Google Ads guide for ecommerce store owners

As a webshop owner, until you get enough organic traffic, it’s a life and death struggle to see how many people know your brand, your products and how many people buy from you.

But breaking into the market as a start-up online store is not easy. 

You’re the new boy in class, where everyone knows everyone and you have to introduce yourself. Google Ads is the solution, a kind of modern digital billboard where you can show off your shop, your product. 

Yes, but Ads is not easy to understand at first glance, especially if you don’t know much about digital marketing. That’s why in this article, we’ll give you the tip of the Google Ads iceberg, which can be a very good basis for a later, closer understanding.

Let’s get started!

What is Google Ads and how do ads work?

As mentioned tangentially above, Google Ads is a kind of digital billboard, and as such it sits above Google’s organic results. In fact, you can find them in YouTube videos, banner bars on websites and even in mobile games.

So Google Ads is the TV ad of the modern world, on almost every digital platform. 

But how do they work? 

Google Ads (formerly known as AdWords) campaigns are so-called PPC (pay-per-click) advertising. 

It works like a mini-auction, where you bid on a keyword on Google and compete with other advertisers bidding on the same keyword. 

As such, you have three bidding options to choose from: 

Cost-per-click (CPC)

In a nutshell, this is the amount you pay when a user clicks on your ad.

Display-based advertising (CPM – Cost-per-mille)

Here, of course, you do not pay when the user clicks on the ad, but when it is displayed to the user. 

Cost-per-engagement (CPE)

The CPE shows the amount of money you pay when a user performs a certain action (for example, watching a video, subscribing to a list, or any other interaction).

We’ll do some quick math here, because as an online store owner you need to be aware of what a conversion or click-through rate is

Understanding conversion and conversion rate

Conversions happen when a user completes a goal or task you have set. For example, subscribing to a newsletter, downloading an e-book, requesting a quote, but conversion is also when a purchase is made. So what is a conversion depends on the goal.

Conversion-rate (CVR) shows how many of the users from an ad have performed the given action. Let’s give an example. 

You are running a CPC ad that 10 people click on. Of these 10 users, 4 bought the product, so the conversion rate is 4 / 10 = 0.4 or 40%.

The click-through rate

The Click-through rate (CTR), on the other hand, shows how many of the impressions clicked on the ad (so CTR is not the same as CVR, even if many people confuse it). 

For example, if the ad is shown 100 times to users and 34 of them click on it, then 34 / 100 = 34% click-through rate. 

How many of these 34 users will actually convert (buy, subscribe, download the e-book, etc.) will be shown by the conversion rate.

Types of Google Ads campaigns

There are 9 different campaign types that you can create within Google Ads: 

  1. Search
  2. Display
  3. Video
  4. Shopping
  5. Discovery
  6. App
  7. Local
  8. Smart
  9. and Performance Max.

Let’s take a brief look at them!

#1 Search

Search ads allow your online shop to appear above Google’s organic search results. 

Ads are shown to people who search for keywords related to your product or service. 

For example, these ads appeared for the keyword “winter shoes”.

#2 Display 

Display ads are displayed on websites/mobile apps, so users will see them as soon as they enter a website or play an app. 

Display advertising can be a good idea if your user doesn’t know you or your product yet, so they are at the top of the funnel (TOFU). 

In this case, the keywords should be broader, for example “winter clothing” or “shoes to keep you warm” in the above case.

#3 Video

Video ads, perhaps unsurprisingly, appear as YouTube ads. If your target audience is present on the video-sharing platform and likes to watch videos, it is worth including these types of ads. 

You need simple, short, to-the-point, yet eye-catching ads, because you only have a few seconds to grab the viewer’s attention. 

#4 Shopping

If you had to choose one from the list, perhaps the shopping ad type is the one that best suits an online shop. Here you can search for a specific product or category, and you can also present what you sell in detail. 

This way, users can click on an ad in a more targeted way and are therefore more likely to buy it, so you can optimise your advertising costs. 

Plus, you can display catchy things like a discounted product or free shipping, so it’s worth highlighting these benefits. 

This is how winter shoes appear in shopping advertisements:

#5 Discovery

You can also use the Discovery ad type to make your ad available in feeds other than Google, such as the Mail Promotions or Community folder, or in the YouTube homepage and Featured Videos feed. 

This is the best way to increase engagement, brand awareness and create visually rich ads. 

#6 App

If you already have a mobile app, you should definitely incorporate the App campaign into your advertising strategy, but otherwise feel free to ignore it. The goal here is to get your app in front of your target audience and convince them that it’s worth buying through it. 

#7 Local

If you also have a traditional physical store (or an offline store), you may want to include this type of campaign in your advertising strategy. This campaign type will display your store location on Google Maps, YouTube and even in search engines. 

#8 Smart

Smart Ads are easy-to-configure campaign types and can display your online store on multiple channels, such as search results, YouTube, Gmail, Google Maps and other partner sites. 

These ads deliver results based on the objectives of the campaign, and you only pay for them if someone clicks on your ad. 

#9 Performance Max.

Performance max is a very recent ad type, and as the name suggests, it is a quasi-performance maximising campaign. With such an ad you can appear on the entire Google Ads network. 

This will essentially replace classic campaigns such as Facebook.

Need help with Google Ads? 

As you can see, Google Ads is very complicated and difficult to understand at first, and if you don’t set your budget and ad type correctly, you can blow your budget. So your Ads campaign certainly needs expert hands to run it and to get as much money as possible flowing into your coffers. 

Get a free quote and put a stop to escalating costs. And if you’re wondering how much it costs to start a webshop, read our article on how to do it. 

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