Stop Wasting Money This Is How Google ads Works

If you are wasting money on Google Ads the problem is not Google Ads as it is the way your account and campaigns are structured and optimised. 

The reason why Google Ads is becoming more and more popular and continues to grow each year with an estimated $81 billion to be spent by businesses in 2024 on Google Ads is because it works. 

Google is growing every year is because more and more businesses are seeing success with Google Ads every year. 

So if you are having a bad experience with Google Ads the issue is not Google Ads but your campaign. 

When I review campaigns all of the mistakes that I see in Google Ads come from the core issue of people not realising how Google works.

Once you understand the core concepts of the Google Ads algorithm you can better create campaigns for your business.

The ultimate goal for Google Ads is match a user’s search enquiry with the perfect product or service. 

As Google knows that if they can continue to do this, they will then continue to see growth in their ad revenue every year.

When you understand this you then realise why Google has structured their platform with a “user satisfaction” metric which they call: “ Ad Rank”

The most important thing that you need to understand with the Google Ads algorithm is that each auction is won not by the company who is willing to pay the most money.

This is because when a user completes a Google search Google decides which ads to show using this formula:

CPC Budget + Ad Rank = Ad Position

The biggest take home message from this is that your Ad Rank is More Important than your budget. 

Which is something that you may hear me say on this channel time and time again that increasing your budget will not make a bad performing account better, it will just mean that you are now wasting more money. Because your budget only magnifies the current results you are seeing in Google Ads. 

For success in Google Ads and to understand how it works you need to focus on the Google’s mantra of “Better Ads means Better Rank”

The 3 things that you need to focus on to improve your Ad rank are:

1. Your Ads expected CTR

The reason for why this metric is so important is because remember Google only gets paid when someone clicks on your ad. So why would Google even worry about showing your ad if your competitors all have a higher CTR. So to increase your CTR use Ad Copy that:

•  Focuses on the users specific search term
•  Gives them some further relevant information
•  Creates urgency for them to click on your ad right now

2. Your Ad’s Relevance to the user’s search 

This is why the structure of your campaign is so important. While it does take extra time to set-up different ad groups that are targeting specific services or products, by setting these up you are then able to tailor your ad copy for individual searches and then send them to the most relevant landing page.

3. The Quality of your landing page

This is the area that many campaigns fall down is that they just don’t have a good user experience and similar to the point about CTR, why would Google show your ads if they are sending people to a website that is not engaging and that when people land on the page they very quickly leave.

It's important to Google because if they are recommending low quality websites people are very likely to blame Google and not the website owner. 

Think of it like this if you ask your friend for a restaurant recommendation and you go with high hopes and the food, service and location is all terrible how likely are you to ask your friend for another restaurant recommendation… you are never going to ask them again. 

This is also true for Google as they know that if they continue to show ads that send people to poor quality sites people will stop using Google as a resource for information.