Demystifying “bidding for business with Google Adwords”

You are paying for them to see it. With PPC your advert is visible to surfers browsing by, but you only pay for them to click through. You can think of this as getting the “exposure” part of your ad-spend for free.

On to Google Adwords...

The second reason PPC is important (and especially Google AdWords) is that leads from adverts are qualified leads. Think of Google as the most popular television show in the world. As you may have heard Google handles about 70% of all internet searches (probably around 80% now).

What Google realised is that in order to maximise its ad revenue it had to make click-throughs more valuable. Google AdWords does this by making you choose search terms for you to screen your advert to. This is something like a Nike or Adidas advertising during the Comrades Marathon screening. This makes screening of your advert more valuable because you can use search terms (or rather as we like to call them Keywords/phrases) to pre-qualify your audience; and because you pay for each click the more qualified the surfers clicking through to your website the more productive your advertising spend and the greater the chance of conversions from prospects to customers.

So, as you begin to see, there is more than one goal in managing your PPC campaign/marketing. What we now know is that we want to optimise for at least two parameters:

1. Maximise click-throughs – that is, to increase traffic
2. Maximise revenue per click – to increase the revenue-to-traffic ratio for your website

We often find ourselves in the situation that for each item advertising budget we have more than enough keywords and traffic to fill our budget. To get the greatest value out of our budget we need to optimise our keyword selection. We do this by minimising our average cost-per-click. In Google AdWords we bid for the position of our adverts. This means that depending on the amount we are willing to spend per click-through we may be either first (that is, above the search results i.e. at the top of the page) or on the right-hand column in a position from 1 to 10 (with 10 being at the bottom of the page) and on any page from the first to the last search results page. The higher your bid, the higher your position, and the higher average cost-per-click.

So our third parameter is average cost-per-click:

3. Minimise average cost-per-click

Conventional wisdom suggests that your advert needs to be in one of the first four positions on the first page to be noticed and clicked on. However, depending on your product and the power of your copy you may perform well further down; for instance an advertisement for a shopping item may generate traffic in a much lower position. A lower position may require you to speak more directly to a more narrowly defined segment to be noticed and generate traffic.

The third reason PPC is important is that one can optimise one’s message. Google allows advertisers to run as many versions of their copy as they like. You may have two or three versions of your advert or promotion that you think will grab the viewers’ attention and generate action. What you would do is load all your different offers and see how they fare. Google will automatically screen the advert which generates the greatest traffic more to optimise your budget, but in a situation where promotions are mutually exclusive you would discard your poorer performing offer.

Thus, we have another parameter to optimise for:

4. Optimise copy for traffic

We touched on the issue of maximising revenue per click (point 2). While using appropriate keywords and copy will pre-qualify visitors to your site, and the more appropriate the keywords and copy the higher the click-through rate, this is still not a very scientific way of choosing appropriate keywords. We want to know that keywords are generating real interest not just casual browsing. We do this by measuring conversion rates. You may consider genuine interest in your service if, perhaps, browsers visit your “contact” page or fill in “call me, I’m interested” form. Google allows you to specify these landing pages to evaluate more accurately both your copy and your keywords. Our fifth point is then to:

5. Evaluate keywords and copy by conversions (not just traffic)

One final word of advice on AdWords management: Google places adverts in two places. The first place is next to its search results for keywords and phrases – what Google calls the Search Network. Google also provides content to many sites on the internet and it places adverts on other websites in return for ad-revenue called the Content Network. Often advertisers have an aversion to using the Content Network which is unwarranted. As an advertiser it is not important where a click-through comes from, but rather that it has happened at all. What you should always remember is that good keywords which are often an expensive bid on the Search Network are considerably on the Content Network. Using the Content Network is a means to significantly reduce your average cost-per-click.

Thus, my final point in optimising and managing your PPC marketing is to:

6. Use the Content Network to reduce average cost-per-click

To recap, PPC should be an essential part of your online ad spend because

a. you only pay for your leads/click-throughs
b. with Google AdWords your leads are qualified leads and, thus, far more valuable
c. AdWords allows you to optimise your message and revenue spend considerably more than other media

The critical point to remember, however, in any media placement is that you need to know the value of your leads; and in the case of Google AdWords you need to not bid more for a lead than the expected value of – make sure you know the value of each conversion or lead. With that in mind, following the advice in points 1 to 6 will make PPC incredibly productive media spend; media spend you cannot afford to ignore.

Darren Reardon heads up the Search Engine Optimisation and Pay-Per-Click section at LOW FAT Digital Communications. Darren may be contacted via email on .