Google isn’t a search company, it’s an online advertising company. Whenever you search for anything on Google, at the very top of the results are ads Google got paid to show. Below those, you get to the regular search listings.

For small businesses, paying for Google Ads can be a great way to reach customers. It’s the biggest advertising platform around. People searching see your ads at the moment they’re looking for what you offer. For example, if you run a pizza place in downtown Tampa and someone nearby searches “pizza delivery” on Google, you can get your menu in front of them right when they want it.

Of course, there’s a little bit more nuance to things than that. It’s just as easy to waste a few hundred dollars making uninformed buys on Google Ads as it is to use them to get customers through your doors. So, if you’re considering using them for your small business, here’s what you need to know.

What are Google Ads?

There are three main kinds of Google Ads: search ads, display ads and YouTube video ads.

Search ads appear at the top of Google Search results. Someone looks for pizza, they see an ad for a pizza place. They’re targeted based on the keywords that someone uses and, often, their location.

Display ads are the ones that you see on websites around the web. These are targeted at different groups and demographics. Google determines someone is the kind of person who likes pizza and, everywhere they go online, they start seeing ads for pizza places.

YouTube video ads are the ads you are forced to watch before most videos on YouTube. Like display ads, they’re targeted at certain people. If you ordered pizza recently, you might see more pizza ads on YouTube or ads for a national fast-food chain.

For small businesses, search ads are generally the most effective. These target customers the most directly and are what we’ll mainly be talking about in this article. (Display ads and YouTube ads are great for businesses that want to maintain or increase visibility, but are less likely to be valuable to small businesses with physical premises.)

How Google Ads work

Behind the scenes, every Google Search ad is a blind auction. Let’s keep going with this pizza place example. If there are three different local pizza places in Tampa all looking to advertise for the “pizza delivery” keywords, whoever is prepared to pay the most will get the top spot.

However, for most of the advertising campaigns you’re going to run, you don’t pay per “impression” when Google shows the ad. Instead, you pay when someone clicks on it. This is called cost per click, or CPC, advertising.

For our pizza places, a click means someone has taken action and called the order number in the ad—or at least clicked to see the menu on the website. That’s a pretty powerful ad, placing their pizza offerings right in front of a hungry customer.

Because every single ad placement is an auction, the pricing of Google Ads varies wildly. The minimum bid is $0.05, while the most expensive keywords (for industries like insurance and mortgage brokers and attorneys) can cost more than $50 per click. However, most keywords—even highly competitive ones—tend to yield results that make the price worthwhile. A pizza place might be prepared to pay Google $1 if someone calls them to place an order, but they’d be out of business pretty quickly if they started paying $20 a click.

Google gives advertisers total control over their ad spend. You can set a monthly budget, as well as a maximum price you’re prepared to pay for each CPC keyword. So, as long as you’re sensible, you don’t have to worry about accidentally bankrupting your business.

Getting started with Google Ads

Google Ads are easy to get up and running. It’s free to create an account and Google will match the first $150 you spend. For small businesses, this is a great deal that allows you to learn to use ads and test the waters.

Once you’ve signed up, check out Google’s helpful walkthroughs. The Google Ads manager is powerful and includes a lot of advanced features you’re unlikely to need, so things can get confusing if you try to muddle your way through it alone. Some major corporations spend hundreds of thousands of dollars a year on ads, so their needs are entirely different from yours.

A big part of using Google Ads is deciding how to target your potential customers. You have to work out what keywords they’re likely to use to search for what you offer. If you go with keywords that are too general, like “food Florida,” you’ll pay a higher CPC to reach less relevant customers. Go too niche, like “large pepperoni and peppers pizza downtown Tampa,” and there’ll be no one searching for your keywords.

Google, of course, doesn’t want businesses to waste their money because then they won’t buy more ads, so it provides a lot of tools to help you find the right keywords. Once you have a Google Ads account, The Keyword Planner is great for researching the search volume of different keywords and their average CPC. You can use it to find related keywords you might not have thought up (like “best pepperoni pie mobile”). At every step of the process, Google will give you an idea of what kind of results you can expect and at what cost. And it’ll let you know if your budget is too low to compete.

You also have to create your own ads. Each search ad displays three bits of text:

• A short headline (max length 30 characters)
• A slightly longer description (max length 90 characters)
• A website address

Depending on the ad type and your target audience, you can also show your location and phone number.

One of the most convenient things about Google Ads is you don’t need to be a marketing genius to get good results. Google encourages you to create multiple headlines and descriptions that it then shows randomly as people search. It’s a way to test which headlines are the most effective, which in turn helps you come up with more effective ads.

Some words of advice

Expect a return on your investment. Whatever amount of money you spend on Google Ads should result in at least that amount of profit. Of course, there’s always a bit of uncertainty, but if you start spending a few hundred dollars on ads, you can expect results.

Keep an eye on your clicks. Google Ads makes this easy to check. You’re able to see how many people have seen your ads, how many have clicked on them and how much you’ve paid for each click. Try them for a month or two and see how those clicks translate into sales or interest in your business.

Don’t expect instant results. Google claims that most businesses should see returns in a month or so, but it also depends how long it takes you to convert leads into sales. It’s better to start slow with a low budget than spend thousands right out of the gate.

Lean into the automation features Google offers. If you don’t want to spend hours tweaking everything, let Google Ads autobid on your chosen keywords. It can be set to maximize the number of clicks you get. If you’re worried about it spending too much, you can set an upper price limit.

Be flexible. Don’t be too committed to your headlines and descriptions. Try as many variations as you can think of and let Google sort the good from the bad. Upping the conversion rate of your ads is one of the easiest ways to get better value from them.

Check in with your ad campaigns regularly. Right from the start, you want to make it easy to monitor everything, so invest in a strong internet connection (fiber if you can get it) for your business and keep all your tech up to date. Google Ads may just be the start of bringing your business into a new era.

Do smart targeting. Use location limits if you have a physical premises. People might not drive 10 or 20 miles if they have other options closer to them, so serving them ads is a waste of your marketing budget.

Read and rely on Google’s support docs. The Google Ads help docs are an excellent resource if you get stuck. Alternatively, there are professionals who handle Google Ads campaigns. If your business responds well to your first few campaigns and you want to ramp things up, consider consulting one of them. It’s an investment that could pay off.