Are you making the most of AdWords?

A successful AdWords campaign can be a game-changer for a business, but it must be considered in terms of customer spending rather than clicking.

While the amount spent on the campaign will be dependent on the cost per click (CPC) and click through rate (CTR), the success is ultimately determined by the income or conversion it yields.

Think of it like this – does a cycling shop judge its success by how many customers walk through its doors? No, it’s how many of those customers then pedal out on a shiny new bike, and ultimately how much profit that drives.

It’s great to get those customers in, and it’s great that they know the store’s there, but that won’t pay the rent, buy stock or cover wages. Check out these 7 tips to make the most of AdWords in a way which drives true profits not just traffic:

1. What is Adwords?

AdWords is an advertising service by Google for businesses and other organisations who are willing to pay for their website to appear in search engine results. It allows those companies to bypass alternatives that have moved up the rankings organically. Advertisers bid on keywords through an auction which determines the CPC rate, and then pay Google each time their ad is clicked.

2. How is it useful?

AdWords works for multinationals that want to reach out to billions of consumers worldwide and can also help smaller businesses target local shoppers. It does cost, though, and the most sought after keywords will be the most expensive. It is useful for companies and organisations that are happy to spend money on marketing and those that are looking for quick returns and perhaps don’t want to wait to improve their Google rankings over the long term through, for example, content creation.

3. Which words should I pick?

This is based on customer demand, so look at search volume related to the business’ services and products through Google AdWords Keyword Suggestion Tool (https://adwords.google.com/select/KeywordToolExternal). Simply enter in phrases and words that the business’ customers are most likely searching, and Google reveals other similar, relevant phrases. If it’s a company that’s selling cycling holidays, those two words would be a good start, as would ‘bike holidays’ and ‘cycling France’. It’s also possible to select advanced options such as Language and Location.

4. A wider plan

AdWords, like any other facet of marketing, should not be used in isolation. Marketing is about the whole story, where each channel, including AdWords, newsletters, and display advertising, has its own role to play. Any AdWords campaign can only be successful if it is run in tandem with the business or organisation itself. The campaign should be formulated following full disclosure of matters such as special offers or new stock.

5. Be prepared

Gather as much information as possible ahead of launching an AdWords campaign. This should include access to existing analytics and a marketing calendar. It’s important that the role of the campaign is agreed by all parties, particularly as to whether it is seen as being a general sales drive or targeted at one particular area.

6. Do the math(s)

Ultimately, the cost of an AdWords campaign comes down to the price of the keywords bought and how many times they are clicked. To make sure it will be profitable, the organisation must assess existing customer conversion rate, profit per customer and target advertising profit margin. This will generate a Maximum CPC figure – the amount it can afford to pay for a keyword and make money on the campaign. Put simply:

Maximum CPC (£) = (average profit per customer x target campaign margin) x customer conversion rate %

If the company’s Maximum CPC is £5 and the AdWords Estimated CPC of a keyword is £4 it makes sense to buy that keyword. If the Estimated CPC is £6, the campaign will most likely lose money. Simples!

7. Analysing results

For profit-based organisations, AdWords should only be measured in terms of income or conversions, as other types of goals are too easily manipulated and abstract. Conversion tracking, which can be set up through Google when the campaign is created, is a method of measuring sales generated by the AdWords campaign.

Are you making the most of your Google Adwords budget? Get in touch for our free advice.