To some, Google AdWords offers a great opportunity to get their brand and products out to potential customers. Most do so at an affordable margin. However some seem to struggle; the ‘Cost-Per-Clicks’ (CPCs) are too high, the overall costs of AdWords are too high and there just is not enough sales or revenue being generated. This guide will address some of the common issues marketers will face and how best to approach them.
Google Loves Quality
It’s true! Google focuses on offering users the most relevant and reliable information, if you help Google in its cause then it will repay you with better Quality Scores (QS).
Quality Score is a ranking system out of 10 within AdWords which rates individual keywords based on several factors, but the main one to focus on is the relevancy between the keyword, the ad copy and the landing page.
Hint: Have ad copies which include the keyword(s) you are targeting, and ensure your landing page has relevant content relating to the keyword(s).
You should aim to have a QS of 6 or above, obviously the higher the better. Higher QS means you have to pay a lower CPC than competitors. A simple example: if your QS is 7 for a specific keyword, and a competitor has a QS of 5, then they may have to £0.60 for position 3, whereas you may only have to pay £0.50.
Now this may not sound much of a saving, but remember that small CPC savings across multiple keywords and across all the clicks they receive will start to add up. The idea is to think small, micro manage CPCs (if possible) and don’t disregard small CPC increases as being harmless. They can impact your total costs, if not in the short-term then definitely in the long-term.
It’s easy to think that more keywords on an account will mean greater chances of getting sales, and that might be true – but what is not necessarily true is that the profit from having all those keywords will be good enough to meet your margins. More keywords mean more costs. Not all keywords will repay the cost of having them back with a positive ROI (Return on Investment) or CPA (Cost-Per-Acquisition/Sale), some will cost you money. There are some steps you should take when expanding the number of keywords on your account:
- Do not put too many in at once.
Too many keywords at once mean more costs. If you are running on a limited AdWords budget then the best approach is to take a proportion of keywords and give them a proper chance to perform and discover if they work or not.
Hint: Your keywords should get 1 click for every 100 impressions. And for every 100 clicks they should get 1 conversion. That should be a good way to assess if a keyword is performing well.
- Use Negatives.
Negative keywords are a great way of saving costs. It lets Google know what sort of keywords you do not want to be shown for. If you’re a retailer focused on targeting consumers lower down the buying process then you may want to negative out ‘reviews’ or ‘second hand’ if you only sell new items.
Hint: Be careful with the match types you use for negative keywords as you may block out relevant searches.
- Search Term Reports
Make sure to do this routinely as part of your optimisation. Search Term Reports are a great way of finding new negative keywords, but also new keyword opportunities. In general, you want your AdWords account to become more focused on Exact match type keywords. Exact match keywords usually have lower CPCs and you can control them in a much greater sense than you can with Phrase and Broad.
Rank It, Bank It
Many people have an obsession with being number 1 or in the top 3 for paid search, but that’s not always beneficial. Higher positions demand higher CPCs, and the only way it will work for you is if your site’s conversion rate is good enough to convert the more expensive clicks and stay in line with ROI targets.
Showing in lower positions is not a bad thing. You pay lower CPCs, and therefore have lower costs as a result. The main thing you lose out on is actually time, not volume. Someone in position 1 may get 1000 clicks in two hours, whereas it may take you two days.
As they say ‘time is money’. Being a bit more patient can improve your ROI and make AdWords viable.
Cost Per Sale or Return On Investment
There are various ways to measure AdWords success. Some go off the number of conversions within a specified budget, in which case they will be looking at the cost per sale (we often we refer to this as the Cost-Per-Acquisition, CPA).
CPA is preferable for enquiry leads, as you can put a figure against something which can be hard to value. However it is not the best measurement for e-commerce sales. Reason being: you can sell something for a ‘high CPA’ but in reality that sale actually generated a high revenue income, and you still made a profit and not a loss.
Don’t forget, when you evaluate success in digital, look at your advertising from a number of different angles. Analytics provides an accurate and free second opinion when evaluating the success of your marketing. It may be that it’s not PPC which is suffering, but all online channels may suffer because of a poor site – at the end of the day PPC will get you traffic, but it is ultimately up to your site to help close the deal.
Sum It Up
Focus on relevancy, help increase QS scores, use negatives to exclude unwanted costs and be patient in those lower positions if you are struggling with AdWords costs and profitability. It can be a complicated procedure to implement but if you take each segment at a time and then ‘sum it up’ the results should be a pleasant change.
If you are struggling, then let us give you a free audit of your account and manage your PPC account so you’re making money on AdWords.