How Google Ads Works

Google Ad Grant

Like millions of other people on the internet, we’re constantly searching for answers to questions on Google — an average 63,000 searches per second. Often the first thing we see above the organic content that Google deems to be the most accessible and relevant to our search queries is a selection of URLs that are labeled as ads.  
Welcome to the world of search engine marketing (SEM). More specifically, welcome to the world of Google Search Ads: Organizations pay for their content to index in certain searches on Google. In exchange for premium placement, Google’s business model keeps rolling along. But how exactly do Google Ads work? Keep reading for our explainer, focusing on the process for Google Search Ads.

How Google Search Ads Appear

When you run search ads with Google, you’re entering an auction: Advertisers bid a certain amount of money on search terms, also known as keywords, that are relevant to their content.
They choose their bids based on how much they are willing to pay Google for a user to click on their ad. This bid, combined with a Quality Score (also known as a Q Score), determines which Google Ads appear on the search engine results page (SERP). Google assigns the Q Score based on the quality of your site (speed, security, etc), and the relevancy of your ad and content to the keywords you’re bidding on.

How Google Chooses What Ads to Show

Winning this type of an auction means that you have your Google Ad appear at the top of relevant SERPs To achieve this, you will need to optimize your Q Score and bid amount. These are currently the factors that, according to Google, contribute to Q Score (but it’s likely that there are many others in consideration):

  • The relevance of your Google ad to the search query
  • The relevance of the keyword you bid on to your ad group
  • The relevance of your ad to the landing page you are sending to
  • The click-through rate (CTR) of the ad and ad group over time
  • Overall historical account performance

Why does any of this matter? Primarily, following the above best practices will help land your ad in the top position, which will be seen by the most users and ideally generate a higher click-through rate (CTR). The added bonus is that Google rewards advertisers with high Q Scores by lowering their cost per click (CPC), which means you’ll have a higher ROI for your campaign.

How Much Do Google Ads Cost?

How much are you actually paying for ads? If you’re a qualifying nonprofit, it can be $0 with the Google Ad Grant.
For Ad Grant accounts, there is a bid cap of $2 per click, unless you’re using the maximize conversion bid strategy. If you are using maximize conversion bidding or if your organization is paying for the ads, then you can bid as much as you’d like — Google will offer suggestions to beat your competitors in the auction.
The actual cost of an ad is calculated by dividing the ranking position of your ad by your Q Score and multiplying it by 0.01. If you set a budget with Google Ads, they may spend less than the budget, or as much as 20% more than the budget. So if your budget is tight, you will want to keep an eye on all of your campaigns. For Ad Grant accounts, spend will not exceed $10,000 per month (or $40,000 if you were one of the lucky organizations to take advantage of GrantsPro when it was in effect).

How to Run Google Ads

Now that you know how Google Ads work, you can jump in! Get started with our guide on how to set up Google Ads campaigns.