Much ado has been made about Google AdWords and how effective its pay-per-click (PPC) advertising system is for promoting nearly any business with a web presence, and for very good reason.
Google AdWords is a flexible marketing platform that can drastically increase leads and customers. A well-executed AdWords campaign can deliver enormous payoffs, with one company reportedly receiving an ROI of — we kid you not — 21,690 percent.
However, you also hear stories about failed campaigns that waste time and money, with literally thousands of dollars spent with nothing to show for it. Perhaps you’ve experienced that yourself.
Like any tool, you need to know how to use AdWords properly in order to see any kind of return. There is a bit of a learning curve involved, but we’re going to walk you through how to set up a successful campaign, complete with best practices to adopt and common pitfalls to avoid.
Getting started with Google AdWords
Starting an AdWords account is pretty easy. All you need to do is go to the Google AdWords website and click “Start Now.”
You’ll be asked to create a profile and set up a Google account (if you don’t have one already).
If you’re a first-time user, the system may go into Google AdWords Express mode and walk you through some quick steps on how to create the ad. You can do that now just to try it out, but if you want to create a more targeted campaign we suggest just switching over to the main Google AdWords interface.
Speaking of the interface, old-timers may find that Google AdWords has gotten a facelift. Google went back to the drawing board and updated its interface to accommodate the scads of features, reports, and settings that they’ve incorporated since AdWords’ launch 15 years ago.
The focus on the new Google AdWords interface is on visualizing the data from your campaigns for easier reading and analysis, and on making it easier for you to set up and manage your campaigns.
For those of you who don’t see the new UI, don’t worry. Google is still in the process of rolling it out to all users across 2016 and 2017, so if you don’t have it yet, you will soon.
So let’s get down to the good stuff.
How to create an effective Google AdWords campaign
Google makes it very easy to pick AdWords up and drive, but even driving a car needs some basic instruction — especially if you want to get anywhere without getting hurt.
Fortunately, we’re here riding shotgun to make sure your first campaign is done right.
Let’s review three simple but important steps for creating an effective AdWords campaign:
Step 1: Set a budget
AdWords works based on Cost per Click (CPC). In other words, you pay every time someone clicks your ad. The more people click on your ad, the more you spend. High-competition keywords cost a lot because other companies are vying for the same space.
To make sure you don’t break the bank on any keywords, you need to figure out your Max CPC. Your Max CPC is determined by your website conversion rate, your profit per sale, and your advertising profit margin. Here’s a formula that can help:
Max CPC = (profit per sale) x (1-profit margin) x (conversion rate)
If your average profit per sale is $100, and out of 500 visitors you convert 5 into customers, you have a 1% conversion rate. If you want an advertising profit margin of 30%, then this is how the Max CPC would calculate:
$100 x (1 – .30) x 1% = $0.70
So if your Max CPC is $0.70 and the keyword you want has a CPC of $3.50, you either have to look for another keyword or find a way to increase your profit per sale.
Even with a reasonable CPC, your AdWords spend can spiral out of control if left on its own. That’s why AdWords lets you set a daily budget to keep a lid on those costs. The ad stops displaying once you hit that daily limit.
Step 2: Do your research
Not all AdWords keywords are created equal. Just because you think people use a certain keyword to search for your products, doesn’t mean Google does.
Google’s Keyword Planner makes it simple for you to experiment with different keywords so that you can see what exactly your customers are searching for. It also shows you how much the CPC is, which you can use to judge whether you can afford the keyword or not.
You can also spy on other people’s keywords and see how it performs for them. If you find that a competitor is spending a lot more on a keyword that performs marginally better than a second keyword, then you’re better off bidding on the latter.
Step 3: Craft a powerful ad
Marketing with AdWords isn’t the same as traditional advertising. There’s little room for artistic flair or clever wordplay. Your ad messaging should be simple and direct to the point. Your call to action should be just as direct and no-nonsense. Tell the viewer exactly what you want him or her to do, whether it’s order, sign up, or buy.
Also, your AdWords ad is the perfect place to advertise great deals and discounts. Either provides an exclusive “one-time only” deal or advertise a seasonal sale on your targeted product.
Google also takes into account something called “Ad Rank.” This determines where your ad will show up on the page—if it shows up at all. The higher you rank, the more visible the ad. You can increase your ad’s rank by increasing its relevance, which is done by including the AdWords keyword you’re bidding for in the text of the ad itself and throughout your landing page.
Step 4: Remember to follow through
What happens after a user clicks your ad? Where do they go?
If they go to your homepage, they’ll have to stumble around the site looking for the item that the ad showed them. It increases the chance they’ll get frustrated and leave.
But successful AdWords campaigns almost always direct users to a landing page built for that specific ad. The landing page itself must be built with a single, easy-to-understand message and a single call to action. By eliminating every other possible distraction, you increase the chance of your prospect converting or purchasing. And this, my friend, makes the money flow faster.
What common Google AdWords mistakes should I avoid?
So now that you know the Do’s of how to set up a campaign, let’s get into the Don’ts.
Don’t misuse keyword matches
AdWords gives you three types of keywords:
- Broad match: Ads will show if the keywords are used in the search, no matter what order they’re in.
- Phrase match: Ads will show if the search contains the entire keyword phrase. Unlike broad match, phrase match keywords won’t show if keywords are placed out of order.
- Exact match: The ad will only show if someone types in the keyword phrase exactly.
Businesses that start with broad matches first may find that their ad appears too often for searches that aren’t really relevant. It increases their ad spend to no benefit.
On the other hand, businesses that use phrase or exact matches have higher conversion rates, but show up far less often.
Test your keyword performance to see which mix of broad, phrase, and exact matches work best for your ad.
Don’t lump all your keywords in a single group
This rookie mistake basically involves throwing all of your keywords into a single pile so that you end up showing everyone the same ad, regardless of whether or not they’re your ideal audience.
Google AdWords lets you group keywords by campaign, so that you can create truly targeted ads that focus on keywords that have the highest chance of converting.
Don’t forget negative keywords
Businesses need to be picky about their customers, and marketers need to be picky about their search terms.
For example, if you sell brand new cars and don’t sell used ones, you wouldn’t want your ad to show up for people looking for used vehicles. You would then add the negative keyword “-used” to your ad group.
How can I get the most out of my Google Adwords budget?
Keep in mind that an AdWords campaign is just that — a campaign. A long-term effort that needs loving attention. It’s not a set-it-and-forget-it marketing tool.
In order to get the most out of your ad spend, you need to constantly be monitoring your AdWords performance for trends and correcting when necessary.
Measure your ROI
How can you tell if your AdWords ad is making you money if you don’t have a way to track it?
You need a system to determine whether or not the people clicking on your ad are turning into paying customers. Fortunately, Google makes this easy for you by letting you set up either Google Analytics goals on your site, or conversion tracking via AdWords.
You can also connect your AdWords campaigns to your marketing automation system or CRM.
Tweak your keyword bids
After running your PPC campaigns for a while you’ll start to get a sense of which keywords are performing and which aren’t. Take a look at your cost per conversion on your keywords. You’ll want to increase the budget for those keywords that are converting at a low cost, so that you can rank higher for those keywords. Then reduce or remove the budget of those keywords that aren’t pulling their weight.
A/B test everything
Simply moving a button or changing a single word can have tremendous effects on your campaign’s performance.
Constantly experiment with your AdWords ad and landing page and refine them based on the results. You may stumble on a variant that doubles or even triples your conversions.
In conclusion
Google AdWords requires study, testing, and experimentation before it can reliably provide a decent return on investment. But rest assured the payoff is more than worth it.
By perfecting your AdWords campaigns, you’ll be able to extend the reach of your site (and brand) and draw in the right kinds of customers—those that are actively interested in the goods you’re selling and have the intent to buy.
Ready to start tracking your campaigns? Download the Ultimate UTM Codes and URL Builder Template now to learn how!