifications are available free of charge in the Academy for Ads . The certificate is valid for 12 months. There are various partial exams, whereby the AdWords certificate always requires passing the Ads basic exam + another exam on one of the following topics:

Search engine advertising
Display advertising
Video advertising
Mobile advertising
Advertising on Google Shopping
Passing the exam is also the basis for being able to integrate a Google Partner logo banner on the website. With this, visitors immediately recognize that they can expect certified specialist knowledge on the subject of Google AdWords.

Why should you use AdWords?
AdWords is good for several situations:

If the website is new or has little visibility in the organic search results, you can buy yourself the top of the SERPs with AdWords . This means that your own company is also noticed when the competition in the organic area is better positioned.

Large and globally known brands in particular secure their own brand keywords in order not to lose them to the competition, for example Coca Cola. Even for smaller companies, a positive effect on brand perception can be measured if a brand keyword is stored with an AdWords ad, even if you rank first in the organic area.

AdWords is also useful for acquiring new customers . The potential new customers do not yet know their own brand, but still get to the website through product advertising via AdWords.

The advantages and disadvantages of AdWords at a glance

targeted addressing of your target group
Advertising can be implemented / set up quickly
long range
Ability to position quickly in the search results
Cost control through a fixed monthly budget
You pay per click (based on success)
extensive reporting
high flexibility
good evaluation options due to numerous data

Incorrectly chosen keywords can result in high costs
sometimes very high click prices from many competitors, e.g. in the areas of finance, insurance, legal advice
ongoing control and optimization necessary

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