Google AdWords – How does it work and How to use it?


In the space of Digital Marketing, Display ads and Search ads, Google AdWords holds a high importance. It is very effective if you do it Correctly. The key to how Google AdWords works is the Quality Score. Quality Score is generally how well an ad group, keywords, ad and landing page relate to what a person is searching for, and how likely someone is to click on the ad. Here is Google’s page for “Check and understand Quality Score.” Now let’s get into some basics and learn how Google AdWords works.

What is Google AdWords?

Google AdWords is an online advertising service where advertisers pay to display brief advertising copy to web users. It is Google’s own advertising service through which you can place search results for your website on a search engine results page (SERP) by paying for them. Earlier, New sites needed to wait a lot to increase their ranking organically. Now with AdWords, you can see immediate results in your ranking and conversion goals.

Paid Searches

Broadly speaking, paid search marketing is, as the name suggests, when you pay to get search results. Those search results which have been displayed under caption “Ad” for some specific search query. For these type of searches, a user needs to pay Google some amount of bucks based on PPC, CPC, etc. campaign running under Google Adwords. These paid results are always displayed above the organic results.

How does Google AdWords work?

Suppose you are an entrepreneur or have a business, you will have some specific, highly relevant keywords to your particular business. These keywords or phrase are those queries which a searcher puts in a search engine to find you. There are a lot of other business/companies with the similar keywords competing for the search result. Now, what basically happens is that you bid for those keywords in Google AdWords. The whole process goes through an auction within a fraction of seconds and winner’s ads are shown on top of the results.

Understanding auction process

Now every time someone does a search on Google, an AdWords auction is created. Every advertiser who has a keyword match to the search query competes in the auction. How well each advertiser competes is based on their Ad Rank. Again, using a slightly simplified version:

Ad Rank = Quality Score * Bid

Ads are placed in order based on Ad Rank. The highest Ad Rank gets the top spot and so on down to either the last ad qualifying for the auction or the last position on the page.

Bidding price is the highest amount an advertiser is willing to pay. But, in reality, What an advertiser actually pays is the lowest amount necessary to beat the Ad Rank of the competitor below them. You can learn more on best bidding Strategy and practices in our upcoming blogs.

Do you pay exactly what you bid?

No, Bidding price is the highest amount an advertiser is willing to pay. But, in reality, What an advertiser actually pays is the lowest amount necessary to beat the Ad Rank of the competitor below them. For a winner, it is always less than what he bids for. In a nutshell, if you have the best Quality Score, you control the auction unless others outbid you. You can learn more about how final bidding price is calculated and how much a bidder actually pay.

How to use Google AdWords effectively?

  • Know the Basics
  • Define goals for sales, traffic, subscriptions and accordingly deploy your budget.
  • Negative keywords are must avoid, focus on marketing keywords.
  • You need to focus on all levels of your campaign creation:
    • Targeted audience
    • Location
    • Campaign keywords
    • Ad Groups
    • Ad copy
    • Budget adjustments
    • Landing Pages

How much a bidder actually pay in Google AdWords?


In our previous blogs, we have learned what is Google AdWords, how does it work and what is a bidding process. Now let’s understand how much AdWords charges a bidder.

We already know that how well each advertiser competes is based on their Ad Rank. Ads are then listed in descending order based on the result of the equation.

Ad Rank = Quality Score * Bid

Now, understanding how Ad Rank is influenced, will make more sense when we learn basics.

What is Quality Score?

Quality Score is a variable used by Google, that can influence both the rank and cost per click (CPC) of ads. To determine the order in which ads are listed, each ad has the following formula run against it: bid * Quality Score.

Why Quality Score?

The purpose of introducing Quality Score is to improve the experience of users who click on paid advertising links. It is reasonable to assume that users who have a great experience when clicking on ads will click on them more frequently, thus increasing advertising revenues for the search engine.

Factors affecting Quality Score

  • Your click-through rate (CTR).
  • The relevance of each keyword to its ad group.
  • Landing page quality and relevance.
  • The relevance of your ad text.
  • Your historical AdWords account performance.

The exact weight of Quality Score versus bid has not been revealed by any of the major search engines, and each company has stated that they reserve the right to continually adjust their ranking methodologies.

Understand how much winners pay?

In a way, understanding this process is the key to really unlocking AdWords.

Let’s understand it with practical examples:

Suppose, Company A has a website named and has a QS = 8. Now, A, participated in a bid for a phrase say, “get iron man caricature”.

Let’s say company A want to show up in the 1st position on the page no matter what. We can’t guarantee this, but we can certainly be pretty certain by over bidding the keyword to say $100/click with:

Ad Rank of A = 800 = (QS 8 * $100 Bid)

To beat A, a competitor (Company B) would have to get an ad rank > 800. This means even if they had a QS10 keyword, they would have to bid $80.01/click to get the top spot. Assuming they have a more realistic bid (generally $100 bid is high enough) of $10/click

Ad Rank of B = 100 = (QS 10 * $10 Bid)

And the amount A would pay in the auction is calculated as follows:

(100 Ad Rank to beat / our QS 8 + $0.01) = 100 / 8 + $0.01 = $12.51

So even though A bid $100, A only pay $12.51.

If Quality Score of A on that keyword in that auction was 10, then the amount A would pay is:

(100 Ad Rank to beat / our QS 10 + $0.01) = 100 / 10 + $0.01 =$10.00

Here’s where it really gets interesting; the person in the top spot could actually pay LESS than the people in the spots below them.

Unexpected, right? Here’s why that happens.

Assume the same crazy $100 bid for the top spot, but now let’s say the next competitor (Company C) only has a Quality Score 5 keyword on a $10 bid, the position 3 (Company D) has a QS 7 keyword on a $7 bid and the position 4 (Company E) has a QS 5 keyword on a $9 bid.

Position 1:

Ad Rank to beat C = 50 = (QS 5 * $10 Bid)

Position 1 pays= (50 Ad Rank to beat / (QS of A) 8 + $0.01) = 50 / 8 + $0.01 = $6.26

Position 2:

Ad Rank to beat D = 49 = (QS 7 * $7 Bid)

Position 2 pays= (49 Ad Rank to beat / (QS of C) 5 + $0.01) = 49 / 5 + $0.01 = $9.81

Position 3:

Ad Rank to beat E = 45 = (QS 5 * $9 Bid)

Position 3 pays= (45 Ad Rank to beat / (QS of D) 7 + $0.01) = 45 / 7 + $0.01 = $6.44

In this example, our QS 8 keyword in position 1 actually pays less than positions 2 and position 3. This same calculation holds true no matter what position you show up in, so the person in position 3 could pay less than position 4 and so on.

If you have a Quality Score 10 keyword, you control the auction.

With a Quality Score 10 keyword, you know that not only are you paying the least amount possible for the position you are getting, you are forcing EVERYONE above you to pay the MOST!

How to Use Google AdWords Effectively?


We already know how Google AdWords works and how much the bidder actually pay. These are the fundamentals and key for a successful AdWords campaign. If you don’t know you may refer to our blog Google Adwords – How does it work. How to use it? and How much the bidder actually pay?

Know Your Customers

To quote Douglas Adams “a common mistake people make when trying to design something completely foolproof is to underestimate the ingenuity of complete fools.”

You may think that you have an idea of your customer’s search habits, you may be surprised by the variety and complexity of the behavior of a typical internet user. A broad customer profiling is very important to determine the type of keywords he or she may be searching.

  • Know who they are.
  • Know what they are searching for.


Know what is in your store! Sort your keyword according to relevance and their search volume. Selecting the final keywords depends on your budget and goals. For example: If you have a large budget and lofty goals, you may use an ad group with high volume keywords (although they can be expensive).

If your budget is tight, you may refrain from general keywords. There is another problem with the high crowded group is that, if your CTR is low (which mostly is the case with new websites) your Quality Score decreases and so is your ranking.

Negative Keywords list

Know what is not in your store! Update and extend your negative keyword lists at least once a week. After few weeks you’ll have good data about searches that lead to your site. Download actual search data, and in excel search for keywords/phrases, you don’t want to appear, highlight them. Filter them and add them to the relevant negative keyword list. You can use exact match negative keywords if it’s needed.

Irresistible offer

Know what your competitors are offering! There is nothing better than providing relevant offers to customers for campaign effectiveness. This has dual benefit as it gets you higher CTR and also, google gets pleased as well. This is where the magic happens.

Call To Action

Know what do you want your customers to do! If you don’t have a pre-designed proper call to action, the searcher will be confused after the click and eventually will leave. This will harm your conversion rate and Quality Score. Remember, always send the traffic to the most relevant page.

ROI based Optimization

Know what do you want out of your ad campaign! Do ROI based optimization for effective results.Always make bidding strategy and campaigns keeping your return goals in mind. You can add column cost/value, determine what is the minimum ROI you want to reach e.g. 10, and increase bids for those keywords which have better cost/value than 10 and lower where metric doesn’t reach 10.

Conversion Tracking

Know what is going on your website! It is very important to track activities of your users on your website. Where are they coming from? What are they searching for? Put tracking mechanism in your website before running a campaign. Make a proper plan for CTA (call to action) where you want to send your customers, subscriptions or downloads.

Work Smarter

The end result of your ad campaigns is to increase your ROI. You should already be prepared with some homework and budgeting. Here are few things you should focus to get most out of your money.

  • Know your budget! Monitor your budget allocation and determine how much you spent on certain devices. Focus on the device which gives you more conversion. For example: if you have a high conversion on mobile and low on the desktop, lower your bid on the desktop and focus more on mobile.
  • Know when it is enough! If you find out some low-performing keywords that have low CTR and are costly at the same time, remove and refrain investing on them.
  • Don’t get paranoid over updating your campaign. Update your “negative keyword” list so that you get a relevant audience to your business and improved quality score. But, remember too many changes may diminish your campaign effectiveness. So optimize your campaign in moderation.

What should be your Bidding Strategy for lead generation?


For a business, it is very important to generate leads and nurture them in an orderly fashion. There are multiple ways to nurture a lead. But to do that you first need to acquire the lead. So how do you generate more leads for your database? To get more leads, search engine marketing is the best way to bring the visitor on the site and ask them to fill in the form so that their contact details enters your database.

Each campaign you run on Google AdWords for search engine marketing, your marketing team will be required to create multiple campaigns and multiple ad sets where you might have 1000+ keywords. Now the big question is how do you make sure that your bidding strategy for each keyword works.

So now you must be wondering which bidding strategy to be used while running campaigns? Well, we all have been there. Depending on which networks your campaign is targeting, and whether you want to focus on getting clicks, impressions, or conversions, you can determine which strategy is best for you.

Each bid strategy is suited for different kinds of campaigns and advertising goals. For the purposes of bidding, you’ll need to consider three basic types of goals.

If you are looking for more traffic on your site, cost per click might be the best strategy.

If you want to increase brand awareness—not drive traffic to your site—focusing on impressions may be your strategy.

If you want customers to take a direct action on your site, and you’re using conversion tracking, then it may be best to focus on conversions. Cost-per-acquisition (CPA) will work nicely for your campaigns.

Well now on each campaign you may have multiple ad sets and each ad set will multiple keywords in it. How do you manage all without losing the users? Well, Google AdWords dynamic auction let you do that.

How does it work?

Dynamic or real-time bidding takes many factors into consideration when adjusting bids. Not only that, those bidding decisions are made uniquely for each auction that you enter from Google. It’s highly specific bids, made efficiently and at scale.

Keyword-wise bidding is one of the most used ways to optimize your bid, but even with that, you can’t set precise bids for the many different queries that can match to a single keyword. To get those users on your site. This especially helps advertisers to get those users where partial of their search queries matches with your keywords.

Beyond that, keyword-wise bidding for your exact match keywords can’t account for the wide array of user contexts connected with a search. Only auction-time bidding has the level of precision required to set a bid matched to a user’s actual search query and context.

How does Google’s automated bid adjustment work?

Automated bids adjust your bid at the moment of the auction for each impression based on all the factors in play. So instead of a few basic adjustments, google gives more power to advertisers by giving more control on their campaigns.

All things can be factored in at the moment of an impression so you get a bid that makes sense for you and your business goals. With Google’s automatic bidding, every time you enter the action this process runs.

So it is always better to use the automatic bidding tactics when you are running search engine marketing campaigns for lead generation or any objective you have.

Does live chat generate leads in B2B?


Can you communicate with the buyers and the vendors in real time using live chat?

So, the answer is, YES!

According to a study conducted by Kissmetrics, 44% of the online users say assert that having their queries answered by a live person during the online purchase is one of the most necessary features a website can offer. Moreover, 63% of them said that they would most likely to return to a website of that kind.

For your business, live chat can give you more leads, more conversions, and customer support. How?

We would be covering that one by one.

Want to attract your buyers?

Buyers in today’s day learn things through the web and go to your website for the desired content.

If you don’t reach out to them in a proper way, they are never going to come back. Maybe some will come later after they have searched the competition but till then you have lost the option to step early into the buying cycle.

You may also lose the opportunity of influencing their judgment process and you may have missed the boat.

Things to keep in mind while adding the live chat

You can’t add live chat as such to your website. The more you make it adaptable to your customers and your requirements. the more benefit you will derive from it.

Broadly, there is three factor that you should customize to make the live chat as efficient as possible.

  • Behavior of your potential customer

    Just by pushing a live chat session to everyone who comes to your website may cause more harm than good. By using complicated rules of engagement, the live chats will grade your potential customers, and they will invite only those to chat who are showing the desired digital body language.

    For example, if they are staying on the page for a definite time period or going to a certain page. For better results, you can also tune your engine by studying the finished chats and feeding the inferences back to the rules.

    Although the subtleness of the digital things is necessary, but you also have to think about the volume. The traffic is never constant on the website and that’s why you have to adjust the chat capacity at a moment’s notice.

    If it goes wrong then you will either miss out on the opportunities or you will waste on the opportunities that could have been easier to achieve.

  • Adjust according to the geography

    Set up the live chat function to suit your customer location. Speak their language and adjust according to their time zones, so that you can have the desired type of service ready.

  • Try to see the bigger picture

    If you want to boost the conversion rates then you can add live chat to your website. It can help you provide the insight into the current trend in the market by analyzing:

    • Chat transcripts
    • Exit surveys
    • Agent exit questionnaire.

The live chat dilemma

Some of the marketers believe that they are facing a dilemma.

They want to automate inbound inquiries for the fear of including sales too early and wasting their resources on poor quality leads. But they have a risk of getting too late to the party.

By providing live chats to the proper prospects we can have an upper hand over others.

Hence, for lead generation in B2B live chat can be used to reach out to anyone who resembles your preference, who is engaged with the content of the company or with whom you are connected. You can participate in an indefinite number of chats as long as both the parties are mutually interested.

Can Web Personalization act as a revenue generator?


John wants to increase the customer base via his website, but he is worried that it might cost him huge money. He wants to increase the revenue without spending much. What should he do to attract more customers and make them feel that the website is tailor made just for them? Web personalisation is all about it.

How is it good for john? The more customers use the web personalized website, the more data his company will get. Also, increased emotional responses towards the web page shoot up the sales.

Usually, companies think that machine learning comes with huge money. Ironically, it’s much more efficient and charges quite low.

How Content personalisation works?

Content personalisation increases the user’s attention by making them feel that its customized just for them. The consumers get the idea that they are more than just a line on an excel sheet and that they are treated as separate entities.

Also, it shows that the company cares about their customers.

The most important factor for the owners is to provide a personalized experience to the customers which will lead to increased revenue.

Due to growing investment in digital marketing and predictive analytics, the majority of institutions conclude that they are personalizing content in web pages, social media, emails and e-commerce channels.

Many of them are working to enable personalization in media, marketing, and sales touch points. It ranges from mobile gadgets to partner web pages to sales enablement.

It’s all about web personalisation!

Web personalization drives revenues. It can be seen that the marketer that deliver personalized web experience are having double-digit returns than others in response and sales.

Due to the boom in personalized content websites, getting the right information at the right time to the right person has never been better. Content requirements are exploding as we are moving to a world of 24/7 engagement.

The basic challenge that is faced during the delivery of personalized web content is to place a content operating model to scale the volume and the cost of content for increasing the sales and revenue.

This is because the social media, digital marketing, and sales enablement program need more personalized content elements and campaigns related to content marketing.

Why is it so important?

If there is a lack of effective content and resources in then the revenue can fall down. And the issue may get only worse. It can:

  • drain the time and attention of senior management.
  • slow down the process of getting the relevant messages to the market.
  • limit the effect of investments in targeting, digital transformation and Customer relationship management technology.

At the end of the day, there is a need for well organized, good quality content that is required to support web personalization.

Hence, the companies can’t skip this problem. They have to change.

They need to find a sustainable and economical way to produce and manage personalized and appropriate content at the scale required for the growth in sales.

What can we do to make it more personal?

There are many things that the companies can do for real-time personalisation.

  • They can appoint an executive in charge of the content supply chain and operating model.
  • The content targeting can be streamlined by using a tagging taxonomies.
  • For proper content utilization, the customer’s profile database can be used to make the execution of Advanced web personalization strategies easier.
  • Nowadays, Modular content is also developed to meet the web personalization needs of digital marketing assets upstream-solving the problem at its source.
  • The content is planned and structured to be modular in order to easily assemble them into the content presentation templates.

The future of real-time personalisation

The scope of real-time personalisation is truly endless.

Unless the competitors who stick to the outdated technologies, the companies that have the right resources will gain a competitive advantage over the others.

Since they can greet the new opportunities with speed and agility and meet customer demands properly. So, it’s better late than never.