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What is Google Ads?

Google ads (formerly known as ‘AdWords’) is a suite of different ad types. The most popular ad types are search ads, display ads, youtube ads, shopping and app ads. Each of these ad types can be used alone or in combination with each other, mutually reinforcing their effect. 

As it follows from their name, each type has its own unique format (text, image, video or a combination thereof), and its unique objective. Let’s take a closer look at each of these ad types.

Types of Google Ads

There are four main types of google ads (AdHouse specialises in all four of them):

Why Use Google Ads?

Google prioritises paid results over the organic ones, showing them on top of the search engine results page (aka SERP). As a result, they are more easily found by searchers.

Ad results are easy to recognize because they come with a little note right next to them indicating these results are sponsored (see below for more info).

Google Search Ads

Google search ads are the most universally used type of a google ad. Broadly speaking, search ads are used to capture demand. Businesses utilise this type of ad when the product or service is already known to the general public and they are searching specifically for that product or service.

Let’s imagine the client is looking for a pizza place. They pull up their mobile phone, key in ‘buy pizza’, and pick the restaurant they like most.

In this case demand already exists as the user knows what he/she wants and is looking for a specific product or service.

Our job is to capture demand, in this case through Google Search Ads as shown on the image below:

Fig. 1. Paid results on the Search Engine Results Page (SERP Page).

What do I pay for with this type of ad?

Google Search ads fall within the category of PPC advertising, whereby you pay only when someone clicks on your ad. If your ad shows up on the client screen, but s/he doesn’t click on it, you won’t get billed for it. 

What is the cost per click on Google Search?

The price you pay per click is going to depend on your niche. The lower the competition, the lower the cost per click. 

Conversely, the higher the competition, the higher will be the cost of each click. In certain niches, such as software development or adoption, clicks can get as high as $50-$100 per click, and we’re talking about just clicks, not necessarily the conversion.

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Why is Cost Per Click growing year over year?

More and more advertisers are going digital, thus increasing the level of competition. Hundreds, if not thousands, of new websites are getting launched every day, thus increasing the demand for digital advertising. 

During COVID-19 digital advertising was booming, with businesses going online and utilising paid ads as literally one of the few ways to get in front of their clients’ eyes. 

The reverse side of that was the rise of cost – the number of businesses advertising online kept growing, while the number of people present online remained relatively stable. 

What Types of Search Ads Are Most Effective?

We’re using the following 3 types of search ads: 

  1. Responsive Search Ads 
  2. Dynamic Search Ads
  3. Call-only Ads

Responsive search ads is our default type of ad. Before 2022 there was one more type – expanded search ads, which was discontinued by Google on June 30, 2022.

What is a responsive search ad? 

A responsive search ad is a set of different headlines and descriptions that are automatically mixed and matched to best respond to searcher’s queries. Google’s AI automatically determines which keyword would most efficiently respond to clients’ needs and utilises the best performing pair of headline/description. 

What is a dynamic search ad? 

A dynamic search ad is based on Google’s Index of your website. In other words, keywords are automatically pulled from the content of your website. Headlines and URLs will be generated automatically and the only thing you will have to provide is ad descriptions. 

For dynamic search ads (DSA for short) to be effective, your website content needs to be well optimised – all titles, headlines and product descriptions need to be done properly and contain the keywords you want to appear in search results for. 

What is a call-only ad? 

A call-only ad is a mobile-only type of google search ads. It allows users to get in touch with the business via the phone by just clicking a phone number that shows up in search results. Again, it’s a mobile-only format, meaning that this type of ad won’t show on desktops. 

The convenience of this format is that the click converts into the phone call directly, without the need to visit the website. Generally this type of ad is useful for lead-gen businesses, where users need to talk to a company representative/sales person.

Google Display Ads

What are display ads? 

Display ads is a broad category of adverts that include images and videos. Images can be static (JPG) or animated (GIF). 

This type of ads shows on the so-called Google Display network, which covers millions of websites, apps, videos and Google owned properties such as Gmail and YouTube. 

Types of Display Ads

There are two types of display ads: 

  • Uploaded Display Ads 
  • Responsive Display Ads 

Uploaded image ads can be static JPEG or animated GIF files. 

Responsive display ads are built using either static images or videos. Animated GIF images are not supported. 

Uploaded Image Ads

This type of display ad is essentially a static banner, which is tailored to specific placements – your ad can show as a square or rectangular image, depending on the place where it shows on the website/app. There are currently 20 different types of uploaded display ads plus 8 more regional variations. 

This type of ad gives you full control over how your ad is displayed. On the other hand, preparing 20 different ad variations is time consuming and is not always expedient. That’s where responsive display ads come in. 

Responsive Display Ads

Responsive ads, as its name implies, automatically adjust their size depending on the placement. 

To create a responsive ad, you need to upload two image variations – rectangular and square – and the system will use those images to create an ad that adjusts to its placement. 

Compared to uploaded image ads, responsive ads take less time to prepare; however you don’t have full control over how your ad looks. 

Fig 2. Responsive Display Ad

What am I Charged for With Display Ads? 

With most display ads you will be charged every time a user clicks on your ad. The good news is that the cost per click on the Google Display Network is a lot lower than on Google Search and for the same budget you can purchase a lot more traffic! 

When Display Ads Are Used? 

Display ads have phenomenal reach! Google claims that its display ads reach up to 90% users worldwide, giving you access to audiences that no other Display Network will ever have. 

Display ads are used to build brand awareness. In some cases they will also generate specific conversions, such as purchase, or form submissions, but this goal is secondary to getting top-of-mind awareness.

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YouTube Ads

YouTube is the second largest search engine after Google and the second most frequently visited website worldwide. With so many people visiting it every day, YouTube advertising is a powerful way to reach out to your target audience and promote your product or service. 

YouTube is the second largest search engine after Google and the second most frequently visited website worldwide. With so many people visiting it every day, YouTube advertising is a powerful way to reach out to your target audience and promote your product or service. 

What Are YouTube Ads? 

YouTube ads are a part of the Google Ads suite, which is shown on YouTube videos (before, during, or after the video). There are a total of 6 types of YouTube Ads, and each ad has its own function, purpose and billing nuances.

Fig. 3. Skippable, Pre-roll Instream YouTube Ad

Types of YouTube Ads:

  • Skippable in-stream ads
  • Non-skippable in-stream ads
  • In-feed video ads
  • Bumper ads
  • Outstream ads
  • Masthead ads

What am I Getting Charged For With YouTube Ads?

There are two main events that users are getting billed for: 

  1. Interaction with the ad. An ad interaction is counted when a viewer watches 30 seconds of your video or clicks on it (whichever happens first). This is the so-called Cost-Per-View, or CPV, bidding strategy. 
  2. Number of impressions. You pay based on how many times your ad was shown to the user, irrespective of whether there was an interaction with your ad. This scenario happens if you’re using Target CPM, Target CPA or Maximise conversions bidding. 

How YouTube Ads Target Users

There are actually quite a few ways how users are targeted by YouTube: 

  • user demographics (age, gender, parental status, household income)
  • detailed demographics (shared traits: college students, new parents etc) 
  • interest-based targeting (affinity/custom affinity segments, in-market, custom segments etc)
  • your data: based on pages visited, videos viewed etc. 
  • customer match – uploading client lists
  • similar audiences – audiences similar to your client lists

Google Shopping Ads

Shopping ads are a hybrid of search ads and display ads: triggered by keywords in the URL/Title/description, they show an image of the product along with its textual description. 

This format is a must-have type of ad for any business working in the e-commerce industry.

Shopping ads are a hybrid of search ads and display ads: triggered by keywords in the URL/Title/description, they show an image of the product along with its textual description. 

This format is a must-have type of ad for any business working in the e-commerce industry. 

Where Do Shopping Ads Appear? 

Shopping ads show on the search results page (SERP page) as well as on the dedicated shopping tab of the search results page, search partner websites, shopping services and apps, and even YouTube. 

This type of ads will only show if the keyword has a strong commercial intent. One of such examples is shown on the screenshot below: 

Fig. 4. Shopping ads

How Do Shopping Campaigns Work?

Shopping campaigns feature a product or a set of products you want to promote. You can promote all products or a certain subset of products, e.g. do a summer sale, offer discounts on certain items or offer free delivery etc. Shopping results show based on keywords with a clear commercial intent. 

What are the types of Shopping Ads? 

There are currently 2 types of shopping ads – smart shopping ads and standard shopping ads

Smart shopping ads perform in semi-automatic mode, where Google decides who to show the ads to, when to show these ads and what products to promote. Compared to the standard campaign, this campaign offers fewer controls to the advertiser. 

Standard shopping campaign, in turn, allows you to have greater control over your campaign, however campaign management requires more time. 

Can I run Smart Shopping and Standard Shopping Simultaneously? 

Yes, you can run both campaigns side by side. 

Are Shopping Ads Better Than Search Ads? 

In many ways they are better, especially for ecommerce businesses. Traffic from these campaigns is often significantly cheaper, while its quality is clearly not worse, or even better compared to search campaigns. 

Do You Pay for Google Shopping? 

Google shopping listings can be shown as organic (free) results or as ads. If you choose to run Google Shopping ads, you will be charged on a cost-per-click (CPC) basis, meaning that you will pay only when a user clicks on your ad. 

Your shopping listings can also show organically in the shopping tab of the search results page, and this type of listing is free. 

What Do I Need to Start a Google Shopping Campaign? 

You will need a Google Ads account as well as Google Merchant Centre. Products are pulled into the Merchant Centre (MC), while you control campaign delivery from your Google Ads account. The two entities need to be linked together. 

Are Google Ads Worth It for My Business? 

Yes, ads help businesses grow, however a lot also depends on the type of business you’re running. One of the most important considerations is your average order value (AOV) and/or lifetime value (LTV). Having this information, we will be able to figure out if YouTube Ads will help your business advance. Let’s take a look at several examples: 

Example 1: 

Product cost: $10

Cost of Goods: $5

Avg. CPC: $5

To generate a conversion in this case, in the best case scenario we will need 30 clicks. Given the CPC, we will need to have spent at least 30 clicks * $5 CPC = $150 to acquire a new sale. 

Conclusion: you will have to spend $150 to generate a sale that will bring in $5 in revenue. This will cause a loss of $145, which doesn’t make Google Ads expedient. 

Example 2: 

Product cost: $1500

Cost of Goods: $500

Avg. CPC: $5

Let’s assume we will need the same 30 clicks to get a sale. This means we will have to spend the same $150 to acquire a new sale. 

In this case a $150 investment in Google ads gets us a $1500 sale. This is clearly profitable and we can aggressively scale this business through Google Advertising!

Which ad type is right for me? 

It really depends on your business. We will definitely recommend search ads for any business, and additionally Google Shopping if you are in the ecommerce business.

Which type of ad is most effective? 

If we were to pick one ad type out of the entire Google Ads Suite, it would be a Search Ad. The success of the ad campaign depends more on your business model rather than a specific type of ad – ads merely serve as a means to quickly get your message across to your target audience. 

Can I advertise on Google for free? 

There are two options when advertisers can use Google ads free of charge: 

  1. Use of promotional codes. Google incentivizes new users to join the Google Advertising network through various promotions. Under their most recent promotion Google is giving $500 in ad credits. Whenever you start a new account and start advertising, Google will automatically add an extra $500 to your billing account. 
  2. Use of Google Grants. For non-profit organisations Google offers special grants of up to $10,000 per month for in-kind advertising. This applies only to non-profits and has a series of limitations.

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