Depending on how you manage your AdWords campaign, it can either be profitable for your business, or will eat your money without any return. If you’re considering using AdWords to increase sales or leads, this article will teach you how to establish your first AdWords campaign while increasing your return on investment. We will review three basic stages in creating and managing a successful campaign.
These stages are:
- Pre-Campaign Planning
- Creating the AdWords Campaign
- Optimizing and Tracking the Campaign
#1 Pre-Campaign Planning
Identify Your Primary Keywords
First, you need to understand what keywords people are using to search for your products. Every AdWords account includes a free tool called Keyword Planner, which provides the necessary research on the keywords you will use to run a successful AdWords Campaign. You can set up an AdWords account without creating any advertising campaigns, so you should create an account to gain access to the Keyword Planner.
Begin by creating a list of at least 15 search phrases that are relevant to what you’re selling. It’s very important to research search volume, competitive rankings, and the estimated cost-per-click (CPC) of keywords before creating a campaign. You will need your list of phrases to begin this process.
The next step is to research what your competitors are doing. It is likely that other companies in your industry are using similar keywords, and have already tested and optimized their AdWords campaigns. A keyword research tool such as Keyword Spy or Keyword Eye will help you compare your list with current competition. Try to find ways to differentiate yourself from the keywords everyone else is using. You can also consider using the same keywords but with more targeted ads and landing pages.
Here is a brief overview of how to get started:
- Visit Keyword Planner and choose: Search for a new keyword and ad group ideas
This lets you brainstorm keywords using the following options:
- Keyword – type in your list of words and phrases relevant to what you’re selling
- Landing Page – Keyword Planner will scan words relevant to the webpage you enter. This is valuable for evaluating your own website or a competitor’s page.
- Product Category – Evaluate thousands of pre-defined categories
- Set Your Targeting
- Keyword Planner will allow you to set your country, language, and words to exclude. The more specific you are in setting these parameters to align with your target market, the more knowledgeable you’ll be about keywords that make sense for your business.
- “Your Keyword Plan”
- Once you’ve set parameters, click the “Get Ideas” button to see the list of suggested keywords and Ad Groups (groupings of similar keywords). You can choose to add entire Ad Groups or just individual keywords to “Your plan” by clicking the double-arrow icon in the right-most column of the search results.
- After adding keywords to your plan, click “Review estimates” in the “Your Plan” section to see the estimated impact various budget levels have on the following:
- Clicks – number of clicks your ad might receive daily
- Impressions – how many times your ad might show in a day
- Cost – average amount you might spend per day
- Click-through rate (CTR) – ratio of number of clicks your ad receives divided by the number of times your ad is displayed
- Average cost-per-click (CPC) - average amount you might pay for a single click
- Average Position – the order in which your ad appears on the search results page, with “1” being the top-most position.
If you want to go deeper on how to effectively use Keyword Planner, read the article, “How to Use the Keyword Planner,” by Search Engine Land. There is also a great video tutorial you can watch here.
Establish Your Budget
Now that you have an idea of what your keywords will be, you’ll need to establish your AdWords budget with the information you gained from the Keyword Planner. It’s important to understand the Keyword Planner CPC estimate is just that – an estimate. Actual CPC results may differ, so you may need to adjust either your budget or the distribution of your budget once you launch your campaign and gain a sense of the real CPC for your targeted keywords.
The most effective AdWords budgets are set at a monthly level. The reason for this is that some keywords are more effective at leading to sales, so they are more competitive and therefore higher priced. Likewise, keywords that bring in visitors who may still be a few steps away from actual purchase have comparatively lower CPC amounts. As a result, you will have different price limitations on different keywords and will need to make strategic decisions on how best to allocate your overall budget.
Your CPC expectations should be based on your website conversion rate, target ROI, and your profit per customer. To gain a basic understanding of how to establish a budget for your campaign, use the formula below to compare to the estimated CPC given in Keyword Planner.
CPC = (profit per customer) x (1 – target ROI) x (website conversion rate)
Here is an example: Your average profit per customer is $300, and out of 1,000 website visitors you convert 10 into customers. That means you have a 1% website conversion rate. If you have a 25% profit margin, here’s how you would calculate your budgeted CPC:
CPC = $300 x (1 – 0.25) x 1% = $2.25
Once you calculate your profit-based CPC, use it to get an idea of how to balance your budget between the more competitive high-price keywords, and the less competitive low-price keywords. Ideally, the average CPC of all your campaigns will be close to your calculated profit-based CPC, though individual keywords will have a much higher or lower actual CPC.
As you become more familiar running AdWords campaigns, you can achieve a more efficient spend by focusing on the cost-per-conversion for each your ad groups. This will allow you to determine what kind of sales volume to expect based on various monthly budgets.
AdWords offers an automated tool called Conversion Optimizer that allows you to automatically set bids based on conversion rates. This tool analyzes your ads’ performance and optimizes your campaign spending to take advantage of keywords that offer the best price-to-conversion ratio budget. You can enable Conversion Optimizer in your campaign settings, but you should still keep a close eye on the data yourself to stay aware of how you’re spending your budget.
You can also make your spend more efficient by raising your Quality Score. The Quality Score is a measurement of how relevant your ads, keywords, and landing page are to a person seeing your ad. Keywords with higher Quality Scores are able to achieve higher rankings without higher bids. Therefore, you have an opportunity to maintain a lower actual CPC by constructing highly relevant ads and landing pages.
Hanapin Marketing (via their PPC Hero blog) has some fantastic insights on increasing your Quality Score in the Ultimate Guide to Google AdWords Quality Score.
With your keyword list, a monthly budget, and insight on the competition, you’re now ready to identify your value proposition! An effective value proposition consists of words or phrases that clearly explain why a consumer should buy your product or service.
Answer the following questions to identify your value proposition, which will then help you create an effective message for your AdWords ad:
- How do customers benefit from your product?
- What makes your product/service unique compared to competitors?
- What words and phrases are your customers using when talking about your product?
- What makes your brand trustworthy?
- What are the customer-perceived risks for your product or service?
- Is what you’re offering clear and simple enough for anyone to understand?
- What is your call-to-action (CTA)? A call-to-action is an instruction that provokes an immediate response such as “get a free quote” or “sign up here”. Use this list of action words to get word ideas (numbers in parentheses are word length).
Write down the answers to these questions. You will use this information later to create your ads.
#2 Creating the AdWords Campaign
You are now ready to create an AdWords campaign. Inside a campaign you can make ad groups, which contain a set of similar ads and keywords. A collection of ad groups forms a campaign. Organizing ad groups is an essential part of being successful with AdWords and allows you to categorize keywords.
For example, if one of your keyword phrases is “medical insurance options”, you want to place keywords with only slight variations in one ad group. Examples for this ad group might include:
- Medical insurance options for 2014
- Available medical insurance options
- Best medical insurance options
The list above is a perfect example of keywords that make a tightly themed ad group to form a well-structured campaign.
Write Enticing Ads
With every ad you create, it’s important to make the most of each word to effectively reach your target audience. Here are some key components that make up a text ad:
- Headline (You get 25 characters) – This is the first part of the ad your audience reads so it is also the most important. You need to create a headline that will immediately catch the reader’s attention, and asking a question is one great way of doing this. Be creative and don’t just use your business’s name. Here are a few excellent headline examples:
- What’s Your Healthcare Options?
- Health Insurance for $50/ month
- Get affordable health insurance
- Description lines 1 & 2 (35 characters for each line) – Craft a message that clearly conveys your value proposition. Use phrases and concepts from your answers to the value proposition questions above. Be specific and include a call-to-action that is consistent with the landing page the visitor will see after clicking the ad. Use proper-style capitalization for your ads. Capitalization has been shown to increase the click-through rate.
- Don’t Overpay for the Health Insurance You Need. Get a Free Quote!
- Atlas Travel Insurance Includes 24-Hr Emergency Services. Free Quote!
- StudentSecure Insurance Fulfills F-1 & J-1 Visa Requirements. Free Quote!
- Display URL (You get 35 characters) – Don’t simply copy and paste your domain name Try using the display URL as a call-to-action that makes you stand out and is consistent with what you’re offering. You can also try using your keywords here.
Example of a good ad:
Headline – Asks a question and qualifies people in the target audience (those injured in an accident)
Description – Lines 1 &2 include numbers that let users know the value proposition of being entitled $10,000 and receiving a free evaluation. It’s valuable because it identifies exactly what the user can get out of their click-through experience. There’s also a clear CTA to call the advertiser.
Display URL – Contains their phone number associated with the CTA. Users know exactly how to reach them, and the display URL is easy to remember.
Example of a bad ad:
Headline – Doesn’t clearly relate to a specific audience. It also doesn’t catch the user’s attention because it’s simply stating the business’ name without identifying and relating to what keywords people are using in their searches.
Description – Assumes that users already know about Wall Stickers Nursery and doesn’t include a specific call-to-action. The ad also has poor grammar and punctuation, which makes it difficult to read and understand. It doesn’t address anything specific about the nursery itself, or explain any incentives that encourage the user to find out more.
Display URL – Leaves the reader confused and uninformed about what is being offered. It looks like the searcher will be taken to Amazon’s homepage and left to fend for themselves to find products relevant to their search.
Important Default Settings
As you are creating your campaign, here are some very important default settings to watch out for:
- Search vs. Display
- Choosing “Search Network Only” in the campaign settings will target only the Google Search engine instead of the Display Network. This gives you the option to choose between Google search and search partners, such as aol.com or ask.com. As a beginner, it’s wise to choose Google search since the traffic from Google is much higher quality.
- The Display Network is a gigantic network of websites that display ads from Google advertising services. This enables your ad to appear on websites that Google considers relevant.
Note: Although the display network reaches more people, the quality of traffic is much lower. No beginner should use the Display Network until you have a proficient understanding of AdWords.
- Device Bids
- Is your landing page mobile friendly? If not, you should seriously consider using a mobile template or re-designing your page. You can also add your phone number as an ad extension and it will be highlighted on mobile search results. Then it will be easy for mobile users to tap and call you directly. Ad extensions modify the display or behavior of your ads. Visit AdWords help for more information.
Keyword Match Types
There are three keyword match types that allow you to control when your ad appears according to the keywords you’re using. These three match types are:
- Broad Match- This is the default match type. Google will show your ads to any search phrase it chooses as being “relevant”. Even though more people will see your ad, it’s less targeted and can potentially waste much of your budget. Broad match will drive a lot of clicks, but you need to keep a close eye on search query results to make sure you’re not paying for irrelevant traffic. Setting up negative keywords will help with this (See Negative Keywords below).
* Best used: Almost Never
- Broad Match is helpful to attract a less targeted group of people that may not be intentionally searching for what you’re offering. Using the modified broad match feature is often necessary to prevent unwanted ad spending.
- Modified Broad Match – This match type will still match keywords in the same manner as Broad Match, but you can require certain words be included in the search phrase by using the “+” sign immediately before the required word.For example, if you bid on the keyword phrase +Get Medical Insurance, Google will only match your ads to searches including the word Get, and then loosely match based on “medical insurance”. This may result in your ad being displayed for a search phrase like “get health coverage” but not “buy health coverage”.
- Phrase Match – This will trigger ads when someone searches on a specific phrase. For example, if you use the keyword phrase “chocolate candy,” your ad will display for “World’s best chocolate candy.” However, your ad won’t appear for “Chocolate Easter candy,” because “Easter” separates your keywords. Phrase match gives you more control with targeting than Broad match.
- Creating ads that are similar to the keywords your customers are searching. It can be helpful when targeting a select group of people without limiting your audience.
- Exact Match- This match only triggers ads when the exact keywords are typed in Google and in the exact order you specify. Exact match gives you total control over the triggering of your ads, and can be a great option for beginners targeting specific words.
- Limiting your ads to a highly targeted or niche audience. Gives you more control when your ads are being triggered in searches, while preventing unwanted ad spending. All beginners to AdWords should run only Exact Match terms until becoming more comfortable with the advertising platform as this will prevent wasting advertising dollars while learning how to use the tool.
Note: If you choose to use phrase or broad match types, it is absolutely necessary to include negative keywords.
- Negative Keywords
- Negative keywords allow you to block words and phrases from triggering your ads. For example, if you’re a home renovation business advertising the phrase “home improvement”, then you may consider blocking “TV series” or “TV show”. Or if you’re advertising the phrase “medical insurance”, you might consider blocking “international” if you’re selling domestic policies.
#3 Optimizing and Tracking the Campaign
Before you turn on your campaign, it’s important to set up conversion tracking to know which keywords and ads are generating sales. This will be incredibly helpful with optimizing your ongoing campaign, and is required if you want to later utilize the Conversion Optimizer. The easiest method for tracking conversions is to link your Google AdWords and Google Analytics accounts (follow the link for easy-to-understand instructions).
To see conversion data within the AdWords platform, though, you’ll need to install AdWords conversion code on your website. You can find instructions for doing so on the AdWords Help site. If you are not familiar with HTML code, have your web developer install the conversion code.
Now you are finally ready to launch your campaign! You can click here for a brief tutorial on how to enable and control your campaign status.
Your campaign will typically take 24 – 48 hours to be approved by Google, and then you still have some work to do. There are three main areas in a campaign that need maintenance to optimize your AdWords ROI.
1. Adjust your bids. You can adjust your bids based on several options within campaigns and ad groups. Here is a video on how to change your bids. Using a data platform such as Google Analytics will be helpful to collect information. Consider the following practices to optimize your advertisements:
- Device – If the audience you want to reach is more active on mobile, consider increasing your bid for mobile devices.
- Location – identify locations where the greatest number of conversions occur and then increase the bid.
- Time – Increase your adjustments for peak sales based on certain times and days of the week that are optimal for your business.
- Ad groups
- Device – Evaluate if your audience uses mobile vs. desktop and test both. Lower your bids on the least effective device.
- Topics – Enable bid adjustments based on gender, age and other demographics to reach a more targeted audience
- Interests – Bid on core interest categories closest to your target market, and less for complementary interests.
If your keywords are getting sales, but your average position is a high number, raise your bids to move up in the ad rankings. Even though you might pay more initially, your increased ad ranking can increase sales volume. If your keywords are not creating sales, consider doing the following:
2. Keep an eye on your click-through rate (CTR). Defining a good CTR is difficult because it depends on many different variables. It also impacts your quality score, and affects how much you pay per click. Generally speaking, the higher your CTR, the higher your quality score and the lower your CPC will be.
3. Develop an effective landing page. One of the most important steps in creating any online campaign is building a landing page relevant to the message of your ad. One of the worst sins of advertising with a highly targeted medium like AdWords is to run a remarkably clickable ad that sends a potential customer to your generic homepage.
Creating a landing page that directly and exclusively addresses the same content as the ad is crucial to the success of an AdWords campaign. For more information on how to create an effective landing page, read the article,“10 Easy Ways to Improve Landing Page Conversions,” published by Hubspot.
If you have a Google Analytics account, try A/B testing your ad’s landing page with a Content Experiment. Creating two different pages and testing the content of each will help you find what is most effective.
There you have it! You should now have the knowledge and tools to begin using AdWords. Don’t be discouraged if you don’t see positive results in the first month. As with many advertising methods, you will need to go through a process of trial and error. Consistently measure your conversion efforts and optimize towards better results to achieve your desired ROI.
For additional advice on running pay-per-click campaigns, read the article 5 Critical Mistakes That Can Kill Your PPC Campaigns by Wordtracker.com