TLDR: Google Ads is one of the most powerful online advertising platforms, giving businesses immediate visibility on Google search, YouTube, Gmail, Maps, and millions of partner websites. It works through keyword targeting, a live auction system, and ad relevance scoring, making it possible for even smaller businesses to compete with big brands.
Table of Contents
What are Google ads?
At its core, Google Ads is a Google’s online advertising platform. Businesses use it to create ads that show up across Google’s ecosystem, from search results and YouTube videos to Gmail promotions and millions of partner websites.
The key difference compared to SEO (organic search) is speed. With SEO, you’re building authority over time so your website ranks “naturally.” With Google Ads, you can appear at the very top of search results instantly, as long as you’re willing to bid on relevant keywords.
Think of it like this:
- Organic search = long game, credibility-driven, free clicks but slower to scale.
- Paid ads (Google Ads) = instant visibility, pay-per-click, flexible targeting, and measurable ROI.
Together, they’re even stronger. SEO builds trust long-term, while Google Ads brings in immediate traffic and sales.
How do Google ads work?
Google Ads runs on a pay-per-click (PPC) model. That means you only pay when someone actually clicks on your ad, not just when they see it.
Here’s the process broken down:
Keywords & intent
Advertisers pick keywords they want to trigger their ads. For example, a sports retailer might bid on “running shoes.” When someone searches that phrase, the ad enters an auction.
The magic is in the intent, Google Ads lets you reach people exactly when they’re actively searching for your product or service via your keyword targeting.
The bidding system (simple explanation)
When multiple advertisers want the same keyword, Google runs a live auction in milliseconds. Everyone sets a maximum bid (the most they’re willing to pay per click). But you often pay less than your max bid request.
Ad rank formula
Who actually wins the top spot isn’t just about money. Google calculates Ad Rank based on:
- Maximum bid (how much you’re willing to pay)
- Quality score (ad relevance, landing page experience, expected click-through rate)
- Context (location, device, time of search, audience signals)
- Competitiveness of the auction (how many others are bidding)
- Ad assets (extra features like site links, call buttons, or images)
Auction example
Let’s say three retailers bid on “running shoes”:
- Retailer A: Highest bid, weak landing page
- Retailer B: Lower bid, but highly relevant ad + excellent landing page
- Retailer C: Lowest bid, poor quality score
Even though Retailer A offered the most money, Retailer B wins the top spot because relevance and user experience matter just as much as budget do.
Types of Google ads
Google Ads hasn’t just got one format, it’s a whole suite of campaign types. Here’s a breakdown:
Search ads
- Text-based ads that show at the top of Google search results.
- Best for high-intent searches like “buy iPhone 14.”
Display ads
- Visual banners that appear across millions of Google partner websites.
- Great for retargeting past visitors.
Video ads
- Run on YouTube and partner sites.
- Formats include skippable ads, non-skippable, bumper ads, and storytelling sequences.
Shopping ads
- Product listings with images, prices, and reviews shown in search results.
- Essential for eCommerce.
App ads
- Designed to drive app installs or in-app engagement.
- Run across Search, Display, Play Store, and YouTube.
Smart ads
- Simplified, automated campaigns, these are ideal for small businesses or beginners.
Local services ads
- Appear at the very top of Google when people search for services like plumbers or locksmiths ‘near me’.
- Pay-per-lead rather than per click.
Discovery ads
- Visually engaging ads that appear on YouTube, Gmail, and Google Discover.
Performance Max (PMax) ads
- Google’s AI-driven all-in-one campaign.
- Runs across Search, Display, YouTube, Maps, and more.
How to set up a Google ads campaign
- Create a Google Ads account at ads.google.com.
- Define your campaign goal (sales, leads, awareness).
- Choose your campaign type (Search, Display, Shopping, Performance Max, etc.).
- Do keyword research (use Google Keyword Planner).
- Prepare ad assets (text, images, video).
- Build landing pages optimised for conversions.
- Set your budget & bidding strategy (maximise conversions, manual CPC, target ROAS).
- Launch and track performance (link to Google Analytics 4 for deeper insights).
The cost of Google ads
When it comes to cost, the good news is that Google Ads is incredibly flexible. You’re always in control of your daily budget, which means you can start small and increase your spend as you see results. Google Ads works on what’s called a pay-per-click (PPC) model. In other words, you only pay when someone actually clicks on your ad, not just when it’s shown. The amount you pay per click can vary depending on a few key factors.
Competition plays a big role. If lots of businesses are bidding on the same high-demand keyword, the price per click goes up. Your industry also matters, fields like finance, law, and healthcare are notoriously competitive and tend to have higher CPCs. On the flip side, your Quality Score (which reflects how relevant and useful your ads and landing pages are) can help bring costs down. In fact, Google often rewards advertisers who create better experiences with cheaper clicks.
Another reassuring point is budget flexibility. You can start with as little as £10 a day, and Google will never exceed the maximum daily cap you’ve set. Plus, you can adjust that budget at any time as your campaigns grow and perform. Essentially, you’re paying for performance and only investing when people actually engage with your ads.
The benefits of Google ads
One of the biggest advantages of Google Ads is how quickly it can put your business in front of potential customers. Unlike SEO, which can take months to build momentum, Google Ads gives you immediate visibility right at the top of search results.
Another huge benefit is measurability. Every click, impression, and conversion can be tracked, so you always know what’s working and where your budget is going. It’s also incredibly precise, you can target ads based on keywords, demographics, location, and even user behaviour, ensuring you’re reaching the right people at the right time.
On top of that, the platform is flexible when it comes to budgeting. Whether you’re a small business with a modest spend or a global brand with a larger budget, you can set daily limits and scale as you grow. And that’s perhaps the most powerful part: scalability. Start small, optimise your campaigns, and as you see results, you can confidently increase your investment to drive even bigger growth.
Tips and best practices for beginners
If you’re new to Google Ads, the best approach is to start small and treat your first campaigns as a learning experience. Begin with a manageable budget so you can test what works before scaling up. A strong foundation starts with good keyword research. Use tools like Google’s Keyword Planner to identify terms with the right mix of search volume and intent, and don’t forget about negative keywords, which help you avoid paying for irrelevant clicks. It’s also important to match your campaign type to your goal: search campaigns work well for capturing high-intent leads, shopping campaigns are ideal for e-commerce, while display, video, and PMax can help you build awareness and cover more of the customer journey.
It’s equally crucial where you send your traffic. Make sure your landing pages are fast, mobile-friendly, and directly relevant to the ad. This not only improves the user experience but also boosts your conversion rate. Set up proper tracking so you can measure results accurately. Connect Google Ads with Google Analytics 4 and make sure conversion tracking is enabled.
Don’t overlook the creative side, either. Strong headlines, compelling ad copy, and clear calls to action make a huge difference, and testing variations will show you what resonates best with your audience. Take advantage of ad assets like site links, phone numbers, and location info to make your ads more engaging and clickable.
Finally, remember that optimisation is an ongoing process. Regularly review your search term reports, refine your keywords, adjust your bids, and test new ad formats. Google Ads rewards consistency and attention to detail, so keep tweaking and learning as you go.
Conclusion and key takeaways
Google Ads is one of the most powerful tools for driving business growth online. It works on a simple principle: show the right message, to the right person, at the right time. Whether you’re a small local shop or a global brand, Google Ads levels the playing field by combining keyword intent, relevance, and smart bidding.
Start small, test and learn, and scale what works. Done right, Google Ads can become your business’s best tool. Got questions about running a Google ad campaign? Please get in contact with our team, at Modo25, or you can email our team at team@modo25.com.
