Google AdWords marketing is a mystery to many.
It is important to understand the fundamentals of an AdWords campaign to derive maximum mileage from it. This helps in managing a robust campaign and maximizing the ROI.
Google AdWords is the most popular Pay Per Click management program. It is highly rewarding and can help you drive highly targeted traffic to your website or blog and is often termed as ‘paid search’ campaign.
Companies that offer Professional SEO services would always insist on a ‘paid search campaign’ to derive the maximum ROI out of your search engine optimizing campaign.
While launching a new campaign is an exhilarating process, most people have vague knowledge about how it works.
If you aren’t guided by sound knowledge about running an ad campaign, you would see thousands of dollars go down the drain without any success.
Here in this write-up we shall try and demystify Google AdWords to ensure you stay ahead of the competition.
What is Pay Per Click?
It is a simple methodology of advertising wherein an advertiser pays for each click that is received through the search engines and other partner sites.
This model of advertising allows small business irrespective of their budget to advertise and compete with their giant rivals.
In this model you will be able to bid for ad placement in a search engine’s sponsored links or partner websites and attract users who are searching for related things on the search engines.
For instance when a user searches for ‘Flights between New York and London’, an airline that has bid for similar keywords and operates on the route would show up in the sponsored links section.
Advantages of Google AdWords
➣ Fair Pricing: You would pay only when someone clicks on your advertisement and you can have a clear idea on where your money is going and what benefits are your adspend earning you.
➣ Budget Control: You have complete control over the budget of your campaign. You can set daily cap on your budget and modify it whenever you want.
➣ Reach Target Users: The right selection of keywords allows you to reach out to your target audience. This improves the conversion rates and also increases your profits.
➣ Online Visibility: PPC allows you to reach out to those quarters that remain untouched by other online marketing techniques. This improves your online visibility.
➣ Quick Results: Unlike other organic search optimization techniques, PPC shows instant results and helps in earning dividends quickly.
➣ Test Opportunities: AdWords campaign allows you to test the different opportunities that exist in the market which can be used for your other online marketing campaigns.
Terms & Terminology You Should Know
➣ Ad Extensions: These are nothing but incentives that attract the users and increase clicks on your ads. You can use things such as business addresses, phone numbers, additional site links, or specific product/service information as your ad extension.
➣ Ad Position: It is nothing but the order in which the ads appear on the search engine or a page. If the ad position is No. 1 it signifies that the ad is the first ad on a page. It however doesn’t necessarily translate to the ad being on the top of the organic results.
➣ Ad Rank: It is different from Ad Position in terms that it is the value that determines the position of the ad behind the scenes. This is determined on the basis of your bid and the Quality Score.
➣ Quality Score: It is the estimate of the quality of your ads. There are four main components that determine the quality score of your ad and these include click through rate, ad relevance, ad extension and landing page experience and ad format.
➣ Click Through Rate: CTR as it is popularly called is the ratio how often users who see your ad end up clicking it. This is one of the basics to determine the performance of the ads on the platform.
CTR = Clicks/Impressions x 100%
➣ Ad Types: There are a number of options that Google offers you and these include text ads in the search engines, desktops and mobile phones. Apart from this one can also opt for text or image ads on Google Display Network (GDN), product-listing ads, display and in-stream video ads on YouTube.
➣ Ad Group: When you have similar keywords, you need to group them together in what is known as Ad Groups. As a practice you shouldn’t have more than 15 to 20 keywords in a group and having multiple groups eases campaign management and tracking their success.
➣ Ad Rotation: This is the preference that you define for the ads in your ad group that shows different ads when you have multiple ads active. Getting the Ad Rotation formula right ensures that you create a proper balance between the different ads in your group.
➣ Ad Scheduling: With this option you are able to specify the hours and days when you want your ads to appear for the search queries. This is beneficial when you are targeting a certain geography or time zone. You can also specify the bids for different time zones.
How The Ad Rank is Determined?
Google follows a simple formula for ranking your Advertisement. It moves beyond the concept of the simple auction where the highest bidder wins the top rank. The ranking is factored around Maximum Bid and Quality Score.
Ad Rank = Maximum Bid x Quality Score
This system prevents the highest bidder from earning the top rank and allows the small bidders to earn high rankings when their ads are more relevant to the users. Let’s take an example
| Advertisers | Max Bid | Quality Score | Ad Rank | Position |
| Advertiser 1 | $1 | 10 | 10 | 1 |
| Advertiser 2 | $2 | 3 | 6 | 3 |
| Advertiser 3 | $3 | 3 | 9 | 2 |
| Advertiser 4 | $4 | 1 | 4 | – |
How Much Do Advertisers Pay?
The cost of the advertisement is also based on an innovative formula. Here the advertiser needs to pay only the amount that would beat the competition.
Ad Cost = Ad Rank of Advertiser Below / Quality Score + $0.01
Here too the advertiser with a higher quality score actually pays even lesser than what they had bid for. Let us continue with the same example as we had seen above.
| Advertisers | Max Bid | Quality Score | Ad Rank | Ad Cost | Actual CPC |
| Advertiser 1 | $1 | 10 | 10 | 6/10+0.01 | $0.61 |
| Advertiser 2 | $2 | 3 | 6 | 9/3+0.01 | $3.01 |
| Advertiser 3 | $3 | 3 | 9 | 3/4 +0.01 | $0.76 |
| Advertiser 4 | $4 | 1 | 4 | Highest Bid |
How Much Should I Spend?
This is one thing that can perplex most businesses and individuals who are planning to start with an AdWords campaign.
In theory there is no minimum cap for a campaign but in reality, you need to ask yourself a potent question, how successful should be my campaign?
To make the most out of your campaign make a small start, iterate for some time and then expand.
After a few weeks or month you should target a daily adspend of $50 or more as below this you won’t be able to beat the competition and neither earn eyeballs to see any noticeable improvements in your conversion or revenue.
The problem with small budgets is that the moment you gather the steam, you would find the campaign fizzing out. Just to draw an analogy, you won’t get into a race track with a quarter tank of fuel and the same logic applies to your AdWords campaign.
Types of Keywords
The success of a campaign relies on four sets of keywords. Each of these has a role to play and should be used in collaboration.
➣ Relevant: Your first set of keywords are ones that are most relevant to your campaign. These keywords allow you to achieve high click-through rate and help in achieving your niche goals.
➣ Far-Reaching: Apart from using relevant keywords, you also need to choose a few long tail key phrases that are less common. These are less competitive and are less expensive too and hence deliver strong
➣ Expansive: PPC is an ongoing proves and hence you will have to constantly expand your campaigns and expand your keyword list. While choosing your set of keywords, you should always keep your eyes open for new opportunities.
➣ Negative Keywords: It is important to block the negative keywords that help you stop irrelevant searches from triggering your ads. For instance if you are selling ‘looking glasses’, you would like to prevent someone looking for wine glasses from clicking your ad wasting your adspend.
#1 Understand Customer Demand
Thorough knowledge of the customer demand is stepping stone towards success in PPC campaign.
If you are targeting keywords that your potential customers don’t search you would see all your adspend get flushed down the drain.
So before you start a passionate campaign, it’s advisable you know what your potential customers are looking for.
Google AdWords Keyword Planner is a good starting point. From searching for keywords and ad group ideas to getting historical statistics and even foreseeing keyword performance, you can do a lot here.
#2 Learn From Competitors
Your competitors have toiled for days to find the right keywords and phrases that yield returns.
What if you could get a sneak peek into their research and know which keywords and landing pages work and vice versa?
You neither need to plant a mole in their organization nor hack into their systems.
Keyword Spy does it for you. Sign up for free trial and enter your competitor’s URL in the search box. It will throw up everything from your competitor’s targeted keywords to their performance.
#3 Get The Math Right
What is the maximum bid that you can put on a keyword?
It is often determined by the profit that would result out of the conversion. For example, if you earn $5 profit from the sale of a product/service via the AdWords route, bidding on a keyword that is $6 in price doesn’t make sense.
This is just an example and may not be as easy a calculation as we have stated above, but one needs to apply the same logic while bidding for keywords.
#4 Remove Duplicate Keywords
Duplicate keywords can hurt your AdWords campaign.
There is a myth that when you are using duplicate keywords, you can narrow down the competition and compete against yourself.
This is far from the truth as Google would only pick the best keywords in the ad auction and you basically compete against others and not yourself.
So remove any duplicate keywords that you are using as it won’t pay any dividends to your campaign.
#5 Advertisement USP
Unique selling proposition or USP is vital for the success of your AdWords campaign.
Why should a customer opt to do business with you or simply why should they not go to your competitors?
To ensure that you campaign makes a strong statement, focus on your core strengths. Is it quality of product or service, price or add-ons that your customers would benefit from?
Secondly focus on what you customers want and make sure these are a part of your campaign. And most importantly exploit the weaknesses of your customers or an opportunity that haven’t been able to figure out.
#6 Tempting Proposition
In an AdWords campaign, you need to attract users to click your ads and hence you need to present a tempting proposition.
Here are two things that are very important, you need to attract all the qualified prospects and at the same time ensure that unqualified prospects don’t click your ad and result in loss of revenue.
Your ad thus should be compelling and at the same time define its purpose.
#7 Call to Action
Like every other online marketing technique, ‘Call to Action’ is of prime importance for your AdWords campaign. Once you have attracted a qualified user to your ad, you need to clearly define what the user is ideally looking for.
If you are selling ‘Pizzas in Amsterdam’ make sure your ad makes it clear that you sell pizzas and give extra information such as your address and phone number.
Over to You!
These are a few basics that you must know before you get going with your AdWords marketing campaign.
These allow you to create and manage an effective campaign that not only yields dividends but also reduces the per-user cost of engagement.
Do you need any other help or want to request more clarification on any specific topic? Feel free to ask here in comments.
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