5 Concepts to Understand Before Starting AdWords

Before you start spending money on AdWords, you should understand the fundamentals of how it works. In this article I will lay out a few concepts and strategies that you should understand before you start your first campaign.

1. How does AdWords work?

AdWords is an auction-based platform. But don’t be fooled; here, auction doesn’t just mean that whoever has the highest bid gets to show their ad at the top of the page. In AdWords, the auction winner is actually the person who has the highest “Ad Rank” for that particular search.

Ad Rank is what Google uses to determine the position of your ad on the Google Search page. Ad Rank is based on three factors: your Max. CPC, your Quality Score, and any ad extensions you are using:

Ad Rank = Max CPC x QS x Expected impact of Ad extensions and Ad Formats

Out of these factors, the Max CPC (bid amount) is totally in your control. The more competitive your bid, the better your chances of achieving a higher ad rank and thus a higher ad position.

Because AdWords is not completely based on who is bidding higher, it is important to work on those other Ad Rank factors i.e. QS and Ad Extensions, alongside having competitive bids.

Here is an example to understand how only having higher bids doesn’t guarantee you higher position:

Advertiser Max. Bid QS Ad Rank
A $5 6 30
B $4.5 7 31.5
C $4.5 8 36


In the above example, you can see the Ad Rank is higher for Advertisers C and B, even though A’s bid is higher. So C will have the highest position, let’s say ad position #1, B will have #2, and A will have #3.

Quality Score is one of the most talked about topics in the AdWords Community. Achieving, maintaining, and improving a high QS is not an easy task. Maintaining relevancy between a user’s search term, your keywords, ads, and landing page helps improve quality score, as does clickthrough rate (CTR). Here are a couple detailed articles on Quality Score which I highly recommend to gain a deeper understanding:

Setting the Quality Score




Using Ad Extensions can also increase your Ad Rank. Adding sitelinks, callout extensions, call extensions location extensions, review extensions, and structured snippets can all help boost your ad rank and clickthrough rate. Most importantly, these features give your potential customers more information about your business before they click.

2. Goal Setup & Conversion Tracking

Starting an AdWords campaign with no set goal in mind is a terrible mistake. You should first decide why you are spending money on AdWords. What is your main goal behind running this advertising? When customers see your ad, click on it, and perform a desired action on your website, that is called a conversion. Conversions can be leads, phone calls, form submissions, subscribing to your email list, downloading your brochure, online purchases, etc.

You should set up conversion tracking before you start your first campaign. Otherwise, having a goal but not tracking it is like shooting in the dark!

The set-up process depends on which goal you want to track, so refer to this guide to understand the correct process for your specific needs.

3. Choose the Right Campaign Type

When you start an AdWords account, the default campaign type is set to “Search with Display Select.” But before using the default, think about the goal you defined above, and which campaign type you need to achieve that. If you don’t select a campaign type according to your goal, you won’t see the results you want. Some of the available campaign types include:

Search with Display select: This campaign type will show ads on Google search, and also on websites and apps that are relevant to the keywords you are targeting in your campaign.

Search Network Only: This campaign type only shows ads on Google search and search partners. Ads  can appear for customers who are directly searching for your product or service on Google. If you do not want to show ads on search partner sites, you can uncheck search partners under your campaign’s Settings tab.

Display Network Only: This campaign type lets you show ads on third-party websites and apps. This is great for branding, retargeting, and increasing awareness of your business.

Video: This campaign type lets you show TrueView ads on YouTube search, YouTube videos, and the Google Display Network.

Shopping: This campaign type allow you to advertise products by providing full, detailed information to potential customers before they click your ad. Shopping ads show the product image, price, website name, and any promotion you are running, making them ideal for ecommerce businesses.

Universal App: This campaign type helps you promote your Android App across networks.

You can find more details about these campaign types on the Help Center.



4. Keyword Match Types

I often see new advertisers using Broad Match keywords not using negative keywords at all, often because they don’t know other options exist. This usually results in them paying for clicks that are not related to their businesses. There are five keyword match types:

1. Broad Match: This is the default match type and reaches the widest audience. Using Broad Match keywords makes your ad eligible to show for any query that includes a word/phrase or implied meaning related to your keyword.

2. Broad Match Modifier: Adding a “+” sign in front of a term makes it a Broad Match Modified keyword, such as +add +keyword. This tells AdWords that the term directly after the plus sign must be present in the user’s search query. You can add a plus sign to more than one term in your keyword to require that each term is present in the search query.

3. Phrase Match: Adding double quotes around the entire keyword makes it phrase match, such as “add keyword.” Phrase Match keywords mean your ad is eligible to show for any query that includes that exact phrase, while allowing additional phrases or words to appear before and after.

4. Exact Match: Adding square brackets around the entire keyword makes it exact match, such as [add keyword]. Exact match makes your ad eligible to show for any query that is exactly the same as your keyword, with no additional words or phrases before or after.

NOTE: Phrase and Exact Match types also allow your ad to show for close variants or your keywords, such as misspellings, singular or plural versions, accents, acronyms, stemming, and abbreviations.

5. Negative Match:

Negative keywords prevent ads from showing for those particular queries, and these can be just as important as regular keywords.

Check out these specific examples of keyword match types for more details.

5. Landing Page Experience

AdWords can only bring relevant customers to your landing page. But whether or not the person who lands on your page will make a conversion is up to you! A clear, easy-to-navigate landing page is key to being successful on AdWords. Your landing page must not take a long time to load, be easy to navigate, and your content should be correct, relevant, and original.


Many new advertisers make the mistake of setting their website’s homepage as the ad’s Final URL. But it’s better to add the most relevant landing page to your ads. When your customer makes a search on Google, clicks on your ad, and lands on your landing page, it should be easy for them to find what they’re looking for (like your phone number of a sign-up button). Taking users to a homepage or other page which isn’t relevant will lead to a wasted click.


My name is Alamu Akinyemi peter a Digital Marketing Specialist currently the CEO of Climaxbox Digital Marketing Agency . I love improving business with my Marketing Skills and sharing my research update with people who care to know.