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What is Google Ads, and how do you advertise on Google?

Where your ad appears, how much you pay, and the setup step by step from creating an account to going live.

In short

  1. Google Ads is Google's advertising programme; your ad can appear on Google Search, Maps, YouTube and other Google sites.
  2. A separate auction runs for each search; the highest bid does not always win, because the quality of the ad and the page also counts.
  3. You set the budget; in a month you won't pay more than 30.4 times your average daily budget.

What is Google Ads?

Google Ads is the programme that lets businesses run paid ads on Google. When someone searches for your service, your ad can appear in the search results, labelled as an ad. The difference from SEO: visibility starts immediately, but it stops the moment you pause the ads.

Of Google's campaign types, the ones most relevant to a local business:

  • Search: text ads for people searching for your service on Google. The first choice for customers who want to call or get directions.
  • Display: image ads on websites and apps; mostly for awareness.
  • Video: video ads on YouTube.

Where will your ad appear?

Google runs a separate auction for each search and gives each ad an "Ad Rank". According to Google, it is determined by:

  • your bid (the most you are willing to pay for a click),
  • the quality of your ad and of the page that opens when it is clicked,
  • the minimum threshold for that search and the competing ads,
  • the context of the search: location, device, time, search terms,
  • the expected impact of assets such as a phone number, address or extra links.

So with a better ad and page you can appear higher with a lower bid. An ad below the threshold is not shown at all.

How much do you pay?

  • Per click: in most campaigns you pay only when someone clicks, and usually less than your maximum bid.
  • Daily limit: on a single day, spend can reach up to 2 times your average daily budget, but no more.
  • Monthly limit: in a month you won't pay more than 30.4 times your average daily budget.
  • You control the budget: you can change your daily budget at any time.

Step by step: how to advertise on Google

  1. Create an account: sign up at ads.google.com with your Google Account; enter your business name and website address.
  2. Choose your goal: for example more phone calls or website visits. Google guides the setup based on this goal.
  3. Choose the campaign type: for a local business, usually Search.
  4. Set the location: only the city or district you serve, or a radius around you.
  5. Choose keywords: the words your customers will type. Keyword Planner shows estimated search volume.
  6. Write the ad: a Search ad takes up to 15 headlines (30 characters each) and 4 descriptions (90 characters each); Google combines and tests them.
  7. Enter the bid strategy and daily budget.
  8. Add billing details: country, time zone (hard to change later), payments profile (organisation or individual) and card or bank details.
  9. Set up conversion tracking: before going live, make sure calls, forms and WhatsApp clicks are counted. You can't improve an ad you don't measure.

During setup you will see two modes: Smart Mode leaves most settings to Google; Expert Mode gives full control over keywords, bids and targeting.

Watch out for

  • Keep the location narrow: only where you serve. A wide location spends the budget on people who can't choose you.
  • Don't raise the budget without conversion tracking; you won't know which click brought a customer.
  • If you work with an agency, the management fee and the ad budget paid to Google are separate; make sure you own the account.

Sources

The information was taken from Google's own pages on the date below and may change.

Published 21 October 2026

raxads sets up and manages Google Ads campaigns for local businesses, in an account you own. See Google Ads management and pricing.