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    How Google Ads works, explained with diagrams

    The auction behind every search, the quality score that sets the price, and what to really measure. Six diagrams, one for each piece.

    2026-10-15·7 min read·Google Ads·POSTEP Digital

    every search is an auction · bid × quality decides the winner · you pay for the click, not the impression · it only pays off if the sale goes back to Google

    // 02

    Who wins the auction: not just whoever pays more

    If the highest payer always won, only big companies would advertise. Google multiplies your bid (the most you'll pay per click) by your ad's quality score. A highly relevant ad beats a pricier one — and still pays less.

    diagram 02
    Paying more doesn't always win
    pool repair curitiba
    Advertiser A
    2nd place
    pays a lot, generic ad
    max bid
    R$ 5.00
    ×
    quality
    4
    =
    points
    20
    Advertiser B
    1st place
    pays less, spot-on ad
    max bid
    R$ 3.00
    ×
    quality
    9
    =
    points
    27
    pays per click just enough to beat the one below:≈ R$ 2.23not the R$ 3.00 it was willing to pay
    Points are bid × quality score. B scores 27 against A's 20 while offering less money.
    Simplified math: Google also weighs ad format and search context. The principle holds — relevance buys a discount.
    Diagram 2: two advertisers competing for the same search; the one who pays less but has a higher quality score ranks first and pays less per click.

    → Nobody pays the bid they set: you pay just enough to pass whoever is right below. The better the score, the smaller that amount.

    // 03

    The quality score, in three questions

    The score runs from 1 to 10 and looks like magic, but it boils down to three questions Google asks about your ad. Two depend on how you write; the third depends on your site.

    diagram 03
    Where the quality score comes from (1 to 10)
    Question 1
    Do people click?
    expected click rate, based on the history of similar ads
    Question 2
    Does the ad answer the search?
    someone looking for “repair” reads “repair”, not “pool solutions”
    Question 3
    Does the page keep the promise?
    loads fast, on mobile, and talks about what the ad talked about
    the three grades become one
    Result
    Score from 1 to 10
    high score = better position for less money
    The third question is the one most people forget: the ad is only the door. Sending the click to a slow or generic page drags the score down — and you pay more for every visit.
    Diagram 3: the three questions that form the quality score: click chance, ad relevance to the search, and landing page experience.
    // 04

    How an account is organized

    Account, campaigns, ad groups, ads. The structure looks like bureaucracy, but it's what keeps the ad talking about the same thing the person typed — and that's what holds up the score from the previous step.

    diagram 04
    How a Google Ads account is organized
    Level 1
    Account
    your business, with the payment method
    holds several
    Level 2 · sets the money
    Campaigns
    daily budget, region and goal. E.g. “Repair — Curitiba”
    each one has
    Level 3 · sets the topic
    Ad groups
    one topic only. E.g. “vinyl pool leak”
    and inside each group
    Keywords
    What the person types
    “vinyl pool leak”, “leaking pool”
    Ads
    What the person reads
    headlines and descriptions echoing the group's topic
    The golden rule: one group, one topic. Mixing “repair” and “construction” in the same group forces the ad to talk about everything — and answer no one.
    Diagram 4: the hierarchy of a Google Ads account: account, campaigns that set budget and region, ad groups that set the topic, and inside them keywords and ads.
    // 05

    Keywords: what to buy and what to block

    A keyword is the topic you accept to show up for. The costliest mistake is leaving it too loose: the ad appears on searches that have nothing to do with you, and you pay for every click from people who were never going to buy.

    diagram 05
    Keywords: how close the search needs to be
    Broad
    pool repair
    also on similar searches, like “pool renovation” or “fiberglass pool”
    Phrase
    “pool repair”
    when the search contains that idea: “pool repair in curitiba”
    Exact
    [pool repair]
    only that search, or very close variations of it
    Negative keywords: what you refuse to pay for
    searches that block the ad, even when they contain your keyword
    freejobscoursehow to
    Start with phrase or exact. Broad only makes sense with budget to be wrong — and it's where most money burns on curious clicks.
    Check the search terms report every week: it shows what people really typed. Every useless term you find becomes a negative keyword.
    Diagram 5: the three keyword match types, broad, phrase and exact, and the list of negative keywords that block unwanted searches.
    // 06

    Measure for real: the click isn't the end

    The Google Ads dashboard shows clicks, cost per click and conversions. But the real sale happens later, in your CRM, where it can't see. Until the sale goes back to Google, it optimizes for what it can see: cheap clicks.

    diagram 06
    From click to sale: where Google can see
    Stage 1
    Click on the ad
    Google always sees this stage
    the person messages on WhatsApp, fills a form, calls
    Stage 2
    Contact
    Google sees it if a tag on the site is measuring
    the negotiation happens in the CRM
    Stage 3
    Closed sale
    happens far from Google — by default it never finds out
    only if someone tells it
    What Google learns
    To find buyers, not just clickers
    reporting the sale teaches the system to look for people like your customers
    Without the sale reported back, Google optimizes for cheap clicks. And a cheap click isn't always a customer: it can be a curious visitor, a competitor or a student.
    The fix is sending the sale back (offline conversion). That's what we do by wiring the CRM to Google Ads — see how we run paid media.
    Diagram 6: the path from click to sale; Google sees the click and the contact, but the sale closed in the CRM only reaches it if sent back, which teaches it to look for buyers.

    → This gap is what made us wire CRM and ads together for our clients. For the technical side, the CAPI and GTM post covers the Meta equivalent.

    // 07

    Where to start, in order

    The order that avoids burning the budget in the first weeks.

    1

    Define what counts as a result: a WhatsApp contact, a quote request, a phone call. Without that, nothing is measurable.

    2

    Start small: one campaign, a few ad groups, each with a single topic and keywords in phrase or exact match.

    3

    Write the ad with the same words the person typed, and send the click to a page that talks about exactly that.

    4

    Add the obvious negative keywords before switching on (free, jobs, course). Then check the search terms every week.

    5

    Wait for data before tweaking: in the first weeks the system is learning. Changing everything every day resets that learning.

    6

    Once sales are tied to the ads, judge by cost per sale, not cost per click.

    the whole thing in short

    Google Ads is an auction for the attention of people already searching. Whoever answers the search best wins, not whoever shouts loudest — and it only pays off when the sale makes its way back to the system.

    // 08

    Frequently asked questions about Google Ads

    How much does Google Ads cost?

    You set a daily budget and pay only when someone clicks your ad. Google charges no monthly fee. The price of each click varies with the competition for the keyword and the ad's quality score.

    Does paying more guarantee first place?

    No. Position comes from your bid multiplied by your quality score. A more relevant ad can rank above one offering more money and still pay less per click.

    How long until Google Ads works?

    The first clicks arrive within hours, but the system needs a few weeks of data to learn what works. Judging the campaign in the first days, or changing everything daily, usually backfires.

    Google Ads or Meta ads: which one?

    Google captures people already searching for something right now. Meta introduces the business to people who weren't looking. For immediate sales, search usually converts faster; to create demand, Meta helps. Many businesses use both.

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    POSTEP Digital
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