Adwords - The Business Driver

Google AdWords is Google's advertising program. AdWords lets you create simple, effective ads and display them to people already searching online for information related to your business. So how is it possible to show your ads only to the most relevant audiences? The answer is keyword-based advertising.
When a searcher visits Google and enters a query — say, good beginner guitars — Google displays a variety of relevant search results, such as links to articles containing guitar purchasing advice, or websites dedicated to novice musicians. Google also displays AdWords ads that link to online businesses selling guitars, music lessons, or other products and services related to the query.
For example, imagine that you own a music store carrying a large selection of guitars. You could sign up for an AdWords account and create ads for entry-level guitars in your inventory. For each of your ads, you might select keywords (single words or phrases related to your ad's message) such as beginner guitars or entry-level guitars.
Once you activate your account, your ads would be eligible to appear. That is, the AdWords system would constantly seek out search queries related to the keywords you've selected, then display your ads to highly targeted audiences. In short, you'd be advertising directly to an audience already looking for you.


Using Google AdWords for the first time may introduce you to some new terminology. Here are some of the most commonly used AdWords terms.

Cost-per-click (CPC): Under its cost-per-click (CPC) pricing model, AdWords charges your account for each click your ad(s) receives. You won't incur any costs if your ad is displayed for a search query and users don't click it.

Quality Score: Quality Score is the basis for measuring the quality of your keyword and ad and determining your minimum bid. Quality Score is determined by your keyword's clickthrough rate (CTR), relevance of your ad text, historical keyword performance, and other relevancy factors. The higher your Quality Score, the lower your minimum bid and price you'll pay per click.

Minimum bid: The amount assigned to a given keyword in your account based on its quality (or Quality Score). The minimum bid is usually the least amount you can pay per click in order for your keyword to show ads.

Clickthrough Rate (CTR): Your clickthrough rate (CTR) is a metric that helps show how your ads are performing. The more relevant your ads are, the more often users will click on them, resulting in a higher CTR. The system calculates your CTR as follows: Number of ad clicks/number of impressions x 100.