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How to Use Google

Ads for Your Business
A Comprehensive Kit from HubSpot and SEMrush
Table of Contents
Chapter 1: What is Paid Search? Chapter 4: Your Google Ads
Introduction Strategy
Paid vs. Organic Search Keyword Strategy
Account Structure
Chapter 2: How to Use Paid Search
Setting Your Budget
Landing Page Testing
Optimizing Ad Budget
Finding New Keywords
Paid Search Can’t Stand Alone Chapter 5: Measuring Your Success
Defining the Four Basic Metrics
Chapter 3: How Paid Search Works
Combining the Four Basic Metrics
Keywords, Ads, and Landing Pages
Pay-Per-Click (PPC) Bidding Chapter 6: Final Thought
Quality Score Conclusion
Keyword Match Types Bonus: New Innovations to Take
Advantage of This Year
Introduction

This guide is designed to provide you with a basic introduction to paid search and a
fundamental understanding of how to use paid search to drive more leads and customers
for your business. We’ll start off by explaining what paid search is and how it
differs from organic search. Then we’ll talk about the different ways you can use paid
search, followed by how paid search works, some campaign strategy discussion, and
finally, how to measure the effectiveness of your campaign with metrics.

Paid vs. Organic Search

Search Engine Marketing (SEM) is a term used to describe the various ways of marketing
a website via search engines, and entails both organic search engine optimization and
paid search strategies. Organic search is based on unpaid, natural rankings determined by
search engine algorithms, and can be optimized with various SEO practices. In contrast,
paid means you to pay a fee to have your website displayed on the search engine results
page (SERP) when someone types in specific keywords or phrases to the search engine.
The SERP will display the ads that you create to direct viewers to your site, and the fee you
pay is usually based on either clicks on or views of these ads.

Organic and paid listings both appear on the search engine, but they are displayed in
different locations on the page. On the next page, you’ll see a diagram of a search engine
results page that highlights the positioning of the paid links vs. the organic search results.
According to HubSpot data, most searchers – more than 70% of them – click on the
organic results, while only 30% are likely to click on the paid links.

So does that mean you shouldn’t bother with paid search? No, it doesn’t! Paid search is a
great option if you are not ranking well in the search engines with organic search alone. It
is an extremely powerful tool and a valuable asset for enhancing your company’s online
presence. So let’s dive in and find out how paid search can help your business.

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Yellow = Paid results
Green = Organic results
How to Use Paid Search

Now that you have a fundamental understanding of what paid search is, let’s talk about
how you should use it. Note the emphasis on how you should use it, not how can you use
it. The reason for this important distinction is that all too often, companies – small
businesses especially -- think that if they just pay to be on a search engine, they don’t have
to invest time and resources in search engine optimization to rank higher organically.

It’s important to make clear that paid search is not a replacement for anything, but should
instead be used to complement other inbound marketing strategies. Paid online
advertising takes a lot of time and effort, a lot of resources, and a lot of management, and
it’s something you really need to invest in.

Let’s take a look at some of the useful things you can do with paid search.

Landing Page Testing

One great way to use paid search is for testing and optimizing your landing pages. So, for
instance, here’s the search engine results page for ‘cat food for older cats’, and you see
some paid results for this specific search query:

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You can take one ad and actually set it to go to two different destination URLs to test two
different landing pages. So for a cat food ad, you could have one ad going to a page with
one offer (a guide on feeding techniques for your older cat), and the other to a page for
another offer (an actual product page for cat food). This is called A/B testing, a very import-
ant and highly recommended practice for optimizing your ads strategy.

Paid search is a great way to do landing page A/B testing because it allows you to direct
traffic to your choice of pages, split this traffic to different pages, and ultimately find the
pages that convert at the highest rate.

Finding New Keywords

In addition to landing page testing, you can use paid search to find new keywords for your
campaigns. Google Ads generates a Search Terms report that displays all of the keywords
for which your ad has been displayed. In other words, if you are bidding on the keyword
“red shoes”, Google may serve your ad when someone searches “red tennis shoes”
because that’s what the user searched. The report also contains information about each
keyword’s peformance, so you can determine if it’s worth adding it to your campaign.

Below is a sample Search Terms report. On the left hand side is the list of keywords. The
ones that show the green ‘Added’ box next to them are the ones that are already in this
paid search account.

The keywords that don’t say ‘Added’ next to them are not currently included in the
account. Again, this is a list of the keywords that people are actually typing into the
Google search, so it is extremely valuable information.

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Paid Search Can’t Stand Alone

When you think about how you should use paid search, one of the best ways to think
about it is to use it as a complement to your inbound marketing efforts. You can use paid
search to maximize your coverage on the search engine’s result page (SERP).

For instance, here we have the search term ‘free CRM software.’ You’ll see that there’s an
organic search listing for HubSpot that ranks on the first page, but we’re also buying the
keyword ‘free CRM software’ which displays our paid search ad for it. So now we have that
natural search ad, the paid one, and, if you scroll down the page, you’ll find yet another
organic search listing for our CRM software. This widespread coverage on the search
engine results page for “free CRM software” helps to establish HubSpot as a leading figure
for online sales & marketing and drives more traffic to our pages.

You can do this for your business as well. Establish your company as a leader in your
industry by increasing your presence on search engines with paid search campaigns.

Now that you have some ideas for how to make good use of them, let’s take a closer look
at how paid search campaigns work.

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How Paid Search Works

Keywords, Ads, and Landing Pages

There are three main elements of a paid search campaign: keywords, ads, and landing
pages. You start out by giving Google a list of keywords, which tells Google to display your
ads on the results page when people search for those keywords. You then design your ads
to be shown for these keywords, and your goal is to make them both relevant enough to
the search query and attractive enough to get the searchers to click on them. Then, when
viewers click on your ads, the ads direct them to your landing pages. The goal of your
landing pages is to get the visitor to convert in some way – by buying your product,
downloading an offer, etc. So paid search really comes down to managing, matching, and
optimizing these three things.

Pay-Per-Click (PPC) Bidding

PPC, or pay-per-click, means that you don’t pay for your ad to be displayed – you pay when
somebody actually clicks on your ad. With PPC, you pay for each actual click, and then the
responsibility is on you to make use of that opportunity to convert the visitor.

PPC is better than paying per impression (CPM) because your ad might be displayed
100,000 times and only one person clicks on it. There is the option to pay per thousand
impressions with Google, but the only case where this would be a better choice than PPC
would be for a “share of voice” campaign to try and spread awareness of your brand. For
the purposes of paid search, however, especially if you’re just starting out, PPC is the
better option, especially since CPM can only be used in display campaigns.

So what determines how much you pay per click? Google uses an auction-style bid to set
prices. For any given keyword, you have the top bidder – let’s say they bid $5 for someone
to click on their ad. Then you have the next highest bidder who values a click at $4.50,
another at $3.75, another at $3.00, and so on, all the way down to the last person who says
that they value a click on their ad for that keyword at, let’s say, $2.25.

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 $5.00

$4.00

$3.00

$2.80

Now, these are not the prices you actually pay for each click. Instead, the lowest of these
bids is used as the price for the least valuable (least visible) spot on the results page, and
then each spot going up in value (more visible placements) is priced at an incremental dol-
lar value higher (we’ll use a $.05 incremental bid for this example). So in this case, the top
bidder ends up paying only $2.50 per click, even though they bid at $5.00.

$2.50

$2.45

$2.40

$2.35

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Quality Score

While your bid plays a large role in determining whether or not your ad is served for a
given keyword, Google also uses something called “quality score” in making this decision.
Quality score is an algorithm that scores each of your ads for relevancy – it looks at how
closely your keyword relates to your ad and how closely your ad relates to your page
content to ensure that you’re not buying keywords and directing traffic to irrelevant pages.

Google’s motivation for including quality score is to provide an optimal user experience
for their searchers. It used to be that ad placement was determined solely by bids, but
then someone could easily bid on “toothbrushes” when they were really selling lawn
mowers. Google introduced quality score to make sure that the ads they were displaying
were always relevant to the search terms, and to keep their advertisers in check.

So how does it work? Quality score is on a scale of 1 to 10, with 1 being the lowest rating
and 10 being the highest. What this means is that if your competitor bids on a keyword at
$5 and has a quality score of 4, and you bid on that same keyword at only $3 but you have
a quality score of 7, Google may give you the top position for the price you bid because
your ad is more relevant. It makes more sense to serve your ad because its higher
relevancy makes it more likely that viewers will click on it, which is better for Google, its
searchers, and its advertisers.

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Quality score can also help you determine what keywords are cost-efficient for you to use.
Let’s say, for example, that you have a site about fitness tips and you bid on the keyword
“nutrition.” If you find that you have a low quality score, it may indicate that the content on
your site is not relevant enough to compete in that space, and it’s not a cost-efficient
channel for you. You can use this information to optimize your choice of keywords.

If you want to set yourself up for a successful PPC campaign, show Google how tight you
can make the relationships between the keywords you’re bidding on, the ad copy that
you’re displaying, and the landing pages you’re directing to. We’ll discuss strategy for
optimizing each of these in the next section. If you can do this, Google will see that you
really know what you’re doing, and they’ll be far more likely to put your ad in that top
position for the least amount of money possible.

Keyword Match Types

When it comes to when your ad is displayed, you don’t just want to pick a certain group of
keywords and have the ad shown only when those keywords are entered into the search
engine. Since there are an infinite number of ways that people can actually search for one
term, Google has three keyword match types that you can use to give them more specific
instructions for when to display your ads. These are: exact match, phrase match, and broad
match.

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Let’s say, for instance, someone searches for the term “red men’s tennis shoes with Velcro.”
A keyword set to exact match will only display your ad if the search term includes that
exact keyword, or a very close variation. So, for example, if I have the keyword “red men’s
tennis shoes” on exact match, and someone searches for “red men’s tennis shoes with
Velcro,” my ad may not be displayed, since there were other words included, making it not
an exact match. Exact match keywords are surrounded in brackets, such as:

[red men’s tennis shoes with velcro]

A keyword set to phrase match will display your ad if the search term contains the same
order of the words, but it can also contain additional words. So if I have the keyword “red
men’s tennis shoes” on phrase match and someone searches for “red men’s tennis shoes
with Velcro,” my ad will appear. However, if they search for “men’s red tennis shoes with
Velcro,” it will not appear. Phrase match keywords are surrounded in quotes, such as:

“men’s tennis shoes”

Lastly, a keyword set to broad match displays your ad when the search term contains any
or some combination of the words in your keyword, in any order. Your ad could also show
for other variations of the words, such as singular/plural forms, synonyms, etc. If I have the
keyword “red men’s tennis shoes” on broad match, my ad could show up for “red men’s
tennis shoes with Velcro,” “men’s red tennis shoes with Velcro,” “women’s red shoes,” and
so on. These keywords are not surrounded by anything, and would just be left as:

men’s velcro shoes

Additionally, Google allows you to set keywords to a negative match type to help refine
your keyword strategy. This allows you to avoid having your ad displayed when a given
search term is entered. For example, if I set the keyword “used” to negative match, my ad
won’t show for any searches that contain that word, such as “used tennis shoes.” Negative
match keywords are preceded by a minus sign, such as:

-used

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Your Google Ads Strategy

Keyword Strategy

So you have these keyword match types that you know can somehow help you optimize
your campaign strategy – but how do you know which ones to use and when? There are
multiple strategies for setting match types, and there is no one correct solution. We’ll
discuss some general practices, but keep in mind that you’ll have to check out your own
performance metrics to determine what’s working for your campaign and what isn’t.

The value of setting keywords to exact match is that you can target a very specific search
audience. However, if you’re only bidding on exact match keywords, you’ve very
narrowly defined your target, which sharply limits your reach, so chances are you’re not
going to get a lot of traffic. This is because there’s no way to know exactly what terms
people are going to search for, and if you try to guess at a list of exact keywords, even if it’s
a long list, you’ll likely be missing out on tons of potential leads and customers that are
using different search terms.

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To avoid this issue, a popular strategy is to start with all keywords set to broad match,
which opens up the floodgates to all related traffic. Now, a high volume of traffic may be a
good thing, but you have to make sure that it is qualified traffic. In other words, say, for
example, someone searches for “Velcro” and your ad for “red men’s tennis shoes with
Velcro” appears. The viewer may click on your ad, but because the search term that sent
him to it was so general and vague, the likelihood that he will convert to a lead on your
offer is significantly lower. This is because the odds that he was actually looking for red
men’s tennis shoes with Velcro is much lower than it would be for someone who searched
for that term, or something closer to that term.

Yet many people are easily misled by the quantity of the traffic they drive with broad match
keywords, and they don’t look at the reporting to evaluate quality. Oftentimes, they’re
ranking on irrelevant keywords and driving unqualified traffic from them, which just wastes
their money. This is why it’s extremely important, if you set your keywords to broad match,
to closely monitor what search queries are coming through. Don’t forget, you can use
negative match to add negative keywords when necessary.

A good keyword strategy is to use broad match and phrase match to drive traffic, then use
the Search Terms report to find the keywords that convert well and make sense for your
business, and set those to exact match, because they’ve been proven to work.

The best thing to do to figure out your match type strategy is to just keep testing. Use your
performance metrics to optimize your keywords, which could include adding and deleting
keywords or changing their match types. It’s an ongoing process. Keyword performance
will change over time, and your campaign strategy should change with it.

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Account Structure

The structure of your actual account in Google Ads is critical to the efficiency and success
of your paid search campaign. So you have your keywords, you have the list of keywords
that you’re buying, and then you have the ad that you want to show when somebody types
in one of those keywords. Now, say you want to group together the keywords for which
you want your ad to be displayed, so that you can create highly relevant ad copy for these
keywords and increase the likelihood that the searchers are going to click through.

You can do this by creating a grouping of related keywords in what is called an “ad group.”
For example, say you’re targeting terms like “tennis shoes,” “best tennis shoes,” and “shoes
for tennis.” You can create a “Tennis Shoes” ad group, put those keywords in the ad group,
and create an ad that closely targets to those keywords. If your company also sells other
kinds of shoes, set up more ad groups, maybe for “Walking Shoes” or “Running Shoes.”

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Let’s say your company also sells shirts, though. Google lets you structure your account on
one more level as well, and that is by “campaign.” So, you can take all of my ad groups for
shoes and put them in a “Shoes” campaign, then create another campaign for “Shirts,” with
its own ad groups, keywords, and ads.

It’s important that you structure your account in such a way that your keywords and your ad
copy are tightly woven together. Then you can use your ad groups and your campaigns to
keep them nicely bucketed together and better organized.

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Setting Your Budget

When you pay Google for your PPC campaign, you don’t take out your credit card every
time someone clicks on your ad. Instead, you set a daily budget on the campaign level.
So for each campaign, you can dictate how much money Google can spend on those ad
placements per day. I can say, I want to spend $300/day on my shoe campaign and $200/
day on my shirt campaign, and Google won’t exceed those amounts.

What if all that money is spent in only an hour or two? After all, if you have highly relevant
or very popular keywords, you do run the risk of blowing through your budget quickly.
Well, Google also offers a feature that allows you to request that your budget be spread
out throughout the entire day. This works well for brands that want to establish a presence
throughout the day.

The daily budget cap is certainly a reassuring feature, especially for those who are just
starting out with paid search. You can set a low budget when you get started, slowly begin
measuring success and lead quality, and try your hand at optimizing your campaign before
you really invest a lot of money in it.

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Optimizing Ad Copy

Now, just because you set a daily budget of, say, $500, doesn’t mean that the entire
budget will be spent every day. Google will try to spend your full daily budget, but the
ability to do so ultimately depends on your keywords, but also on the effectiveness of your
ad copy. If you can’t get anyone to click on your ads in the first place, you’re not going to
be paying anything. This is why your ad copy is critical to an effective PPC campaign.

When it comes to creating your ad, there is essentially a formula for it, since Google lim-
its the number of characters you can use. The numbers you need to remember are: 3x30,
2x90, and 2x15.

You have headlines (30 characters each), which are displayed in blue text as the first line of
the ad. Then you have 255 characters (35 shown) for the display URL (also called the
“vanity URL”), which is not the actual URL to which your ad directs viewers, but is simply for
display purposes. For example, if my ad is about polo shirts, I could set the display URL to
be www.acme.com/polo-shirts, even if this isn’t the site to which I’m redirecting. The URL to
which you actually direct clicks to your ad is called the “destination URL.” These will often
be longer and may contain tracking codes, which makes them messier – so of course, you
wouldn’t want these displayed in your ads anyway.

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Then you have two description lines of 90 characters each. You’ll notice in the sample ad
below that there are actually a few incentives there. The first line informs viewers that they
can get a new office renovation. Even if they’re not convinced, they can learn more about
the costs and benefits for free with an expert.

Headline
Display URL
Description

This is the typical format of a paid search ad, but Google is constantly testing, so if your ad
is displayed at the top of the search results, it may look different.

Whichever ad structure you’re working with, make sure you maximize use of the limited
number of characters you’re given, and make your ad as effective as possible.

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Measuring Your Success

Defining the Four Basic Metrics

Now you have your ads, your keywords, and your account structure, and you want to opti-
mize all of these. Well, the only way to optimize your campaign is by using the metrics and
reporting that Google provides. Let’s take a look at the main metrics you should be paying
attention to, and why each is so important.

There are four basic metrics that are important for paid search: impressions, clicks,
conversions, and spend.

An impression is a single instance of your ad being displayed when someone types in the
search keyword for it. So you can consider the number of impressions to be roughly the
number of people who look at your ad, or at least the number of viewers to whom the ad
is served.

A click is an instance of a viewer actually clicking on your ad once it has been displayed.
This is distinct from the number of impressions because it requires that the viewer actually
clicks on your ad, not just that your ad is displayed.

A conversion is an instance of a viewer that saw your ad, clicked on it, and took the action
you intended for them to take once they got to your landing page. This action could be
downloading an offer, purchasing your product, etc. When you set up your account, you
put some tracking code on your website that lets Google know when someone has com-
pleted an offer or bought something, so they can keep track of conversions.

Spend is simply the amount of money that you have spent on your campaign so far.

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Combining the Four Basic Metrics

These four basic metrics are important to track, but the analytics that will be the most
critical for optimizing your campaign are derived from combinations of these simpler
ones: click through rate, conversion rate, cost per click, and cost per acquisition.

Click Through Rate (commonly abbreviated as CTR) is the percentage of impressions that
turn into clicks. The more this percentage goes up, the more efficient your campaign is.

CTR = Clicks / Impressions

Conversion Rate is the percentage of clicks that turn into conversions. This is also a metric
that denotes increasing efficiency as it goes up.

Conversion Rate = Conversions / Clicks

Cost Per Click (or CPC) is the amount of money you’re spending on each click. You can find
the average CPC by dividing the total spend by the total number of clicks. This is a cost
metric, so improving efficiency means decreasing this number as much as possible.

CPC = Spend / Clicks

Cost Per Acquisition (or CPA) is the amount of money you’re spending on each conversion.
You can find the average CPA by dividing the total spend by the total number of
conversions. Again, this is a cost metric, so you want to keep lowering this number.

CPA = Spend / Conversions

Just remember – the higher your percentage metrics and the lower your cost metrics, the
more efficient your campaign will be. It’s a good practice to set goals for your campaign
performance in terms of these metrics. As you continue optimizing your keywords, ads,
and account structure, monitor these metrics closely and use them to measure the
performance of your campaign as you work toward reaching your goals.

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Final Thought

After reading this ebook, you should have a solid understanding of how paid search works,
and a strong foundation to create and manage a paid search campaign for your business.
Here are a few important takeaways to remember:

• Paid search is based on a pay-per-click (PPC) model.

• Account structure is critical. Organize your campaigns, ad groups, keywords, and ad
copy appropriately.
• Aim for high quality scores to increase performance and reduce costs.
• It’s easy to waste money, so be careful how you choose to spend it.
• Use paid search to compliment your inbound marketing. Focus on mastering inbound
marketing first
– blogging, driving leads, understanding search engine optimization, etc. Find out what
keywords are directing traffic to your site from organic search results, and use these to
inform your choice of keywords for paid search.
• Always be optimizing! There’s never a shortage of ways to improve your paid search
campaign. Keep making improvements so you can drive your performance up and your
costs down and ultimately run a successful PPC campaign.

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BONUS: Recent Google Ads
Innovations to Take Advantage of
Focus on Responsive Display Ads
Advertisers are putting a much heavier focus on responsive ads; 72% of the display ads
SEMrush reviewed in the latest research were from responsive ads, and this makes sense.
Advertisers have limited time and resources, but an overwhelming number of products to
promote. Responsive ads were the easiest way to reach users in the display network.

Leverage In-Market Audiences For Search

These audiences are designed for advertisers focused on getting conversions from likely
buyers. In-market audiences can help drive remarketing performance and reach
consumers close to completing a purchase. In-market audiences can be used not only as
a targeting option for display campaigns, but as bid modifiers for search campaigns. In
2018, Google launched several new in-market segments and gave access to this feature to
a greater number of advertisers. The best tactic to employ with in-market audiences is in-
creasing bets for searchers from those segments: they will be potentially more interested
in your product or service.

Use Responsive Search Ads

Responsive search ads let you create an ad that adapts to show more relevant messages
and text to your customers. The ad works based on AI: the advertiser adds up to 15
headlines (each one up to 30 characters long) and four descriptions up to 90 characters
long. Google combines the headlines and descriptions to figure out the best performing
combinations, generating up to 43,680 ad variations - a tough number to test manually.

Optimize Your Keyword List for Voice Search

According to a PWC report, 71% of respondents would rather use their voice assistant to
search for something than physically type their queries. This trend will significantly change
keywords, as more and more words are used when complete questions are asked. To make
the most out of it, add longer keywords to your list and offer answers to users’ questions in
your ads; advertising text creatives don’t always have to be short and concise.

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