You’ve heard of AdWords. You know it can be an amazing way to promote your company, event, product or service. You know it can offer a great ROI for your marketing dollars. You also know it can end up costing a lot if you don’t know what you’re doing.
We get it. For beginners, AdWords seems like a complicated playground, full of unfamiliar terms and complicated dimensions and data. But - when used properly, it can provide incredible ROI. And unlike SEO or content strategies (which are also important!), AdWords gives you immediate action!
AdWords can provide incredible ROI & immediate action!
While our Kelowna AdWords agency generally likes to post about advanced bidding tactics and strategies, we still work with many people who are new to online advertising and are simply wondering “Does Google AdWords Work?”. If you’re one of the many asking that question, this post is for you. Read on as we’ll cover everything you need to know to develop a quick understanding of the AdWords platform and how it works.
AdWords is basically an advertising service run by Google that matches ads to users’ search queries. Bing and Facebook also offer online advertising services, but Google is still king of the digital hill.
There are three pricing models for Google AdWords: CPC, CPA, or CPM
Cost per click (CPC) means that you will be charged the bid amount when someone clicks on the ad.
Cost per acquisition (CPA) means you only pay when someone makes a purchase.
Cost per thousand (CPM) means you pay when your ad has made 1000 impressions.
The pricing is based on an auction system where your business can bid on each keyword, and the bid amount will vary according to quality score and the demand for the keyword.
The service provides a platform where a business can create a text advertisement that contains keywords that relate to the product or service. When a searcher types those keywords into the search engine, the ads that correspond to the search term will be shown. The price of keywords vary dramatically.
Data from search engine watch revealed that the most expensive keyword in 2016 the US was $935.71 for the term ‘best mesothelioma lawyer’. These keywords were expensive because the bidding lawyers knew that anyone looking for such a specific term is most likely a highly qualified lead, and because the lawsuits for mesothelioma cases generally pay the clients a large sum in compensation, the return on this investment is high.
Google makes 97% of its revenue from online pay-per-click (PPC) advertising and with bid costs as high as this, it’s easy to see why.
On average, the highest bids are around $50 and are related to the legal and insurance industries. However, usually the bid for keywords is much, much less, between $1 and $5.
Setting up your Google AdWords account follows four basic steps.
(1) Sign in to Google AdWords, and
(2) Select your campaign type and give it a name.
Campaign types allow you to set where your ads will be shown; this includes the Search Network with Display Select, Search Network only, Display Network only. The search network places your ad on the search engine results page; the display network, places your ad on a huge network of websites relevant to your keywords or targeting options.
You can set up as many or as few campaigns as necessary. For example, if you sell office supplies, you may want to set up a campaign for specific products, one for end-of-season sales, and one for store locations.
(3) You choose the geographic location where you’d like ads to be shown, and
(4) You will be asked to choose a bid strategy and set a daily budget.
Then you can move on to bidding on keywords and building ad groups.
Google determines how much a keyword costs by two factors: how much you bid, and your ad rank.
Your ad rank is based on:
Generally, a higher ad rank can help lower the bid cost. This is an effort by Google to eliminate low quality, spammy ads that offer a poor user experience. Businesses who have high-quality ad campaigns will be rewarded with lower bid costs and better ad placement.
It’s easy to manage your AdWords budget. You can simply set a daily budget, but first you should figure out how much you want to spend on each conversion.
While conversion rates greatly vary across industries, as an example, let’s say the average conversion rate of your leads lies around 5%. A budget of $1000 per month would produce 50 leads at a cost of $20 per lead.
To make the most of your budget, there are several features that allow you to target your buyers with precision, such as:
You can also improve the performance of the ads with different bidding strategies. You can set your AdWords campaign to manual CPC to maintain control over the bid amounts, or you can set it to automatic CPC, which will enable Google to adjust the bid amount for maximum efficacy.
Once the daily budget limit has been reached, Google will stop showing the ads.
Once you have a list of keywords, you will need to organize them into ad groups.
An ad group contains one or more ads that use a shared set of keywords. Each ad group should have between 10 - 20 keywords and longtail keyword phrases that your customers use to search for your product or service.
For example, let’s say your business is a shoe store. One ad group could focus on boots with keywords that target types of boots, one could target shoes, one could target sandals, and one could target your own brand name. Keywords can target color, style, women’s, men’s and so on. You can also create ad groups that focus on different levels of the sales funnel.
A great feature of AdWords is the ability to streamline keywords into match types. This will help align your keywords with search terms.
There are four match types: broad match, modified broad match, phrase match and exact match.
By creating ad groups you will be able to monitor the best performing ads, and at anytime you can pause ads that are performing poorly.
These are the basics that you need to know to get started on AdWords. The next step in this process is to write attention-grabbing copy with enticing calls to action.
Then you can sit back and watch the results roll in.