The Cost-Per-Click model
As previously mentioned, Google Ads are based on keywords and that’s how the pricing model is arranged. Your company or marketing agency will target a specific keyword, one that usually is popular with other agencies and companies, and you have to compete for that keyword with a bidding. Your bid is the maximum rate you’re willing to pay for that key word. Google’s algorithm will have its own estimate about the rating and accept or decline your maximum bid. If you’re successful, you gain a placement in one of the Google Ad spots on search results pages. Now that your page is placed for customers to notice you, you’ll pay for every time they click on the advertised link. This cost-per-click amount also includes something Google charges you for, commonly explained as the quality of the ad, with a quality score. Quality is judged by Google’s specific criteria, explained here, but the higher the quality score, the less you’ll have to spend. Your maximum bid amount coupled with your quality score both equals to how much you’ll pay per click but also determines how high and where your ad will rank on the results page.