ONLINE ADS 101
what are paid search ads? When you search for anything in Google, Bing or Yahoo you see both “paid” and “organic” listings. Here’s what they look like in a recent search for “insurance” on Google:
Google has a very complicated algorithm that determines the first organic listing. In short, the first organic result the page that Google believes is the best fit for you and your search. However, the paid ads are placed as part of a Google Adwords program in place by the insurance company. The insurance company is advertising for the keyword “insurance.” The insurance company is billed every time someone clicks on one of the paid ads. In other words, they are charged a cost per click (CPC) for each ad.
In short, these ads work on a bidding platform. The higher the bid, the higher the paid ad costs. The more competitive a term is, the higher the CPC. For example, the “insurance” keyword is running about $12.50 a click. For prospective, the keyword “advertising agency” is about $6.00 a click. The advertisers can target a large number of additions variables:
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Time of day Geographic location Device (mobile/tablet/desktop) Languages Many more.
Google is constantly improving their Adwords program, to deliver more relevant ads to each customer. Google also takes the following variables into consideration as to what ad shows up (and the order): • “Quality Score” - this is simply how good of a match Google thinks your content is to the keyword. You could buy the keyword “insurance,” but send the customer to your advertising agency. Google is smarter than we give them credit for. They know that “insurance” isn’t very relevant to an advertising agency. Google will be less likely to show your ad. • You - Google has a pretty good idea of who you are. Google collects all of the information about how you search to try and offer better ads for you. They know your geographic location, search trends and even social interactions (with Google Plus). Keep reading to learn more about Google Adwords. *I’ll be using Google Adwords in this eBook, simply because Adwords has turned into the kleenex of online advertising. If I need to address a different service, I’ll make sure I address it explicitly.
Google is smarter than we give them credit for
Why Do I need Google Adwords? People are looking for your product or service. You need to be appear when people are looking for you. It’s that simple. Search engines are the roads that direct traffic on the internet. Do you want an offramp exit right in front of you office? Of course, but that isn’t always free. Location, location, location. In real estate, it was all about location. Online, it’s no different. The location is just where you are listed in Google, Bing or Yahoo. Unless you are a brand new product or brand new service that no one has ever heard of (and you have no close competition), people are searching. People search for everything: health care, pens, electronics, cars, the list goes on. Here’s a quick look at what people searched for last year: http://www.youtube.com/watch?v=xY_MUB8adEQ
what? What works best in Google Adwords? There are a lot of different products and services that are great for Adwords. However, the most successful are more direct-response oriented. In the marketing world, we call say these customers have a “high purchase intent.” These customers can be easily measured because they typically make the purchase the same day. Other items that have a longer sales cycle (for example, Advertising Agencies no one wakes up, decides they want an advertising agency and want to hire one right now) can still utilize Adwords, but it’s more difficult to track. If someone clicks on an ad and hires you six months later, there is no elegant way to track it (you can always ask the customer, but that isn’t always reliable).
Can I do search marketing ads on my own? The short answer is yes. Everyone in marketing should understand the basics of search engine marketing ads, to at least be able to make educated decisions. There is a lot of free knowledge online and through Google. However, I haven’t met a business owner who has started doing Adwords (or something similar) and continued to run the program. Business owners typically find they don’t know what to test or change, don’t have the time to constantly look at results and realize they are in over their heads. It’s not that these business people couldn’t fully use the potential, it’s the simple fact that managing Google ads is a very specialized and time-intensive practice. Without devoting the time to management, you’ll find that your budget is gone and you don’t have anything for show for it.
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The Google Adwords Secret It all comes down to math. Let’s just get our calculators dusted off. Let’s take a pretend business that sells widget x. Keyword: Widget X CPC for “Widget X”: $1 Average clicks per day: 10 Conversion Rate (number of people who come to the site and purchase the product, in this case): 5% Profit from each sale of Widget X: $10 Let’s do the math: Cost: $10/day = $300/month = 300 clicks Conversions/month (at 5%) = 15 Profit = $150 YIKES! We spent $300 to make $150! Not a great business model (unless you’re the government). Here’s the secret to Google Adwords: you have to make the math work. Have no fear, all is not lost with the fictional widget maker. We can change any one of these variables to make it a much more viable option for the company. Here are a few: • One thing we didn’t count on is the average lifetime value of a customer. Let’s say the average customer buys one widget X a month from us. So, our profit would jump to $1,800 from our original $300 investment. Bueno! • Let’s say we can do a better job with the landing page, the page visitors land on when they click the ad. Changing this page can make a huge difference. Let’s say we can increase that to a 10% conversion rate = 30 widgets sold = $300. We’ll brake even. If we can even sale 2 widgets/year to the customer, it’s been worth it. • What if we could find a way to get a lower CPC? There are some creative ways to lower your CPC, including finding undiscovered, undervalued keywords. For example, instead of buying “widget x” you find less competition on “best widget.” If that keyword costs $0.50, it would cost you $150 to make $150. You can quickly see how being able to improve any of these variables can greatly make or break a campaign. It is, literally, the difference between profitability and losing money.
My customer never clicks on paid ads!!! We’ve heard it a million times, “No one clicks on those paid ads…I just skip them because I know they are paid…” If you know of someone that clicked on an ad, it’s because it was an accident, or they will fooled or they just wanted to charge the company advertising. After all, no one clicks on ads…right? I have three words for you: you are wrong. Study after study shows that people of all ages, races, socioeconomic levels and geographic locations click on these ads (((INSERT SOURCE))). The truth is, Google made over $50 billion in revenue last year (http://investor. google.com/financial/tables.html). 87 percent of their revenue was from advertising - $43.68 billion dollars. That’s a lot of “no one” clicking on ads. In looking at my own searching habits, I regularly click on the paid ads, without even thinking about it. A recent heat mapping study of where users moved their mouse showed users are frequently exploring the areas where ads usually appear:
People don’t like to admit that they click on ads. Psychologically, we like to think that humans are above advertising. We’re better than that. We’re going not going to let companies tell us what to do. But advertising works. It’s all about having the right message in the right place in the right time. Google Adwords allows us to place the right ad (message), when someone is searching for it (place), when they are ready to buy (time).
Do’s and Don’ts of Search Advertising
• Think like a human. Ask what you would type into Google to find your product or service.
• Set up goals. Know what you’re trying to accomplish. • Measure. Make sure you have the correct tracking installed to make sure you can measure ROI.
• Make sure you can manage the campaigns. Making your campaign successful will take more time than you think.
• Try new things. Testing new ad and keywords are easy and not very expensive. Try things that your competition isn’t trying.
• Ask for help. Google Adwords now offers free telephone support (and they are nice, too!), don’t hesitate to call.
• Be patient. Don’t try to eat the whole Adwords elephant at once.
• Think that Adwords will solve all your problems. Adwords is a great tool in your toolbox.
• Send traffic to your homepage. If you know what people are searching for, you should never send them to the homepage of your site.
• Think you can outsource it to someone for $2/hour. There’s a time and place for outsourcing but carefully consider the implications.
• Set it and forget it. Adwords can be your biggest income source or your biggest money pit. Make sure you check it.
• Hold on to under-performing keywords. Even if you think it’s “right” make sure you focus on the high performing keywords.
• Forget to connect Google Adwords and Google Analytics. This is crucial for measuring performance.
• Freak out. It take about three months of adjusting campaigns for everything to level out and test properly.
Our tips and tricks to paid online search ads.