Adwords is an online advertising system created by Google. In 1997 Google created new algorithms to provide people more accurate results when trying to find content on the internet. Since then Google has been almost a framework of the internet itself and has approximately 80% of the worldwide search market. To monetize on this success Google started offering a paid advertising section alongside their natural search results, hence Google Adwords was born. With the introduction of numerous Google products like Gmail, Maps, Google+ and Youtube, Google has been able to expand their advertising offerings. Not only this, but Google also offers a service called Adsense, which is an opportunity for website owners to monetize their websites with Google ads (Adwords). So even on non-Google properties, Adwords can be found.
Adwords allows businesses to bid in an auction styled system on keywords (words that people would type into Google Search). Google Adwords can be a great way to reach a market that is more and more referring to the internet for knowledge on products and services both locally and abroad. Unlike traditional advertising, Google Adwords offers great insights into the performance of your ads using what is called conversion tracking so you can easily quantify the return on investment of your advertising.
There are 3 locations you can place your ads:
You can choose one of these options or a combination of the three. Deciding where you should advertise mainly depends on how customers would normally discover your product. For example, if you sell a very specific niche computer part, using Google Search and Search Partners is probably the way to go as people would be likely pro-actively seeking that specific part. However placing ads on the Google Display Network might be a wise idea if your customer might be more spontaneous in their buying decisions or if the goal of your campaign isn’t conversions (sales) but rather brand awareness. For example if your service was a fitness centre, the purchasing decision of this service would be more spontaneous so it might be better to use both Google Search and Partners as well as the Google Display Network. If you sell a popular chocolate bar the goal of your campaign might be brand awareness, and as a customer is unlikely to go on the internet to find out what chocolate bar they want to buy as it is a low cost item, using Google Search and Partners wouldn’t make sense. However the Display Network would be a wise choice.
Adwords is split up into the following structure:
You can target customers in the following ways:
This is a very difficult question. Of course it really is a business decision, how much is a customer worth to you. Also are there certain market opportunities that have been well for you that you would like to exploit or perhaps a certain aspect of your business is slow and it needs some help. Whatever the case you want to spend as little as possible to acquire a sale or lead. Depending on the industry you are in will dictate the competitiveness of bids in your auction. Some industries the cost per click can be even over $20, and some can be as little as 10 cents.
In the Adwords interface you can customise the columns to show an approximate of the first page bid and the top page bid and this will be a good starting point on what you should price your clicks. There are also automatic bid options and you can even let Google decide on your bids based on the maximum you’re willing to spend on a click. There is another bidding option which is based on optimization, that is, Google will decide on your bids based on the best value for money by looking at the history of your bidding. You can use the Keyword Tool (located under “Tools and Analysis”) which will give you a general guide on the competitiveness of certain keywords in your industry.
There are 4 ad formats available:
Unfortunately your ad position (the rank your ad is displayed on Google Search) isn’t as simple as the money you’re willing to pay. It’s the goal of every advertiser to have their ad at the top of the paid advertising section as these ads are likely to get more clicks than ads at the bottom. Like natural search results Google uses an algorithm to decide how relevant your ad is; this information in conjunction with your maximum bid will dictate what position your ad is shown. This algorithm is called Quality Score. Your Quality Score is dependant on the click through rate (the percentage of people that click on your ad per an impression), the relevance of the ad to your website and the quality of your landing page (this includes things like the use of relevant keywords and even your page loading time). So your rank is calculated by:
Maximum Bid x Quality Score = Ad Rank
Whenever you enter bids for keywords into Adwords you are always telling Adwords what the maximum amount of money you are willing to pay per a click is not what you will pay. There is a formula for working out what you will actually pay (it might take a little bit to work your head around it):
Ad Rank of the person below you/your Quality Score + $0.01 = the price you will pay per a click
Keeping in mind that the Ad Rank of the person below you is calculated using:
Maximum Bid x Quality Score = Ad Rank
Ultimately you don’t really need to understand the maths or know the intricacies of Google’s algorithms to be fantastic at managing Adwords. If you stay focused on having a good website, with relevant ads pointing to it and you are targeting people you need to target, and you are paying a competitive price for your keyword, you will go a long way in managing your account.
There are a few different types of bids you can place on keywords, these include:
Which one you choose from these options is up to you. My advice is if you are experienced with Adwords and want total control pick the Manual Bidding option. If you are new to Adwords try out the Automatic Bidding option. If you have conversions setup and getting a conversion is the only thing that matters the Conversion Optimizer and Enhanced CPC is the way to go. If you are focusing on brand awareness and your product is a more spontaneous purchase, impression bidding is the way to go. One thing to keep in mind is that on Manual Bidding you can do bid adjustments depending on what time of the day or what day of the week it is. This can be used if certain times/days you get high quality or low quality traffic.
It is important that your ads are placed into groups/sections that way you can better manage how different areas are performing. There are different ways you can frame a business, and you might use one of these dissection methods already for evaluating the success of your business. Here are 4 ways you could frame your Ad Groups/Campaigns (in this example we are going to use a computer store):
Sometimes it can be really simple to structure your campaign, other times it can be quite challenging depending on your product or service. The main consideration for how you structure the campaign is how would a customer categorise your products and services and secondly how do you evaluate the success of different parts of your business? Most of the time these 2 considerations are identical, but sometimes they may be different.
There is a distinction between a successfully managed campaign and a successful advertising venture for your business. For example a lot of SEO companies consider having a high CTR (click through rate or the amount of clicks per impression) and having a low bid per a keyword is a telling factor of a successful campaign. However if customers are landing on your website from Adwords and they are not converting than ultimately Adwords is not good value for money. There are 2 ways you can evaluate the success of Adwords for your business with one being extremely obvious and the other using Adwords tools effectively:
There are 2 stages where you can filter out enquiries so you only get high quality traffic. You can filter enquiries through Adwords which is at the start of the customer acquisition process or through your website which is at the end of the process. Of course make sure your website content doesn’t mislead potential customers, make sure there are no ambiguities. It’s important that your Adwords ads and website content marry up so that you can get a higher Quality Score which will therefore increase the performance of your ads, and also to ensure the traffic you get is relevant.
On the Adwords side of things it’s important of course that your campaign targeting is good, that is, the geographic and language targeting is accurate. Probably the most likely reason you are getting bad traffic is through your keywords; keywords is probably the most time consuming and most important aspect of Adwords. Here are 6 important things you should take note of concerning keywords:
This is the default and will bring up any possible option of your keyword so for example if you have the keyword:
The following search terms will bring up your ad: tennis, shoes, buy tennis shoes, running shoes, tennis racket
You can see that the broad match is the most dangerous match type to use as if you are trying to sell tennis shoes and you use that keyword and matching option you’re going to get enquires for tennis rackets as well which you might not even sell.
This will only show your ad if the phrase is used, so for example if you have the keyword:
“tennis shoes” (notice the “ “ around the term this signifies that it is a phrase match)
The following search terms will bring up your ad: red tennis shoes, tennis shoes photo
The following terms wont bring up your ad: shoes for tennis, tennis shoe, tennis sneakers
This will only show your ad if the search term is identical to your keyword, so for example if you have the keyword:
[tennis shoes] (notice the  square bracket that signifies it is an exact match)
The only search term that will bring up your ad will be: tennis shoes
In this case a good Adwords manager would pick the exact match [tennis shoes] as the matching option. However if the Adwords manager found that there was hardly anyone typing in [tennis shoes] exactly, the Adwords manager might change the keyword to phrase match “tennis shoes” and maybe use “photo” and other terms as negative keywords.
There isn’t too much you can do to protect yourself from malicious clicks (clicks from spammers or competition). However Google is extremely clever with how it delivers ads to ensure that if one IP address is clicking your ad an unusual amount of times or if there are automated patterns of when your ad is being clicked it will remove your ads from those spammers. From my experience this has never ever been an issue, and I have heard likewise from many other industry professionals. If however you do suspect something suspicious is going on there is an IP blocking system part of Adwords where you can block a particular IP. This can be a good idea if you are part of a large organisation and disgruntled employees might be purposely clicking on your ads so it can be wise to block your ads from showing on your own IP address. You can also talk to Google and they will do a full investigation into the matter.
Article by Martin Gibson