What Is Google Ads, How It Works and Its Benefits

Learn what Google Ads is, how it all works, and the many Google Ads benefits for businesses looking to grow online leads, sales, and brand awareness.

What Is Google Ads?

Google Ads (Used to be Google AdWords) is Google’s advertising solution and program for businesses to advertise on its many products and wider search network.

Through the ad platform, you can advertise to the world’s two largest search engines: Google and YouTube. 

If you want to advertise on Google’s other products such as Gmail, the program is the only way. 

There are more ads on Google Search and its other properties than ever before in different forms, which means if you’re not utilizing search and other types of ads in your business, your business will feel the impact.

For many businesses advertising on Google has become necessary to stay competitive rather than just a way to increase revenue and reach.  

Learn more about search engine marketing or about the alternative search engines you might want to use for advertising. 

In this article, we’ll explore what Google Ads is through its benefits. But first, let’s see how it all works. 

How Google Ads Works In A Nutshell?

In Search Ads, you aim to place your ad at the highest search result positions as possible while serving users’ search intent as closely as possible. And the goal for Display Ads is to combine user’s interests with ads they might be interested in receiving. 

To put it simply in Google Ads, advertisers bid on keywords to have a chance to place their ads on search results pages or other websites.  

An ad auction happens whenever a user searches anything on Google Search or visits a website in the broader network. 

At every auction, Google calculates an Ad Rank for every ad in the auction, which determines if the users see your ads in the first place. 

There are currently six factors that define an Ad Rank: 

  1. Your Max Bid
  2. Ad quality and landing page experience 
  3. Ad rank has to be higher than the thresholds
  4. Competitiveness 
  5. User search context (For example, device, location, time of day, and search intent)
  6. Expected impact of ad formats and extensions

Then your ads may appear on top search results if your Ad Rank is high enough. There are currently four available ad slots on top of the results. And more ad slots are available on the bottom of search results pages. 

One key component of getting ads to rank higher is to optimize ad quality. You can monitor a metric called Quality Score, a combination of ad quality metrics from past performance. 

Quality Scores is on a scale from 1 to 10, and it determines how relevant your ads are. Google doesn’t use Quality Scores themselves in an active ad auction, which is vital to understand. But it instead helps you optimize your overall ad quality. 

Google Ad Types

The platform offers many places to advertise online through the many Google services and its vast networks of over two million third-party apps and websites.

Google Ads may appear on all Google properties and its network of third-party websites.  

All the Google services you can place ads on: 

  • Google Search
  • Gmail
  • Google Shopping (Learn more about them)
  • Google Maps
  • YouTube 
  • Google Discovery

Meaning depending on the style of content you’re producing, and you will find the perfect ad type to fit your campaign needs. 

Also, the variety of different ads in your content distribution strategy can help you keep your marketing and advertising efforts always fresh, with different formats of ads targeting people at various stages of your sales funnels. 

All the available campaign and ad types: 

  • Search Ads (Text Ads)
  • Google Shopping Ads (Product Ads)
  • Video Ads ( Learn more about YouTube Ads)
  • Display ads (Image and Banner ads)
  • App Ads (Through Google AdMob)

Why You Should Use Google Ads To Grow Your Business

In short, you should use Google Ads to grow a business online. Let’s look at more of the core benefits and the main reasons why companies should use it as part of their online strategy. 

If you want to achieve sales, increase brand awareness, test new business models online, or to collect data, the ad platform is a definite channel to use. 

Google Ads Benefits

  • Costs and ROI
  • High-level Of Control And Management
  • Fast Results
  • Level Competition
  • Local Advertising 
  • Increases Brand Awareness
  • Targeting
  • Remarketing
  • Analytics
  • Conversion Tracking and Optimization
  • Benefits for SEO And Content Marketing
  • For Scaling Profitably
The 12 Benefits of Google Ads

Google Ads Costs and ROI

With many campaign settings and bidding options, companies using Google Ads can achieve results with varying budgets, high and low. 

For small businesses, you can start advertising as low as a couple of bucks a month, but your effective results might not have an impact you might want, but you can do it. It leads the ad platform to be flexible for businesses of all shapes in all online ads needs. 

For large companies, the benefits multiply as you can enable scaling of ad spends profitably, and when compared to traditional advertising, Google Ads are cost-effective. 

Effective ad costs depend on: 

  • Competition
  • Bids
  • Quality scores

Individual cost-per-clicks (CPC) vary across industries, niches, and user search intent widely. 

For example, if you’re in finance, you will find that click costs will be high compared to less capital intensive industries. 

And search intent matters in costs: a keyword that leads to purchase will be higher than keywords that customers use at the beginning of their customer journeys. 

But even the most expensive keywords will have cheaper keyword opportunities within them, you just need to keep an eye out for them in the data or using the Keyword Planner. 

The key is to find keywords that perform the best according to your goals as cheaply as possible. Finding a balance with purchase intent and other stages in your sales funnel is a method of decreasing costs. 

Most companies advertising on Google will receive a return on their ad spend, which makes Google worth the money. Usually, what we see happening is that goals do not align with advertising, or bad optimization is the leading cause for not receiving a return. 

There are common problems in ad campaigns that might increase costs and learn more here.

High-level Of Control And Management

As a whole, Google Ads offers its users a lot of opportunities to control and manage their campaigns effectively.

And, for example, you can take full control of: 

  • How much you spend and how large are your bids. 
  • Stop advertisement with a press of a button
  • Campaign goals 
  • Control conversions
  • Control individual keywords and target audiences
  • How your ads look (As long you won’t break any policies )
  • Make sure you represent your brand well

With this level of control, you can manage and optimize your ads and campaigns to get the most results out of it. 

But there’s another option as well. As there’s a lot to manage in a Google Ads campaign, Google has made it very beginner-friendly. 

Through features like smart bidding, in which you choose a goal like conversions, Google does the bidding for you to maximize the campaign’s performance. 

The benefits of these automated campaigns are that the results are transparent the same way as you would’ve been in charge. 

Meaning you can closely track the performance and modify anything that doesn’t seem right. 

Outsourcing Google Ads

When it comes to managing your campaigns, an option always arises, should you outsource it? 

The smaller the budget, you will usually get a more by just learning by doing it yourself. The more you learn by doing, the more you can be comfortable with Google Ads, and scale ad spends profitably. 

Learning a performance marketers’ mindset has a lot of value for your business. 

But of course, that is not always possible, especially when budgets get larger and campaigns more complex as your digital marketing strategies grow to facilitate faster growth. 

In these cases, an agency will help you deal with scaling the ads and their performances, although building an online marketing team within the company is beneficial. 

A benefit is that controlling who manages your campaigns is easy. 

Fast Results

Like most paid online advertising methods, Google Ads is fast. And what do we mean by fast? 

It’s quick to produce results. 

Creating the necessary accounts and setting up the first campaign happens quickly in a couple of hours. If you have followed the policies correctly, you should be able to have a live campaign pretty quickly. 

In a matter of days, you can analyze how your ads are genuinely performing to make necessary edits and optimization efforts. 

Before changing any bidding settings, Google recommends leaving your campaign alone while it’s in the learning phase. A campaign in Google Ads has a learning phase in which it gathers performance data to optimize your ads. 

Even considering the learning phase, the whole process of gaining results is fast. And you’ll quickly know what works and what doesn’t according to your business goals. 

For example, search engine optimization (SEO) or organic social media marketing won’t most likely produce any results, in the beginning, making it very hard to optimize until said results come. 

Therefore, the speed of results from Google Ads can kick start an online business faster than organic methods. 

And the speed of testing new ideas helps you achieve your goals faster. 

Level Competition

One of the greatest benefits of Google Ads is its way of leveling competition. While larger companies with larger budgets can achieve more horizontally with Google Ads, a small business can take advantage of very targeted niches instead. 

An important thing to understand is that in Google Ads, you can’t just pay yourself to the top. While the bid amounts are crucial, it isn’t the whole picture. 

Companies advertising there need to optimize their Ad Ranks and Ad Quality to have the chances of getting the most wanted ad spots. 

Higher scores mean that even smaller companies can achieve more top rankings for their ads if their campaigns and landing pages are correctly optimized.

Not advertising on Google Ads will most likely hurt you more than you might think. Even if you’re reaching a great deal of organic traffic, your competitor’s ads on those keywords valuable for you might decrease the overall traffic you gain from the search results. 

Especially on keywords with the highest intent, like in online shopping, visitors have multiple options to choose from before they reach the organic results. 

But let’s reverse it the other way around: you can do the same, enabling you to compete with established brands and companies who already have extensive brand recognition within search results and outside of it. 

Performance Against Competitors

For example, an established business advertises on the keywords you’re interested in, you can look at the auction insights -tab to analyze how your ads perform against your competitors.

You can see statistics like: 

  • Impression share
  • Overlap rate
  • Position above rate
  • Top of page rate
  • Abs. Top of page rate
  • Outranking Share

Going through these metrics, you can evaluate the true positions of your ads against your competitors. By combining the data with your quality scores, you will understand more about what you need to do to achieve a higher position than your competitors. 

Local Advertising 

Google local advertising benefits all businesses that rely on local traffic to make sales. 

With Google Ads, you can advertise locally to maximize foot traffic to your business at the most profitable times or increase local brand awareness. 

Advertising at the right time when customers search for something you’re selling will increase your sales locally dramatically. Local search has high purchase intent, especially for service-related keywords as customers are looking to fulfill a need nearby with minimal effort.  

Especially utilizing ads on Google Maps in your campaigns, you can attract customers who are already looking for directions for nearby products and services. Making sure your services are on top every time potential customers search them on Maps.

Discover all you need to understand about Google Maps marketing.

Also, Google has made advertising locally simple as just by accessing your Google My Business account and clicking ‘create ad’ and your minutes away of creating a local ad with a reasonable estimation of your needs like: 

  • Approx location and ad range
  • Keyword theme
  • Optimal budget to reach most customers

Of course, you can always change the settings of your local ads. 

Having a Google My Business (GMB) profile has many other benefits for increasing local search visibility. Learn more about GMB here.  

Google Ads Increases Brand Awareness

While the Search Ads work best for targeting customers at the right time, and in time, it will also increase your brand awareness online, but with the use of Display Ads, you can build brand awareness online faster.

A combination of Display and Search Ads lets your business cover more ground for growing brand impressions online.  

When you want to increase brand awareness, Google Ads should be one of the first places you start advertising. 

Using Display Ads finds you data on what websites your customers and users from the ads, use daily, and can lead you to find exciting partnerships for guest blogging or advertising directly on these third-party websites.

You will also discover new influencers, for example, their websites or YouTube channels. If your ads performed well on these influencer’s channels, contacting them for creating an influencer marketing strategy is beneficial for growing your brand online more. 

The more you understand your target audiences’ behavior, the better digital marketing strategies you will have. 

Google Ads Targeting

The use of targeted keywords in Google Search Ads is a powerful method of finding customers at the optimal time when they’re searching for services and products. 

Keywords themselves come in many formats, you will have your more generic keywords that match a broader range of search terms, or you can target precise queries that are profitable for you.

Finding the right keywords for your business should be the goal of any Google Ads user. 

The benefits of Google Ads for keywords are that you can start with a broader set of keywords and go deeper to find profitable long-tail keywords that usually have less competition and would cost less. 

You will have access to all the search terms that triggered your ads, and you will see the specific performance of each keyword. It makes finding the perfect keywords reasonably simple when you acquire enough data to analyze.  

Keywords are just the starting point for targeting. You can delve into more specific targeting options to find the right audience for you. 

Additional targeting options: 

  • Audiences
  • Demographic (Age, Gender, Parental Status, Household Income)
  • Location
  • Language
  • Devices
  • Ad schedules 

As you can see, the combination of targeting options matched with the best keywords can affect the profitability and reach you achieve from advertising on the platform. 

For Display Ads, there are more targeting options available: 

  • Placements 
    • For example, you’ll discover the websites, YouTube channels, and apps your Display Ads appear
  • Topics
    • Shows ads on content that matches chosen subjects. 

While Display Ads offer a similar ad experience compared to social media advertising, the Search Ads provide the users with a non-disruptive experience when searching for topics with intent. 

Converting users when such intent is present, is more likely. 

Google Ads Remarketing

Retargeting in online advertising is crucial; you always want to be on top of your customer’s minds after seeing your website. 

Within Google Ads, you can effectively retarget customers and users who visit your website or create more elaborate audiences utilizing different sales funnel steps.

While you should always use a retargeting campaign when using Google Ads, even if you’re not actively utilizing Google Ads, remarketing ads is something to consider to do regardless.

By advertising to those who visited your website, you increase your chances of converting them into sales.  

And remarketing ads don’t have to be simple, like creating the same ads to a retargeting audience. A little creativity goes a long way.  

For example, testing with different ad formats that Google ads have to offer, you can find the most optimal format for converting visitors into customers.  

Like depending on the audience and your products, a retargeting campaign with YouTube ads can be powerful. 

Having the power of Google Ads retargeting in your toolkit to maximize your return on ad spend is vital. 

Suppose you’re actively using or thinking of using Facebook Ads, or LinkedIn Ads, combining them with the retargeting ads from Google. In that case, you maximize the visibility for the user who has shown previous interest already. 

Google Ads and Analytics

Web analytics plays a massive part in using Google Ads, and its optimization for greater performance. 

A core benefit is that all the results you get from advertising, whether Google Search or Display Ads, leads you to be always on top of what you’re getting out of your ads. 

Analyzing your results from ads is made straightforward and easy to understand for beginners. The more capabilities you have for utilizing data in your business, the more you can use the data to your benefit. 

And you don’t have to rely on Google Ads itself to measure the real performance of advertising, as you can connect third-party tools to help you increase performance.

Connecting the very least Google Analytics to your account helps you further to see the ad performance through measuring behavioral metrics. 

For example, you could use behavioral metrics to follow how your users use your site from different keywords and other targeting options. Understanding the differences helps you discover new opportunities to use later on.

The gained data will help you increase your sales if that’s what you’re after, but also increase your other marketing activities across platforms. 

Using these analytics tools integrations with your ads, you can benchmark the results with other online marketing methods to see which one produces the most for you, increasing overall ROI. 

Next, let’s look at another reason for using Google Ads, conversion tracking, and optimization. 

Conversion Tracking and Optimization

Google Ads lets you track the conversions crucial to your business. Conversion tracking makes understanding the campaign performance easier through concrete terms and results. 

Not only can you track basic conversions such as sales or leads, but the platform also allows the creation of custom conversions. Custom conversions make ad optimization very useful. 

To get you started on custom conversions for ads, read through our nine google analytics goals and conversion ideas.

When you have your most essential conversions set up and gathered enough data, you can enable conversion-based bidding in your ad campaigns. 

Mainly, these conversion campaigns use conversion data to maximize results from ads with modified bidding and targeting. 

The combined use of custom conversions and conversion campaigns will increase the results you can achieve from ads. And importantly, improve overall return on ad spend to grow your business profitably. 

Benefits for SEO And Content Marketing

Combining the use of Google Ads with your SEO and content marketing strategy has many benefits for increased performance.

Direct benefits include: 

  • Finding new keywords with Keyword Planner
  • Discovering new search terms and keywords that worked earlier
  • Website optimization (speed of traffic helps you find out newly found issues faster and fix them right away)
  • Analyzing and creating profitable target audiences  

For example, you can use Google Ads to target keywords and find the ones that are the most profitable for you. And when you understand who your target audience is and the keywords they use, you can start expanding your SEO strategy to tackle them.

SEO content marketing can be costly; ideally, you want to make sure you’re targeting your content for the right keywords, especially in the beginning. 

And using ads to track the performance of specific keywords and their combinations to your bottom line, your content marketing ROI will drastically increase. 

When we look at specific keywords, especially long-tail keywords, they might be hard to find initially without ads. As keywords themselves are plenty, you need to have a system to collect and research them for scaling SEO and content marketing. 

But with ads, you can set a broad range of keywords for targeting, and in time, you will discover the search terms your target audiences use. And creating such targeted content with SEO in mind will help you grow online.  

Whether you use the keywords for ecommerce SEO or even YouTube SEO to grow your online presence, Google Ads helps you discover keywords that matter. 

Google Ads Allows For Scaling Profitably

As we have already discussed the benefits of speed and how speed lets you test new ideas quickly, new sales funnels, products, or new business models within your campaigns. 

Discovering a winning campaign that is profitable, but reaches new customers in a new way, will help you answer a question that most businesses should consider: is this scalable? 

Scalability in Google Ads is simple. 

If you create a campaign that performs better than others from earlier attempts, you can start pouring more into that campaign, which will scale the results you’re seeking. 

If you’re measuring the right metrics, and see a particular set of campaigns, ad groups, or keywords are producing them, you can divert the rest of the budget where you see results, or, you can start scaling your ad spend profitably. 

An important note, though, as you scale your ad spends, you might hit a wall at some point. 

For example, one profitable keyword and campaign can only go so far, as you deplete the potential customer base.

Therefore, you need to keep testing to find new profitable and scalable options for later use. 

Meaning, even if you discover a winning combination, never stop testing new campaigns with different settings. 

But at its core, scalability is a benefit of Google Ads. As you always have the opportunity to scale to reach a maximum campaign potential when the results match your clearly defined business goals.  


Nowadays, a strong presence in Google is crucial for every business type, ranging from a local service to an international conglomerate. And using Google Ads benefits all kinds of businesses to achieve their online goals. 

Online advertising has decreased the cost of advertising and democratized the way that every willing business can take action on their own to achieve growth on their terms online. 

In the end, Google Ads is one of the best ways to advertise online cost-effectively to gain new customers, increase revenues, or build a brand online.