How does Google AdWords really work [INFOGRAPHIC]

Google’s advertising network is referred to as Google AdWords. The way the Google Adwords network operates is by allowing advertisers to bid on an endless selection of keywords that they believe may be typed into the Google search engine in search of information. When an advertiser bids on a specific keyword, and they bid a high enough price, the result is that their ad will appear in a special segment of the search engine results pages for that keyword which is located both above the regular search engine results (shaded in yellow) and along the right side of the page as well.

If an advertiser does have an ad appear in one of these places, and a search user happens to click on the advertisement, traveling to the advertiser’s optimized landing page, then the advertiser will be charged based on the bid amount. This means that the advertiser is only paying for advertising when the ad is actually being clicked rather than simply for having it displayed. The advertiser does not have to pay for the ad to appear, they only have to pay for the traffic that they actually receive as a result.

What is paid for each click is going to be determined by what other advertisers are bidding for the same keyword. It will also depend on the relevancy of the ad within the Google Network based on what the keyword is. This Google AdWords system has become an excellent way for internet marketers, business owners and other advertisers to acquire leads. However, it is important to know that in order for Google AdWords to work successfully for an internet marketer, they have to have a firm grasp on how the system works, because keywords with high conversion rates on Google AdWords are often quite competitive, and misusing the system can result in poor results; the dreaded unforeseen consequences.

Pay the most money, and you can get your text-only ad to be number one on Google, right? The Google AdWords system is far more complicated than that.

A good “Quality Score” gives an edge to advertisers, even if they aren’t the highest bidder. “Ad Extensions” mean that ads can show pictures, maps, ratings  and more.

The infographic below from the folks at Pulpmedia illustrates some of the many moving parts like this within AdWords:

Technically, having a Quality Score under 4 doesn’t mean that your ad can’t show. You’ll get a message saying the ad doesn’t trigger because of a low AdRank. But if you were to pay much more, that would boost your AdRank and let the ad appear. Of course, it would be far better to improve your ad itself!

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