Introduction: How does Google Adwords work?

Google Adwords is the advertising system from Google.
If you have a website you may well already be 'paying per click' for relevant traffic. But Adwords has come a long way in the past few years, and with the world going mobile there are increasingly awesome solutions for small businesses to connect with customers.

Introduction

Google Adwords enables an individual or a business to access their target audience through Google Search, YouTube, or through partner channels. In other words, people 'search', your advert appears as an option in the Search results.

And for those who are super up-to-date with what we think is coming next - think about your video ads appearing on Android TV.

If people find your advert to be appealing, then they click and find themselves at your website. This in turn costs you for their 'click'.

But how do you know the keywords for which people are searching? Well, this is where the Google Keyword Planner becomes an invaluable resource.

What is Google Keyword Planner?

As you will see in this video, the Google Keyword Planner Google Adwords allows you to access 'how many people' are searching for 'what' keywords, 'where' in the world and on 'what' devices as well. In turn, this will enable you to work out whether there is an audience already available for your keywords, or if you would be better off looking at alternatives.

You will also see the level of competition on each one as well - i.e. how many people are paying to advertise on a keyword. This leads us onto how Google Adwords operates as an auction for keywords i.e. you 'bid' on the ones you want.

But before we do that, you will need to set up a Google Adwords account, so here is where you can do that: Create a Google Adwords account and this will guide you through the first steps of choosing your country, creating ads, pricing etc.

But note that everything in this article can still be read/watched will help you understand it all a lot better.

Google Adwords bidding

This is the central feature to Google Adwords  - people 'bid' an amount on a keyword. This idea is generally known as 'pay-per-click' advertising, or PPC.

You may think that the highest bid wins e.g. and then they get the highest position in Google Search results, but it is not that simple. As Google is very much founded on the principle of the more relevant results being delivered to the person searching, you will find that 'click-through-rates' (CTR) and 'Quality Scores' will determine the bid price vs. the position you gain in Google Search.

As such, if your ads sit at the top of Google Search because you paid the most, but no one clicks them as they don't relate to the adverts you've written, you may find you don't stay there for long.

Here is a more thorough overview of how this all works together and some tips as well: How does Google Adwords work?

The concept of 'click-through-rate', or CTR, is one of the main ones you will want to grasp.

Putting it simply, if your advert is shown 1000 times, and 25 people click on your ad then you advert has a CTR of 2.5%. If you trial different adverts you may well find certain ones have a higher CTR, and in is possible your cost per click will be reduced.

You may like to think of it a little like a sales funnel...

How how would you like to pay for a new customer?

Here is a model I have used for almost 15 years that you may find useful.
Obvious to some, but still useful to so many people out there!

If you have your advert shown 1000 times, 25 people click on the advert displayed, then you have 25 visitors to your website.
(or 'calls' on your phone e.g. direct from mobile)

Note: using Google Adwords you can have different adverts pointing at different pages on your site.

But what do you want to happen when people visit your site, and in particular, that page on your site? Do you want people to phone you, fill in an enquiry form, sign up for a newsletter, or even purchase straight away? The answer to this question will be determined by the sales funnel you have in place for this part of your business.

As such, you may like to consider...

What is the outcome you are seeking from that action?

This is the first question I have in mind whenever I am chatting with anyone about business about marketing or business.

It clarifies the intention behind an action and can save a lot of effort going in the wrong direction.

Quick Example:

• a small/medium business wants a $1 million uplift in sales
• the average client value over a year is $1000
• so, keeping it simple, they need 1000 new clients to generate a $1 million

So, here is the question that I have found makes a huge difference:

How much would you be willing to pay for a new customer?

Let's say a person would pay $200 for a new customer (it could be $2, $20 or $2000 as it depends on your business)...

If you know this figure you can start build your marketing strategy around it.

Then you reverse it: giving you the target cost of acquisition

So, if you have 5 enquiries from a website and the marketing cost of those 5 enquiries is $40 each and you convert 1 into business = $200 to acquire a new customer

When you think of each marketing channel feeding into the sale funnel in this way, you begin to ensure everything is measurable.

Then you can have some fun doing the tests using Google Adwords e.g. different adverts, different styles of landing pages (i.e. dedicated pages with the outcome of converting business).

As such, you can tie in your Google Plus activity back into your Google Adwords campaigns as well.

You do this will something called 'social extensions' but before you can do that, you will need to set up a Google+ Page...

How to set up a Google+ Page:

Knowing it is the future of Google, you will find there are 'social' advantages to being on Google Plus. If you have a business with a physical location you will certainly want to be 'on the map' in the most up-to-date manner.

As such, you will probably want to set up a Google Local Page: full instructions on doing that in this article.

If you don't have a physical location, you will still want to look at setting up a Google Plus Page.
This video will guide you through the process...

Linking Google Plus Pages to social extensions in Google Adwords 

Once you understand the basic principles behind Google Adwords, you may well want to link your Google+ Page to your account. You do this by adding in 'extensions' and one to look in particular is called 'social extensions'.

As you can see from the screen grab below, you can add in extensions for 'reviews' (these are the 'stars'), and for followers that accumulate on a linked Google Plus Page/website. The principle being: people are more likely to click on an ad that has been 'socially endorsed' reviews from real customers, or buy having more followers than a competitor.

Which would you click? One with the stars, right?

 

So, why would you want to add in social extensions (they are default once you've connected your G+ page, website etc.)? The answer is all about 'click-through-rate' (CTR).

In one test, Cadbury found an increase in CTR of 17% when adding in social extensions to their Adwords campaigns: here is the case study from Google.

And a higher CTR is likely to lead to a lower cost per click, therefore saving your money on your Adwords spend.

In other words, the more 'social' your business is in this way, the more the benefits are likely to feed back into your Google Adwords campaign.

Once you have this done, you may like to look at building up the social evidence that people relate well to your products and services. This will include your followers, +1s, and reviews from many sources.

Adwords Express

Google's Adwords Express is a very straightforward way to getting going using Google Adwords.

It is focused on being for 'local businesses' i.e. when people are searching for your service within e.g. 25 miles radius.

It does not require as great an understanding of the more full Google Adwords system.
As such, it is a great entry point - you can have adds appear for you Google Plus Page or your website.

Conclusion

Google Adwords has transformed how people can connect with potential customers. With Google Plus you will find the 'social' feedback will add an element into how people do business online - when people click a +1 button they are publicly saying "I relate to this", and if they give a review they are giving even more of their opinion as well.
Google Adwords is, in my view, an essential part of the marketing mix.

Want to know more? Contact me here!

Image credit: Define and Achieve Success with AdWords - (Google Video)

 

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