Getting started with Google Ads, Google’s advertising service once known as AdWords: What it is, how much it costs

The top hits on a Google search are Google Ads, but that’s just one place these ads pop up.

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Google Ads was initially launched as Google AdWords, then renamed and revamped in recent years.Google has offered paid advertising on its search engine and other platforms since the year 2000.Google Ads uses a “pay per click” model where you pay a fee to Google when users click on your ads.

Google Ads is Google’s advertising platform that businesses, brands, influencers, nonprofits, and anyone else willing to shell out some cash can use to place advertisements on various corners of the world wide web. 

Google Ads can pop up at the top of search results or in social media feeds, be displayed on websites embedded among webpage content, or run before or during YouTube videos.

The type of ad that internet users see, the frequency with which the ad is served, and the quality of the placement of a given Google Ad all depend on the advertiser’s spend and the online behavior of the people who end up seeing it. This confluence helps make Google Ads a good investment for the advertiser and — often, anyway — a relevant experience for the people who see and may click on the ads. 

Launched as Google AdWords in 2000, the platform’s name switched to Google Ads in 2018 and it’s diversified in many ways in recent years.

Google Ads: The price and the potential

Using Google Ads can be expensive — you pay per click, but you can set a maximum budget for your ad.

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“Why is Google Ads so expensive?” is one of the most common questions associated with Google Ads. The simple answer is because it’s effective and popular.

With so many different businesses, brands, and individuals vying for visibility on Google, the higher-ranking search terms get more and more expensive.

The average cost per click is around $3. In some cases, for search terms with very little competition, you may pay mere pennies for each ad click. Other ads may cost their creators $50 or more for every single click.

That’s a lot of money for someone clicking on an image, video, or text ad that will lead them to your site, feed, or product — but it’s no guarantee they’ll take further action that will be profitable to you. 

But remember, you don’t pay anything until that click happens. you’ll never be hit with a surprise expense that’s beyond your budget because you set a maximum spend for each ad. Plus, you know that every time you do pay for your Google ad, it’s because someone took the exact action you hoped for.

So, to address another common question, “Is Google Ads free?” the answer is a resounding no. Unlike Google Business Profile, the free service to let business owners control how their business appears in Google search results, Google Ads will cost you.

Is Google Ads worth it, given the potentially high cost per click? If used well, absolutely yes.

Different types of Google Ads serve different purposes

There are five primary types of Google Ads: Search ads, which appear above and among the organic search results; video ads, which run before or during YouTube videos; Google Display Ads, which are embedded among the content of websites; Google Shopping Ads, which pop up with images, brief text, and pricing info when someone searches for a specific product or product category; and Google app ads, which are app-related and show up in the Google Play store, among search results, and on YouTube and other sites.

Google also offers more specialized ad campaigns, such as Performance Max, which comes with AI optimization to help your ads perform as well as possible. In February 2024, the company announced that the Google Gemini AI model will be incorporated into Performance Max to help advertisers build more effective campaigns.

The incorporation of AI into Google Ads has sparked concerns within Google and the advertising industry that automation will replace workers. Late in 2023, numerous media outlets reported that Google Ads would undergo a restructuring, to include layoffs.

Google’s layoffs also affected Waze, the company’s traffic and navigation app, in 2023 when its advertising system merged with Google Ads technology.

How to make money with Google ads

You can make money with Google Ads, but the service is most effective when business owners are thoughtful and deliberate about their ads.

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All Google ads offer advertisers the ability to tailor the ad to users. Said action can be a purchase, a subscription, a share, and more. 

The targeting comes in the form of selecting user traits like age, location, and interest.

Of course, the ad type you choose should be well-reasoned: if you’re selling gardening tools, a search or shopping ad probably makes the most sense. But if you’re trying to spread awareness of a new VR video game, then an ad on YouTube is a savvy idea.

The care with which you choose terms in a Google ad will help the advertisement perform well, although it’s more expensive when you place high-ranking terms in your ad. That’s because Google’s algorithms deem advertisements with well-chosen and well-used keywords — words that read organically rather than stuffed in — as more relevant and will serve such ads more often and more prominently.

So, choose your words carefully, pick your ad type thoughtfully, set your budget realistically, and then prepare to edit and adapt your advertising strategy as the clicks roll in or don’t. Google Ads is worth the money, but only if you also put in the effort.