Webtivity Internet Marketing Blog

What is it and How Does it Impact Me?

Google is a money-making machine, and the bulk of their annual revenue comes from their advertising channel.  You’ve probably gotten a postcard, email or phone call from Google encouraging you to use AdWords (also called PayPerClick) to advertise your business online.  Google’s ad revenue increased from $28 billion in 2010 to $36 billion (unaudited) in 2011.  No wonder they’ve been pushing it so hard!

Google also has been pushing the idea that business owners can run their own campaigns.  And they’re banking on you doing just that.

Many of our clients who come to us for help with their AdWords campaigns have been running their own campaigns for at least a year.  Once we have optimized their campaign and their ads, on average we have reduced their monthly Google ad spend between 20-30%.  On some campaigns we’ve reduced Google ad spend 50% or more!  Imagine what those businesses could have done with all that extra money they paid to Google over that years’ time.  And imagine how much less money Google would have made last year if everyone optimized their campaigns!

Beyond simply reducing Google ad spend, you should focus on improving Quality Scores for the campaign.  This ultimately leads to improved ad positions, better click-through rates and increased conversions.  You won’t hear Google’s sales force (or phone book companies pushing AdWords) focusing on improving conversions.  Why?  Because it’s hard work, and it is in their best interest for you to run under-performing ads.  The more you increase your ad spend, the more Google and their media-buying partners will make.

So how do Quality Scores affect you?  Here is a snippet provided by Google in their AdWords Help Center:

•    Ad auction eligibility: Higher Quality Scores make it easier and cheaper for a keyword to enter the ad auction.
•    Your keyword’s actual cost-per-click (CPC): Higher Quality Scores lead to lower CPCs. That means you pay less per click when your keyword has a higher Quality Score.
•    Your keyword’s first page bid estimate: Higher Quality Scores lead to lower first page bid estimates. That means it’s easier for your ad to show on the first page of search results when your keyword has a higher Quality Score.
•    Your keyword’s top of page bid estimate: Higher Quality Scores lead to lower top of page bid estimates. That means it’s easier for your ad to show towards the top of the page when your keyword has a higher Quality Score.
•    Ad position: Higher Quality Scores lead to higher ad positions. That means your ad can show up higher on the page when your keyword has a higher Quality Score.

So as you can see it is in your best interest to pay attention to constantly improving your campaign and Quality Scores.  And even though they are an important factor, it isn’t all that easy to find your Quality Scores in your AdWords administration panel.  Many people launch their AdWords and let it run on auto-pilot.  If you allow that to happen you are spending more money than you need to on your campaign, and it will be much less effective.

Traffic vs. Conversions
(originally posted on the Manatee Chamber of Commerce Blog)

Over the past few years Google AdWords (also called Pay-Per-Click or PPC) has started getting a bad name because of the way some internet marketers and large media companies have misguided their customers.  If someone is running a PPC campaign for you and the primary success metric they track for you is “traffic”, then your campaign is doomed from the start.  The primary success metric you should be tracking is “conversions”.  That is a much more difficult result to achieve, which is why many don’t focus on it.

Here are some things to keep in mind if you look at PPC as an option for marketing your business online:

Landing Pages
When someone clicks on your PPC ad, you typically should not take them directly to your main website because it probably is not designed to receive traffic from a PPC ad.  Research shows that people who click on PPC ads are much more conversion-oriented, which means they are ready to make a purchase or complete an action.  So instead of taking people to your website, you should take them to a Landing Page that is specially designed to successfully convert visitors in some way that you can track: clicking a button to “Buy Now”; submitting information through a contact form; calling a phone # you can track internally; etc.

Ad Placement
Your PPC ad will appear higher than your competitors if you are willing to pay more Per-Click than they are.  The inherent problem with this model is if your competitors are running campaigns that aren’t optimized properly they may be artificially inflating the Cost-Per-Click for everyone competing for the same words and phrases.  Increasing your Quality Scores can help mitigate the impact of competing against poor campaigns.

Quality Scores
This is often something business owners are unaware of.  Google assigns Quality Scores to your PPC campaign based on the quality of your ads, the quality and substance of your Landing Pages, how long people are staying on your Landing Pages and whether or not they are converting.  If you have better Quality Scores than the other ads you are competing against, you will pay less than your competitors every time someone clicks on your ad—even though your ads are positioned above your competitors.

Return On Investment
If it costs you $5.00 every time someone clicks on your PPC ad, and you understand that average Conversion Rate for a PPC campaign is 10-15% (it varies from industry to industry) and you charge $15.00 for your product, you can quickly see the math doesn’t add up and a PPC campaign may not be the answer for you.  If your internet marketing team isn’t going through this exercise with you be prepared to spend a lot of money and not get any ROI.

It’s easy to throw a bunch of money at PPC and get traffic to your Landing Pages, but if that traffic isn’t targeted (i.e., they aren’t qualified leads) you are spending money attracting people to your Landing Pages who really aren’t interested in your product or service.  High traffic and no conversions means you are fighting an uphill battle.  Your business can’t afford to run a campaign this way.