How Google Ads Works in 2025

welcome to my get Google ready series for 2025 and this is a series that I release every year where I take you through not only how to correctly set up your Google ads campaigns but also how to optimize them in the right way let's be honest every year there are changes in Google ads and 2024 has been no different there has been a whole hip of different changes that have meant that we've had to slightly adjust how we set up and how we optimize our Google ads campaigns so if you are a beginner or you've

been doing Google ads for a long time you're going to get a lot of useful and practical tips on what is working in Google ads right now what I share throughout this playlist is the strategies that are used for campaigns that they're spending you know from $1,000 a month all the way up to over $750,000 a month so these principles which I'm going to take you through will work regardless of what stage in your business you're in what I wanted to do in this first video is to take you through the core four factors that

you need to understand about how Google ads work now we're not going to be going doing a massive deep dive into the algorithm but what I do want to do is I just want to give you the core understandings of what you need to understand so that you can then create the best campaigns for your business now before we get into those four core elements one of the big things that you do need for success with Google ads is that you need a correct optimization strategy for your business not optimizing your Google ads campaigns is

the fastest way to just hand Google free money and say goodbye to your business profits but on the other hand over optimizing your campaign can be just as detrimental to your business business and that's why it's important that you have a systematic approach to optimizing your Google ads campaigns where you are reviewing data making optimizations and then waiting for the next round of data so that's why with my Google ads optimization checklist I don't only list all of the tasks that you need to complete but it also gives you a guide of how often you

should be completing these tasks now if you've got any of my previous Google ads optimization checklist I do need to stress that this is my updated checklist for 2025 and it also includes the six major campaign types that going to be teaching you through throughout this series which is their Google search campaigns shopping campaigns performance Max display video and demand gen so if you want to get access to that checklist just follow the link in the description below all right with all that said the first thing that you need to understand about Google ads is

how the auction in Google ADS works now most people be familiar that Google ads is based on an auction but the auction operates different in that the highest bidder doesn't always win so for example like a house auction you pay the most money you get the house whereas for Google ads it works on a system called your ad Rank and this has been changing over time and it used to be just based on CPC and your bid and your quality score now there's other elements that take into place and it's actually six core elements so

to explain these properly let's jump into a screen share so I can take you through the six factors that determine your ad rank what I want to take you through here is the factors that determine your ad Rank and the first thing is your bid and I'm just going to give you the definitions of these and this is the maximum amount that you are willing to pay per click now this can be set manually but it can also be set automatically when you're using automated bidding strategies like maximize clicks or maximize conversion or maximize conversion

value now for those automated bidding strategies later on in this playlist I am going to be doing a whole lesson on that but essentially what happens with an automated bidding strategy is that Google controls your cost per click so the maximum amount that you're willing to pay based on to achieve your goal so I'll do a whole lesson later within this playlist where we talk more about autom bidding strategies but essentially that's the first element that determines your ad rank so remember Google ads is based on an auction so there is definitely amount of how

much you're willing to pay and this is sometimes why you can see a big variance between different business niches there can be some businesses where you may be paying only a dollar cost per click to win an auction whereas for other businesses it can be up you know well above $100 and that's because it all comes down to the amount of advertisers and also how much different people are willing to pay so if there's more advertisers who are willing to pay a high amount that does definitely drive up your cost per click but there are

those other elements and the other core factor is the quality of your ads and the landing page now this is also known as what we would call your quality score what Google is trying to achieve here ultimately they want to match the most relevant ads to the most relevant landing pages and this all comes back to the users's initial search now the reason for why this is so important for Google is because if they continue to serve up poor quality ads they know that ultimately people will stop clicking their ads and that's the way that

Google gets paid when I was talking about before for about your bid the amount of people who are bidding on the same similar keywords or the audiences or whatever you're trying to achieve in your campaign that puts upward pressure on how much you're going to be paying per click the quality of your ads and your landing pages puts downward pressure so it doesn't mean that if there's a holy of competition and other people have to pay $20 a click if you've got better ads and learning Pages it's not going to bring that cost down to

a dollar but it may save you so the 10 to 20% on your cost per clicks if you've got highly relevant ads and landing pages the next thing and this is what's called current ad rank thresholds now for some of these next metrics this is really coming around through Google introducing more automated learning and it's taking in some predictive elements so what it's looking at here is these are the minimum standards that an ad must reach in order to be shown in the auction and this comes back to what is in the auctions so there

might be higher ad rank thresholds for different Industries so what it really comes down to is it really comes down to what your competitors are doing and what you always want to be looking at is that if the you've got better ads and better landing pages than your competitors this is going to be a positive in your favor alternatively if you've got competitors who have better quality ads and better quality landing pages you are going to have to pay higher to get relevant Clicks in that auction what we're saying through here as well the competitivness

of the auction a simple way to think about it more competition equals higher cpcs remember how was saying before Google was using more Ai and automated learning this is the other part which is becoming really important the context of the user search what this this takes into account it takes into account the users recent search term so nothing to do specifically with the ads but what Google is doing here is it's taking into account what the user has been searching and how relevant that is to your ads and your landing pages and then it takes

it even further than that and that is the expected impact of your ad assets and other AD formats and what Google is looking at here is if Google believes that assets will increase the chance of a click you more likely to get a higher ad rank what I really want to build this down because this may sound very confusing you just need to remember the main objective for Google is to show the most relevant ads that are advertising the most relevant landing pages to the users initial search so when it comes to Google ads and

I know this part of how the auction Works changes all the time but if you could just think through that last part of the screen that I showed you if you can have relevant search ads taking people through to relevant landing pages from their initial search inquiry you're always going to be in the topper part of your Niche so that's what I just really want you to focus on is success with Google ads is really breaking down and looking at creating the most relevant ads with the most relevant landing pages for a users search inquiry

now the next part of what you need to understand about Google ads is that yes it's based on an auction but you can also Target your ad through different mechanisms and that's through keywords different demographics different audiences different locations different times of the day or even days of the week different devices so you could go to mobile only or desktop only and then what is also becoming more important in Google ads is your content placements so different websites YouTube channels or even apps where your ads are showing the thing that I love about Google ads

is that you can have a targeted ads campaign so with Google ads you can go very broad but then you can also go very specific so let's just say for example you are selling some multivitamins and they're only for people over 40 so rather than just targeting it to anyone who searches in the turns multivitamins you could put exclusions in there and really just set your campaign up so that your ads are only shown to people who are over the age of 40 and let's just say you want to Target it for more Regional cities

that don't have large pharmacies or chemists that can buy these supplements very easily you could even have a campaign targeting Regional cities to people who are over 40 so the one thing that you want to be thinking about with Google ads is thinking about who is your target audience who are the people that are going to be buying your products or booking in your services and you can create your campaign to spend the most amount of money in those targeted locations to those targeted demographics but another thing that I mentioned at the end there is

all about your content placements if you're using more newer types of campaigns that really targeted approach to Google ads is more related to your search and your shopping and even your display campaigns but for some of the newer types of campaigns which are more broader so your performance Max and your demand gen campaigns what really becomes important with those types of campaigns is where your ads are showing and what I mean by that is your content placements and you can see improved success by really monitoring and adding in extra exclusions what I want you to

think about is this if you've run any Google ads search campaigns you know that the main optimization action that you can take is by adding in extra negative keywords to stop your searches appearing for unrelevant searches you can do the same thing with content placements if you're seeing that Google is showing your ads on websites that are not relevant but are also just wasting ad spin you can add them to exclusions so that you can improve the performance of your account the Third thing that you need to remember about Google ads is that campaigns are

set at the budget level now the reason for why this is so important is because when it comes to setting your budgets within Google ads what you want to do here is you want to create what I call levers in your account and you want to be able to create those different levers so that you can focus your spending on the areas where you're seeing the greatest levels of success with Google ads now there is some technical skill to get success with Google ads but one of the easiest ways to improve the performance of any

Google account is to increase the spending in the areas where you're seeing the most positive results and decrease the spending in the areas where you're seeing poor results but a lot of people can't do that because they haven't created proper levers in their business and that's why it becomes so important that you only want to be advertising the same keywords or products or services to one set of audiences or locations now that doesn't mean that you don't have different campaigns targeting the same products and services or keywords you just want to make sure that you're

never targeting the same keyword to the same location to the same audiences with the same messaging the reason for why you don't want to do that is because that then takes away your ability to use those levers to increase the spend on the areas that are performing well and decrease the spend on the areas that are not performing well the way that I talk this through with different coaching clients or people that are part of my pay Community is if you could think that Google ads the goal is to have one campaign now that is

never really going to happen but if you have that as your starting point you need to then have a really good business case for why you're having extra campaign so every additional campaign you add you need to think about why am I adding this campaign and why can't I just include it in my current campaign some really valid reasons for having multiple campaigns are is that you've got different locations you want to have different budgets for different locations or it could be for different traffic volumes there are sometimes you might have some really low volume

keywords which lead to a product or service with a really really super high profit margin so it makes sense to break that lower volume product or service into a separate campaign so you can make sure that Google spend money on that low volume search term and then also too when it comes to results as I said you might have some product groups so different asset groups or ad groups which is just getting really really super high profit metrics but a really low spend once again may want to break that out to a separate campaign so

you can force Google to spend more money in those High performing areas and then finally it comes down to that you can add in automated bidding strategies and an automated bidding strategy is where you're really leveraging off Google's learning so all the data that it's got not only about your account and your conversion history but also about the user's search history so the person who's currently completing that search and you can leverage off that data so that you can see better results as I said at this level I don't want to go into too further

details to bidding strategies because we're going to have a full video on bidding strategies but I do just want to let you know that that is the other core factor that you can include within your Google ads account is by using automated bidding strategies like maximize conversions or maximize conversion value thank you for joining me it's been an absolute pleasure having you here now remember if you want to get access to my Google ads optimization checklist make sure you follow the link in the description below and if you want to make sure that you never

miss when I release these videos within the get Google ready playlist so that you know how to set up all of your campaigns and optimize your campaigns in the right way make sure that you don't subscribe but you turn on that Bell notification so you know when I release a new video thanks for joining me and I look forward to seeing you through the rest of these videos see you