Some of the most widely used utilities on the internet, like social media sites and search engines, are popular because they’re free. So how do the companies that run them make such enormous profits?
The mainstay of their revenue is derived from what is known as Pay-Per-Click (PPC) advertising – those ‘sponsored links’ or ‘sponsored ads’ that appear on the search engine results page, along with hundreds of other blogs and websites. While Yahoo! was the first search engine to develop PPC technology, Google has certainly become the most successful, after launching Google AdWords in 2002. Internet guru Greg Preite says that hundreds of thousands of advertisers world-wide currently use AdWords to promote their products – to a tune of $23-billion per year! While that’s a lot of advertising dollars, note that Priete was speaking about search engines – it doesn’t even include social media mega-sites like Facebook.
The PPC concept is very simple. It begins by identifying keywords – those terms or phrases that best define your business, and that correspond to what a customer is typing into a search engine. The advertiser pays Google for the right to these keywords in ads through a bidding system. When a consumer searches using that particular keyword or keyword phrase, the ad appears at the top of their search results as a sponsored link. The advertiser gains enormous visibility this way, and pays for that privilege every time their ad is clicked. If the bid for the keyword is $1.99, the charge per click is $1.99.
Simple enough. But the framework of an AdWords account has several layers beginning with the most general drilling down to the most specific. An AdWords campaign can deal with several parts of your business at the same time.
Take the example of John’s Bike Store. John wants to create an AdWords marketing program to sell all of his bicycles, from mountain bikes to road bikes to racing bikes to hybrids. Each one of these types of bikes could be defined as requiring a separate campaign, because they each appeal to a different kind of customer. Within each of those campaigns, further divisions become apparent; racing bikes will include men’s models, women’s models and triathlon racing bikes, for example. AdWords calls each of these themes an ad group. Relevant keywords fall into one of these ad groups. Then ads are created to reflect the ad group theme, and use the keywords within each ad group.
Confused yet? Don’t be – let’s build an AdWords campaign for John’s Bike Store.
The premise of PPC advertising is to have the ad appear with a specific keyword, and so the first step is keyword research. All business owners likely know the keywords that best define their business from dealing with daily customer queries. Do you sell ____? Where can I find ____? Don’t forget important brand names, and make sure to include misspellings so you don’t miss a potential sale. Brainstorm over a couple of days, and don’t discard anything yet.
Once the keywords and keyword phrases have been compiled, place them in the Google AdWords keyword tool. Always use this tool, and never assume that users are searching for your business using the keywords you think are relevant. This tool provides real-time-search results on how often these keywords are used in the search process. It also lists a whole host of alternatives and other ideas. At this stage you could be looking at 300 to 500 proposed keywords, so weed out the ones that don’t really pertain to your business till you pare the list down to 100 or so.
As you peruse the keyword list, themes will start to emerge. There might be several keyword phrases around a particular item you sell that you hadn’t considered. Or, there might be several keywords focused around a particular manufacturer. These emerging themes are defined by Google as ad groups.
Back to John and his bike store. His keyword research has revealed phrases around mountain bikes, which could form the basis of a campaign. The themes or the ad groups would then be men’s mountain bikes, women’s mountain bikes and high-suspension mountain bikes. And the keywords within those ad groups would be ‘mountain bikes for men,’ ‘bikes for mountains,’ ‘mountain bike,’ mountain bikes’ and ‘mountian bike’ for those who can’t spell.
The ads fall within the ad groups – usually two per ad group. And there are ad writing rules. Google doesn’t appreciate cute copy and frowns on profanity. And you are tightly restricted to the number of characters – 25 for line one, 70 for lines two and three, and 35 for the URL to the designated landing page. And that’s characters, not words. Writing that tightly is harder than you think.
The keyword phrases within the ad group are written into the ad, and appear in bold so it catches the consumer’s eye.
How does Google decide where your ads appear relative to those of your competitors? The customer that submits the highest bid for a keyword will usually have his ad appear first. But Google AdWords has also created an algorithm called Quality Score, which is based on a number of factors including the overall success of a campaign, the quality of the written ads, and the click-through-rate. Google combines the quality score with the keyword bid to determine who comes first.
There are all kinds of opportunities available using AdWords. A campaign can be geo-targeted, or be made time-specific, so, for instance, you don’t advertise on weekends. Every advertiser has complete control over the budget, and when the ads start and stop.
There are also some valuable tools in AdWords, such as ‘negative’ keywords. If we refer back to John and his bike shop, he may not sell tandem mountain bikes. If he designates ‘tandem’ as a negative keyword, this alerts Google AdWords that John’s mountain bike ad should not appear if the keyword phrase contains tandem in it. This prevents lost leaders, and is an important tool in keeping your campaign focused.
There is an AdWords analytics tool that will help evaluate your campaign. It will provide statistics on the number of impressions, number of clicks, your total cost and more. What it doesn’t tell you is what happens when the customer arrives at your website. This is where you need a website analytics tool, such as Google Analytics. And the advantage of using Google Analytics is that it can automatically be linked to AdWords. It’s important to use both tools in tandem.
AdWords is most effective when campaigns are directed to a specific landing page on your website. If your goal is to promote engine service over the winter months, then creating a specific landing page with a clear call to action – book your service appointment now – is the best way to make a successful conversion.
Is AdWords right for every business and every circumstance? No, not necessarily. But it is another arrow in your quiver, and can be used to support your existing print, radio and display advertising campaigns. Right now Google is pushing it by sending out $100 trial vouchers – that won’t go far, but it will allow you to put your finger in the pie and see if it’s worth a future investment. For $100, limit yourself to one campaign, a two-week focus and make sure that you’ve got a landing page that will convert. And have fun. You’ll learn a lot about your business, and your website.