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How Google Ads Work & Generate Success for SaaS Businesses

How Google ads work
Reading Time: 18 minutes


It can be quite beneficial to target your customer with a message at the exact opportune moment. It is crucial for SaaS businesses to leverage Google Ads (earlier known as Google Adwords), but not everyone knows how Google ads work. It literally changed how companies can reach out to potential clients. Google ads offer targeted visibility on the most popular search engine in the world. Its utilization can also help transform searches into sales, thereby improving the overall profitability of an enterprise.

Google Ads is a pay-per-click advertising model that works like an auction. Firms compete for attention and supremacy among customers seeking the advertising services of the particular firms. For efficient operation in each market, there is a need to appreciate the environment to succeed as a SaaS. In detail, this article will explain how Google Ads works and how the tool can help your SaaS business soar.

That includes a look at the most important fundamental factors like AdRank and Quality Score. It also includes an overview of specific ad types and practical instructions on how to create the campaign. Here is a detailed guide into the world of Google Ads and its boundless opportunities to sharpen the SaaS market presence.

What is Google Ads?

what is google ads

Google Adwords, now referred to as Google Ads, is an internet advertising service launched by Google. It offers advertisers pay-per-click advertising for a Google’s search ad and other websites. Also, a Google search ad does not charge the cost per impression. Instead, it uses the pay per click model where the advertiser is charged each time an internet user clicks on the placed ads.

Marketers first choose relevant keywords they wish to focus on. These are terms or words that viewers might input when using a search engine to look for specific products or services. This way, businesses hope to target users who are actively seeking the products or services that the businesses offer. They do so by associating their ads with the keyword phrases that users enter into the search engines.

The platform offers different campaign types to suit various advertising goals. They include the following:

  • Search Ads that pop next to the results on Google Search
  • Display Ads that can be seen on a list of partner websites 
  • Shopping ads are a form of advertising that is used to promote products 
  • YouTube Ads that is a type of video advertisement
  • App Campaign, which is used in the promotion of the installation of certain apps

Many firms choose to allocate a specific amount of money to a particular campaign and use this as the amount for bidding to a certain depth for ads to be placed. Therefore, Quality Score of the ads or relevance and interest helps place an ad on better positions that on SERPs or on other platforms as per bid amount.

Google Ads works in tandem with Google Analytics, which entails more advanced features and various forms of conversion measurements to help the advertisers encompass a better understanding of their advertising campaigns with the intention of improving their campaigns’ efficacy.

Why Advertise on Google?

Advertising on Google offers several substantial benefits:

  • Vast Reach: Google’s global coverage and being the best search engine offer advertisers or businesses a pool of audiences who are in need of information or products/ services.
  • Intent Targeting: Google Ads entails the ability to appeal to user searches; the audience is often inclined to engage with the business to find solutions to problems within the Google Ads niche that are relevant to their business.
  • Flexible Budgeting: Google Ads (Google Adwords) lets you set the maximum amount of money that you are willing to spend for a day and the bidding option which is in line with the promotional goals you have set, to make sure you don’t go bankrupt.
  • Measurable ROI: Google provides incredibly powerful tracking tools for measuring the ROI of your initiatives and gives insights on where adjustments should be made.
  • Varied Ad Formats: What makes is unique is the freedom to choose the type of advertisement, which can be a text based, image-based, video-based, or even an actual product listing.
  • PPC Model Efficiency: Compensation per click means the specified dollars are only being spent on prospects with enough interest for the ads; this normally proves much more effective than most paid efforts in advertising.
  • Quick Results: With Google Ads, people can begin coming to your site at once, while with organic search, it takes time to gain traffic once the link is clicked to go active.

Google Ads is a strategic solution for any firm – large or small – wishing to acquire new web traffic, increase online sales, generate leads, or encourage customer repeat visits.

Knowledge about Google Ads (Google AdWords) entails the knowledge and interaction with commonly used terms that define the performance of your ads. These terms form the skeleton of your strategy and greatly influence the outcomes of your web advertising efforts. This will ultimately help you with your ad rank. All of the aspects, ranging from selecting the proper keywords to achieving the greatest Quality Score, work synergistically to increase the influence and efficiency of your campaign.

1. Ad Extensions

Ad extensions are additions to your ads, extending them in order to serve the target audience with enticing and useful information presented in a more comprehensive and noticeable manner. These additional details prove useful and contribute to increased visibility and effectiveness of the ad. Common extensions include:

  • Call buttons
  • Location information
  • Links to specific parts
  • Directing to the website
  • Additional text.

Quite often ad extensions enhance click-through rates because they provide the user with additional reasons or ways to approach the given advertisement.

2. AdRank

Ad Rank defines the placement of an ad on a search engine results page. Advertising through Google or any search engine involves the following Marketing Strategy. It is worked out by including in your bid your ad’s quality as determined by Google in the form of Quality Score and other variables like the topic of the organic search made by a person. Ad rank, in other words, is the quality of your advert in relation to other adverts; the higher its rank, the better the position it gets, which tends to translate to visibility and higher click rates.

3. Bidding

In Google Ads bidding, bidding refers to setting the highest amount you are willing to spend in a click on your advertisement. It is crucial to note that the system of bidding is used in conjunction with the Quality Score in the process of determining your AdRank. Choosing the bidding method also comes in two categories: the manual bidding method, where the advertiser has the ability to set the maximum bidding price as per the advertiser’s choice, and on the other hand automated bidding tools, where Google manages the bidding for the campaign based on the goals that the advertiser sets for the campaign.

4. Campaign Type

google campaigns for saas businesses

This simply implies that the campaign type that you choose in Google Ads should correspond with the general advertising objective. The main type of campaign is the Search Network campaign, where ads appear on Google search results. Google Display Network campaigns are ads displayed across Google’s Display Network. a Shopping campaign, which consists of product-listing ads on Google, video ads, for example, YouTube ads, app campaigns targeting the installation of specific apps, and engagement of installed apps.

5. Click-Through Rate (CTR)

Original definition: Click-through rate or CTR is the number of clicks divided by the number of times a user sees an ad (impressions). It is defined as how well the ad being placed performs in being clicked on. Intuitively, a high CTR indicates that your advert is relevant and interesting to potential buyers, meaning that they will have a higher tendency to click on it.

6. Conversion Rate (CVR)

Even though conversion numbers can be misleading when used in isolation, some of the most important metrics include the click-through rate (CTR) and the conversion rate (CVR). This desired action can be as simple as buying a product or even subscribing to a newsletter list. CVR is instrumental in IoT understanding the impact of the campaigns that are run in the targeted on the specific goals that you had in mind as you developed the campaign.

7. Display Network

Build your advertising message on Google’s Display Network, which comprises numerous websites and specialized Google sites like YouTube and Gmail. This network enables them to advertise to the users in text format, pictures, and video, besides leading users to Google only.

8. Impressions

Clicks are usually the number of people who clicked the link to your website from the ad or clicked on an ad placed on a website on the Google Display Network. As for the metric of total impressions, that’s the number of times your ad is shown to the user, whether they click on it or not. This way, you can get an idea of how many times your ads are being served, though it may not give you the precise figure.

9. Target Keywords

Target keywords are those words or phrases one uses to search for or describe the product or service being launched. They are displayed to the public when they are searching the key terms or browsing through the sites associated with all those terms. Keywords must always be aligned to the product or service offering in an effort to target the right audience that shows interest in the products and services offered.

10. PPC

PPC means pay-per-click, the internet marketing method that is used with the help of which the advertiser has to pay the publisher for each click upon the advertisement. It is a model of acquiring traffic to your site as opposed to seeking to somehow ‘attract’ the visitors to your site. Google Ads is the most commonly used PPC advertising platform among the many PPC advertising platforms that are available.

11. Quality Score (QS)

Quality Score is a measurement tool by Google that is used to evaluate the relevance and quality of keywords and/ or pay-per-click advertisements. It depends on elements like CTR, the proximity of each keyword of an ad group regarding relevance to the other keywords of the ad group, quality and relevance of the ad’s landing page, and ad group performance in the SERP. Quality scores can give tricks and result in cheaper Google ads costs and better placement for the adverts.

Using these terms and neglecting their potential impact on Google Ads with possible upgrades and close watching of how it then affected such a campaign would result in controlling a higher ROI.

Types of Google Ads

types of google ads

Google ads have many types that enable the organization to achieve its specific advertising objectives and target customer base. There are responsive search ads that focus on keywords, Google display ads that are visual pieces of content such as banners popular on websites, and video ads done on YouTube. The available campaigns make it easier for an advertiser to choose the most appropriate campaign depending on their goals, which include website traffic, sales, leads, or app installments. 

Campaign types include:

  • Responsive Search Ads
  • Performance Max Ads
  • Discovery Ads
  • YouTube Ads
  • Display Ads
  • Shopping Ads
  • App Ads
  • Smart Campaigns

All of them involve the use of complex Algorithms and various bid techniques to place an advertisement where potential customers can view it. Possible ad formats with these networks enable advertisers to place their ads in Google formats search engines, partner sites, and videos.

Responsive search ads

Text-only ads are dynamic mobile search ads that enable business persons to create unique ads that will be optimized to fit potential clients’ search terms. Ad designers are given many headlines and much copy, and Google Ads blends all these materials to achieve higher click-through rates. It increases the likelihood of raising a message that will effectively appeal to the intended receivers, which might enhance the campaign’s click-through rate.

Performance Max ads

It’s a strategy that allows the creation of advertisements oriented toward maximum performance in all of Google’s advertising platforms and stock. Real-time ad delivery through the use of machine learning, when involved in this campaign type, targets all of Google’s network interfaces, such as the Search Network, the Google Display Network, YouTube, Gmail, Facebook ads, and the rest. 

Performance Max campaigns automatically decide on budget distribution according to possible effectiveness due to the goals that advertisers set in this context to reach customers at multiple touchpoints.

Discovery ads

A Google discovery ad constitute one of the visual ad forms and are placed on Google feeds — the YouTube feed, the Gmail Promotions tab, and the Discover feed on portable devices. They are targeting consuming clientele who are ready to purchase goods with their eyes open for a new service to be offered to them, which is an opportunity they will welcome. Many internet and digital media advertisements benefit brand owners by targeting customers with visually engaging ads, prompting them to consider the brand more actively.

YouTube ads

YouTube Ads gross an ad video experience on the second largest search engine services provider on the globe. Various video ad experiences are available to reach the intended audience. As one of the most effective platforms for targeted advertising, YouTube Ads tell brand stories to viewers through captivating videos and can be set to achieve impressions, views, or conversion goals. Without a doubt, a video ad is a powerful tool to use. 

As one of the most effective platforms for targeted advertising, YouTube Ads tell brand stories to viewers through captivating videos and can be set to achieve impressions, views, or conversion goals.

Display ads

Next on the list are Google display ads, which are internet advertising formats that may contain text, pictures, or videos and are posted to the users who visit the Google Display Network websites. This network comprises thousands of Internet destinations, ranging from blogs to news sites, where ads may possibly be placed next to corresponding content or to viewers interested in topics related to the advertised content. The importance of a Google display ad lies in the high awareness it brings to a brand and the opportunities to remobilize those who have once visited a certain website.

Shopping ads

By using Google Shopping Ads, retailers are also able to advertise the products that they sell across the Google Search Network as well as the Google Shopping tab. Google Shopping Ads are rich with the name of the business, prices for goods, and their pictures, which means that a user can get the necessary information quickly. Shopping Ads are appealing as they can assist online business organizations, especially in selling their products, given that they enable potential customers to access the desired product for purchase with ease by reaching the product information page quickly.

App ads

App Ads are aimed at marketing mobile applications in Google services, such as Search, Google Play, YouTube, and the GDN. App ads is a type of app monetization in which developers and marketers can prompt the users to install or use their mobile apps. Even a few lines of text, the assets, and the budget suffice, as Google ML optimizes and writes the ads on its own to attract the right audience.

Smart campaigns

Despite the fact that smart ad campaigns can represent the potential of small businesses with low levels of marketing resources, they are quite easy to set up. They are meant to facilitate ad formation, targeting, and bidding processes to minimize the time spent on them while ensuring ad effectiveness. Smart Campaigns leverages the full capabilities of Google AdWords, so businesses must not tweak the flow of visitors to websites or storefronts back and forth.

google ad costs

Google Ads, considered one of the highly effective Internet marketing solutions, operates under the PPC or Pay-Per-Click model, which requires the advertiser to pay for each click that a user gets. Regarding the costs, Google Ads is among those services that depend on the keywords, the industry, the goals of the campaign, and the quality of the advertisements that will be shown.

Google ads do not operate at the requisite fee. The advertiser can choose a competitive bid for their ads by setting limits to daily spending. The actual amount is thus set on a bid-basis, which can be based on an automatic bid or one set by the advertisers themselves. Google Ads functions on the concept of bidding, which means that an advertiser has to bid for the keywords and the places where the ad will be posted. Higher bids for better placement and relevancy of the keywords improve the position of the ad.

Costs also depend on the types of campaigns. However, there is a difference between search network campaigns, display network campaigns, shopping campaigns, and app campaigns. Both Performance Max and Smart Campaigns allow Google to use machine learning to determine the right place for an advertisement to be placed while delivering the most value possible within the set budget.

The average cost has to be controlled, and it has to be evaluated if the return on investment (ROI) is flattering. Connecting Google Ads to Google Analytics will assist in providing comparable insights on the effectiveness and ability to fine-tune the advertising and marketing approach in a bid to minimize costs.

Typical Cost Structure:

  • Average Cost-Per-Click (CPC): Ranges from $1 to $2 on the search network. Display network average CPC might be under $1.
  • Daily Budget: Advertisers choose; it can be as low as a few dollars per day.
  • Campaign Goals & Bidding: Costs adjust according to bid strategy and campaign target.

Remember, qualified traffic and conversion tracking are crucial for optimizing costs and improving the performance of PPC campaigns.

How to create Google ads in 3 steps

Creating Google Ads can be a straightforward process that can be broken down into manageable steps. Here’s how you do it in three key steps:

1. Set a Bidding Strategy

The bidding strategy in your campaign is how you allocate your funds with the aim of achieving most of your goals. Google Ads offers several bidding strategies that cater to different campaign goals: Google Ads offers several bidding strategies that cater to different campaign goals:

  • Cost-Per-Click (CPC): This means that you are charged per click for your ad placements on the websites you target. Ideal for driving traffic.
  • Cost-Per-Mille (CPM): They cost according to the number of times it reaches the thousand to the relevant audience. Useful for brand awareness.
  • Cost-Per-Engagement (CPE): You pay each time a user interacts with your ad in a particular way, which can include – clicking on the ad, sharing or liking the ad, and even making a purchase from the ad, etc.
  • Cost-Per-Acquisition (CPA): This is when you get paid per conversion, whether someone signs up for an application or makes a purchase.

It is always good to consider the objectives and the amount of money that you have as you choose the kind of advertising strategy to employ. There is also automated bidding, where Google fairly sets your bid depending on its performance in a real-time manner in order to have a good shot at the preferred action.

2. Target Your Audience

Outdoor advertising targets a specific vernacular with the idea that only those who have a need for the product or service will take notice of the advertisement. Define your audience by:

  • Demographics: Sex, age, region, income status, etc.
  • Interests: What they like to, which may affect the product they may be likely to purchase.
  • Web searches or some keywords that they may type in to get to or find the website.
  • Retargeting: It is specially designed to re-target those users who have previously been to your site.

The last tip is to leverage the Google Ads tools to further segment your audience by behavior, always in an effort to get optimal value out of the funds you invest.

3. Create Ads

Craft compelling ads that will capture the attention of your target audience. Craft compelling ads that will capture the attention of your target audience. Take time to develop good headlines that are compelling to the visitors.

As you write your advertisement copy, make sure that it is in harmony with the search terms or keywords your targeted consumers would likely input. Ensure that the video have a powerful CTA, because the audience should know what to do next after watched a video.

Do not forget to add ad extensions, for example, site links and call or location extensions, to inform potential clients more about you and increase the CTR value.

When you are done creating your ads, perform a final check and then start running and displaying the ads. Conduct ongoing evaluations on their performance by tracking them with the help of tools such as Google Analytics and conversion tracking so that further improvements in performance can be made.

Ensuring that each of the three steps is carried out diligently will provide the proper backdrop for a highly successful Google Ads campaign.

Conduct ongoing evaluations on their performance by tracking them with the help of tools such as Google Analytics and conversion tracking so that further improvements in performance can be made.

Common Google Ads Mistakes That Prevent You From Growing 

common google ads mistakes

Concisely, it is high time to note that even experienced digital marketers tend to overlook some of the significant pitfalls that can significantly affect Google Ads campaigns. With that in mind, the information highlighted in this section will assist in steering clear of these errors.

Unclear Objectives and KPIs

However challenging the concepts may appear, it is evident that many advertisers to date remain rather ambiguous about their goals and metrics of success.

Well, whichever side you, the client or the Google Ads Specialist, you need to have clear objectives and KPIs if you are to achieve anything.

How can you possibly gauge whether your goals and KPIs are being met or not if the latter themselves are foggy? This could be done in a number of ways, but the most crucial will be to analyze the results of the campaigns to discover whether or not they have been successful. What should you increase or decrease, and what is the rationale for that? Moreover, if you are not clear about how goals should be developed, your digital marketing or Google ad agency must also try to assist in this to the greatest extent possible.

Following Your Gut Feeling

In this case, the basic error is making a decision based on purely following one’s gut feeling.

There are many PPC professionals who make decisions based on instinct, and, unfortunately, there are quite a few of them in Digital Marketing. Take advantage of the information Google Ads provides. Do not be hasty to change things, as this leads to making assumptions about the existing state of affairs.

If you still can’t rationally justify why you are doing it – observe it more carefully or simply get rid of it.

For example, many assumed audience signals were used for targeting when Performance Max emerged, but they are simply tips for Google.

That is why, if you assume a discourse is going to involve one particular audience that it may not, you will accrue all sorts of issues at later dates without ever knowing it. Solving those issues will partly be very hectic. Therefore, avoid the all too common adage of doing something for the sake of doing something and instead make decisions based on facts.

It should be noted that conversion tracking is not an issue here.

Conversion Tracking Is Not Your Priority

From the top Google Ads Specialists, their tracking should be discernibly apparent. Amnesty from responsibility of discovery applies to most Google Ads Specialists, implying that they do not think they need to track. Thus, they never do. Not to mention, or much worse, they are filtering irrelevant data like illogical microconversions.

Overlook to Synchronize Third-party Credit

Google Ads, however, provides a very skewed and unilateral, somewhat self-serving view of things, so one cannot solely base themselves on the information it provides. It is amazing how every ad network likes to take full credit of every single conversion like none of the other channels exist.

It is thus crucial to rely on a third-party attribution tool in order to achieve a more objective analysis of the attribution across all the channels of the marketing mix tool. Please also bear in mind though that as you grow this is more noticeable and is less important especially for smaller SaaS businesses.

Lack of a Testing Strategy

The second most common mistake includes reporting the results of the testing without a structured testing methodology. The solution is simple: establish a test strategy plan as to what needs to be tested, when there is a need to test it, and why this is the case (test hypothesis). That’s it; do not complicate it. 

Lacking a Defined Optimization Protocol

Moreover, most Google Ads Specialists do not have any fixed or concrete plan for optimization. They either optimize to a very high level or sub-optimize so that the system works at a lower than its best level. When designing and placing every single ad, whether on television, radio, magazines, newspapers, or billboards, it should all be based on the conclusions or findings that you have made; given this, the likely unattended or the ad that may go unnoticed is the nonoptimized type.

It will help to try to always set the time to analyze your Google Ads and set some optimizations, although another approach would be to try to pay more attention to the results on a daily basis and set the optimizations wherever you feel would be most convenient.

Not Running the Right Ads

The fact that a company is active in social media does not necessarily mean that it is successfully capitalizing on the opportunity to reach its audience with the right ads.

For instance, many of the gurus use the wrong types of marketing. They heavily depend on Performance Max when it comes to remarketing or re-targeting. Yes, pMax does contain some basic remarketing tools but you will regain at least some amount of control if you use more specific remarketing campaign.

Targeting Incorrect Locations

Your target for your locations should also be matched. Nothing is more unfortunate than knowing that you have spent your money on an ad that reaches a person who cannot afford nor has a desire to use your service. This needs to coincide with making sure that you are also very clear about the entire area you want to target on the Google map. For instance, if your defining audience is in a city, should this also encompass the suburban areas?

Forgetting to Audit Frequently

Based on the present analysis, one significant mistake typically committed by SaaS businesses is the lack of an auditing system. Make it a practice to conduct an audit of your own account every quarter. Even better, allow your account to be audited by another party, and your dispute is that of having your account audited by another party. Just wait till you hear what a smart little counselor it will turn out to be.

Often, we get carried away by these accounts, and sometimes we can’t notice obvious optimizations. This should certainly give your account another perspective of efficiency that can indeed bring a revolution to your work.

Ad Extensions

If you are already utilizing Google Ads, then here are two important factors that will encourage its use of ad extensions. Besides being free, they appeal to the consumer, making him or her want to interact with the advertisement. 

Sitelink extensions generate a sense of relevancy to your advert since it is elongated and has extra links that lead site visitors to your website.

Call Extensions

Phone call extensions enable users another (and quick) way of reaching you personally from the advertisement by adding your telephone number. Give your telephone number if there is a support service that will gladly talk to your audience and persuade them.

Location Extensions

Location extensions enable you to input your address and phone number into your ad so that searchers can easily get an understandable map of your region. This choice is perfect for companies that have a location and do great when users search ‘near me.’

Offer Extensions

If you have an existing promotion or ongoing promotion in place, then offer extensions are usually quite efficient. It is also important since if people observe that you are choosing your products cheaper than your competitors’ products, then they are more likely to click on your ad than the other smart ads that they come across.

App Extensions

Extensions in applications adopted by users of mobile devices present a download link. This reduces the need to scroll through an AppStore once more in an effort to find and download the software.


Google Ads should be involved in any buying strategy because of its vast and reputable network. First of all, you need to try to apply everything we have discussed and not disregard the possibility of refining and transforming it in the process.

Google Ads has only those campaigns that can be run with slight enhancement; they don’t have wrong campaigns at all. All these are essential to developing an efficient Google Ad campaign that yields clicks and leads applying the above strategy and data.

Now that you know how Google ads work, it’s time to create your ad copy, create the ad campaign, determine your ad spend, and make sure the efforts on your Google ads account are aligned with your social media marketing strategy.




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