Creating Cost-effective Google Advertising

 

Creating Cost-effective Google Advertising

Creating a profitable Google search campaign is a nerve-racking process if you haven’t done it before.

As a beginner hope and fear are what dominate your thought because you never can tell if you’re about to fund Google Empire or start depositing money in your account.

But the task is simple, mostly if you follow the steps I’m about to go through that will ensure you’re depositing more money into your own bank account.

When set up and managed properly, AdWords is one of the best sources for new customers. Every successful advertiser sets up and manages AdWords campaigns with a checklist.

So, you need the following checklist in Creating Cost-effective Google Advertising.

Now, let’s get down to it.

Creating Cost-effective Google Advertising

No: 1 Customer Demand

The first ingredient is customer demand. If your customers are not searching for your product or service in Google, then obviously, AdWords search advertising is not going to work for you. So, before you get too excited about creating your first campaign, you need to verify there is in fact search volume for what you’re going to offer.

The tool to use is the Google AdWords Keyword Suggestion Tool (https://adwords.google.com/select/KeywordToolExternal).

The keyword tool acts much like a thesaurus. You enter in phrases you think your prospects are searching, and Google tells you other similar, relevant phrases. Google also will tell you how often people search these phrases, how competitive the keywords are in AdWords, and how much it’ll cost to advertise on each keyword. All of this information will help you determine which keywords you want to use in your first campaign.

Before you start using the tool, make sure the Advanced Options are set. If you’re in the United States, then set the Location to United States and set the Language to English. The Device should default to desktops and laptops, which is what you want unless you’re targeting only mobile devices.

Creating Cost-effective Google Advertising

Next, click on the Columns drop down menu and make sure to check Competition, Local Monthly Searches, and Approximate CPC (cost per click). Local Monthly Searches will show the searches in the United States (if you picked the U.S. in the Advanced Options). Plus, you’ll see the AdWords competition and the cost per click for each keyword. This will help you analyze the keyword opportunities.

Creating Cost-effective Google Advertising

Also, when you’re conducting keyword research for AdWords, I recommend you use the keyword Match Type setting called “Phrase” match. This will give you an accurate sense of how many relevant phrases there are per month.

Creating Cost-effective Google Advertising

Finally, to use the Keyword Tool, simply type the phrases you think your ideal prospects are typing into Google to the right of “Word or phrase” and click the Search button.

Creating Cost-effective Google Advertising

When the Keyword Tool refreshes, you’ll see a list of keyword ideas along the left column, which are based on the phrases you typed into the search box. Plus, you’ll see the AdWords Competition, the Local Monthly Searches, and all the way to the right is the Approximate CPC for each keyword. That’s how much it will cost each time someone clicks on your ad.

There are three questions you’re going to ask to determine whether or not to advertise on a particular keyword:

  1. Is the keyword searched in Google? If there is no search volume, then that tells you no one is typing that phrase into Google. There is no point in advertising on keywords no one is searching.
  2. Is the person searching this keyword likely to buy my product or service? Or is the person more likely just doing research with no intention of making a purchase? In other words, what is the intent of the keyword? When starting out, you’ll want to advertise on what I call “buying intent” keywords where the person is clearly looking to buy.
  3. Can I afford to advertise on the keyword? This question is important, but it requires a bit of math to calculate. So let’s take a look at that now.

No: 2 Fourth Grade Math

Before you can finalize your keyword list, you must first make sure some basic “4th grade math” makes sense. This will prevent you from going after keywords where there’s no chance of being profitable. It’s better to run these numbers now before you’ve sunk time and money into a campaign destined to fail.

To answer the question “Can I afford to advertise on this keyword?” you need to calculate your maximum cost per click (Max CPC). You’ll compare your business’s Max CPC to the estimated keyword CPC in the Keyword Tool to see if you can afford to advertise. For example, if your Max CPC is $5 and the estimated CPC is $4, then you know there’s a good chance you can profitably advertise on that particular keyword.

Your Max CPC is determined by your website conversion rate, your profit per customer, and your target advertising profit margin. If you don’t know these numbers, then you’ll need to guesstimate, or set up tracking to more accurately calculate them.

Use the formula below to calculate your Max CPC and then compare to the estimated CPC you found above:

Max CPC = (profit per customer) x (1 – profit margin) x (website conversion rate)

For example, let’s say your average profit per customer is $500, and out of 1,000 website visitors you convert 10 into customers. That means you have a 1% website conversion rate. If you are comfortable with a 30% profit margin, then here’s how you would calculate your Max CPC:

Max CPC = $500 x (1 – 0.30) x 1% = $3.50

Again, your Max CPC must be in the neighborhood of the estimated CPC in Google’s Keyword Tool or else you’re in trouble. If your Max CPC is $3.50 and the estimated CPC for a keyword is $10, then you’ll need to first increase either your profit per customer or your conversion rate before you can profitably advertise on that particular keyword.

No: 3 Competitor Intelligence

At this point, you now have a list of “buying intent” keywords that you’re confident you can afford. The next step is to reduce your risk by leveraging competitor intelligence. In most industries, you’ll find competitors who already have tested and optimized their AdWords campaigns. That means they have figured out which keywords, ads, and landing pages work and do not work in your market.

Wouldn’t it be great if you could just hack into your competitor’s AdWords accounts and steal that information?

Well, before you get too far along on your illegal hacking plot, I should let you know about a very cool competitive intelligence tool called KeywordSpy. KeywordSpy collects, organizes, and provides easy access to all of your competitors’ historical advertising information. Think of it like your own Delorean time machine!

No: 4 Powerful USP

Your USP, or unique selling proposition, is what differentiates your business from your competitors and gives your prospects a compelling reason to choose you. In other words, your USP answers the question “Why should I, your prospect, choose to do business with you, versus any and every other option, including doing nothing?” You can thank direct response marketing expert, Dan Kennedy, for giving us that valuable question.

When it comes to AdWords, there are 3 important reasons to create a powerful USP:

First, a strong USP will generate more traffic from qualified prospects (encourage clicks on your ads) and repel unwanted leads (prevent clicks on your ads).

Second, a strong USP will skyrocket your sales conversion rates. So, not only will you generate more traffic because you’ll get more clicks on your ads, you’ll also convert more of your traffic into paying customers.

And third, a strong USP can eliminate price comparison shopping. This can be a game changer for your business because you’re no longer seen as a commodity. If you give your prospects a compelling reason to do business with you versus your competition, then price becomes a secondary issue, and you’ll be able to demand higher prices than your competition without hurting your sales.

OK, a USP is a key ingredient. Makes sense, but how do you create one?

Well, first, you focus on your core strengths. What are you better at than your competitors?

Second, talk to your customers, and more importantly, listen to them. A great USP is built on customer insight, so ask your customers why they do business with you. Also, ask questions to determine what your customers dislike about your industry and what your customers wish you could provide in addition to your core products or services.

Third, analyze your competitors, and look for an opening. The most important word in unique selling proposition is unique.

In order to create a really strong USP, you need to study your competitors’ ads, websites, and marketing materials, and find your opportunity to stand out. I recommend you use a spreadsheet to organize all of your competitors’ ads and websites, so you can more easily find the commonalities. As you’re doing this, look for an opening to say something unique and superior.

No: 5 Irresistible Offer

What can you offer in your AdWords campaign that is so compelling your prospect would be a fool to not take action? And how can you stand out from all the other ads your prospect is going to see in the search results?

The answer is your irresistible offer, which consists of the following 4 components:

Valuable

Your product or service must be more valuable than the price. That’s basic marketing 101. This doesn’t mean your offer has to be cheap. You just need to clearly define all of the value your product or service provides to your customer and make sure it outweighs your price tag.

Believable

When you make an offer that appears to be too good to be true, then your prospect may be a little skeptical. So you must provide a believable reason for your offer.

For example, if you’re running a special sale, then you need to give a reason why you’re offering such a steep discount. The reason could be anything: clearing out inventory, end-of-the-year sale, celebrating an anniversary, opening a new store, your birthday, and so on.

Reduce or Reverse Risk

Everyone is scared of getting ripped off online. One of the best tactics to minimize the risk to your customer is with a money back guarantee. A money back guarantee puts all the risk on your business to deliver excellent service, or else you’ll have to give all the money back to the customer.

Whenever possible, I always recommend you include some kind of guarantee in your offer. It will improve your response rates and it’s another great way to differentiate yourself from your competitors.

Call to Action

One of my elementary school art teachers once gave me fantastic advice when he was teaching a class. He told me to always “Use the KISS method… Keep it simple, stupid.” I didn’t realize at the time, but those truly are words to live by, especially when you’re creating an irresistible offer.

If you want your prospect to pick up the phone and call you, then make it crystal clear and simple to call you. Don’t expect your prospect to connect the dots or search around your website to figure out the next step. Use a strong call to action and keep it simple.

At this point, you’re probably wondering if you’ll ever actually create your AdWords campaign. We’re already halfway through the ingredients, and you don’t have any ads to show for it! Trust me, the first 5 ingredients are absolutely critical, and you’ll thank me later once you’re ads are live and you’re generating profit, instead of loss. But since you asked for it, let’s dive in and talk about creating your ads.

No: 6 Compelling Ads

With AdWords search advertising, you pay only when people click on your ads. Therefore, your ads have two very important jobs:

Attract qualified prospects so they click on your ad instead of competitors’ ads.

Repel unqualified prospects so they do not click and waste your ad budget.

That means more traffic, more sales, and less wasted money on unqualified traffic, which all leads to higher profits for you.

And there’s one more important job for your ads. Compelling ads with a high click-through rate (CTR) will boost your AdWords Quality Score, which in turn will lower the cost per click of your keywords. So your ads will directly affect how much you pay per click for each of your keywords. Great ads will lower your costs while lousy ads will raise your costs.

No: 7 Congruent Landing Pages

At this point, your prospect has searched for your product or service. She found your ad to be compelling versus all of the other options. She clicked to learn more and landed on your website.

Now what? Well, if you’re like a lot of first-time advertisers, then your prospect is now on your homepage scratching her head trying to figure out what just happened. The ad made a promise the homepage couldn’t keep.

That’s because your homepage is not an advertising landing page! Homepages explain everything your business does, all of your products and services, and all of the different customers you serve. In other words, your homepage could never, ever, be 100% relevant to the keyword searched and the ad clicked. Do not make this mistake.

Instead, create a dedicated landing page that matches the keyword and the ad. The goal is to make the entire sales process congruent so your prospect is continually reassured she’s going down the right path.

The most important component on your landing page is your headline, which is the first thing your prospect will read. Your headline must grab attention, reiterate the offer made in the ad, and compel your prospect to keep reading the rest of the page.

The copy of your landing page should again be relevant to the keyword searched and the ad clicked on. Include your USP, benefits of your product or service, details about your irresistible offer, social proof, credibility that you’re a legitimate business, and a strong call to action.

No: 8 Conversion Tracking

We’re almost ready to set up your campaign in AdWords, but there is one final ingredient: Conversion tracking. If you skip this step, then you’ll never know which keywords and ads are generating sales and which are just losing money. In other words, you will not be able to optimize your campaign once it’s up and running.

Conversion tracking is simply the method of measuring sales generated by your AdWords campaign. More specifically, you want to know which keywords and which ads are generating sales.

If some or all of your sales occur online with an e-commerce shopping cart, then conversion tracking is pretty straightforward. Just use the built-in Google AdWords conversion tracking.

No: 9 AdWords Settings for Success

As I mentioned, AdWords does a great job of making it fairly easy to set up your campaign. Simply click on the green New Campaign button as shown below and follow the steps to add in your ads and keywords.

Creating Cost-effective Google Advertising

The process is pretty simple; however, a lot of the default settings are not in your best interest. That’s why Ingredient #9 is to use the correct AdWords settings for success.

Here are the most important settings to watch out for:

Search vs. Display,   Device Bids,   Keyword Match Types,   Negative Keywords.

There are 3 main keyword match types:  Broad;  Phrase;  Exact

No: 10 Optimization

As soon as you enable your campaign and Google approves your ads, you can take a nice deep breath. Congratulations, your ads are live!

Unfortunately, you can’t relax yet. Most campaigns are not profitable from the start and they always require continual optimization to stay profitable. There are 3 main areas to improve your AdWords campaign performance:

Your keyword bids. Once you start to generate clicks and sales, then you need to adjust your bids accordingly. If your keywords are generating sales profitably and you’re not ranked #1, then continue to raise your bids. If your keywords are not generating sales profitably, then obviously, you’ll need to lower your bids or pause the keyword entirely.

Your ad click-through rate (CTR). As I mentioned earlier, your ad CTR directly affects your quality score, which in turn determines how much you pay per click. To optimize your CTR, test different ads to see which version gets the most clicks.

Your landing page conversion rate. The final area to optimize is your landing page. There are many tools to help you test different landing page versions, but if you’re just starting out, I recommend you use Google Analytics Experiments (formerly known as Google’s Website Optimizer). It’s easy and free to get started. Go to http://analytics.google.com to set up your free account. Then create an experiment to test two different versions of your landing page and measure to see which one generates the most conversions -via Kissmetrics

Conclusion

In Creating Cost-effective Google Advertising it’s important to focus on optimizing keyword bids, ad click-through rates, and landing page conversion rates. If you follow these steps and include all 10 guides in your campaign, then you will be well on your way in Creating Cost-effective Google Advertising.

Please let me know in your comment below if you resonate with this guide and if you will apply it.

 

4 Comments

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