The Final Word on AdWords

AdWords is not the end-all-be-all to your traffic strategy.  It is one piece of what should be a diversified pie.  If you find yourself depending too much on PPC, then you need to make sure you’re building out other traffic sources while still optimizing and improving your AdWords strategy.  AdWords can be extremely profitable if done right, and can be a complete money pit if done poorly.  On I, we see ROI in the hundreds of percent.  If we’re spending $10 getting a visitor to purchase something, we’ve pulled in $30 or $40 at least.

The beautiful thing about AdWords, and how it fits in so nicely with the Prosperly Way, is the fact that it doesn’t require you to be there for it to be doing work.  You set things up (which may take several hours, even several days depending on your goals and market) and then from there it’s just a lot of tweaking.  You tweak, you go play golf.  You tweak, you go play with your kids.  You tweak, and maybe you go to your day job.  At the end of the day you’ll (likely) have your results and you tweak again.  Remembering all along that those little tweaks are making you hundreds, even thousands of dollars.

AdWords Resources

Here are some resources I’ve found to be invaluable in making AdWords extremely profitable:

Tools

Expanding Your Skillset (if AdWords will be a key component of your traffic strategy)

Definitive Guide to Google AdWords Perry Marshall is the leading expert on taking your AdWords skills to the next level. I run very profitable campaigns, and a few of his strategies have truly put them over the top.

Testing for Maximum Profits

If you can’t measure it, you can’t manage it.  At least that’s how the saying goes.  That couldn’t be more true than when it comes to your AdWords campaign.  You absolutely must determine the metrics you care about and optimize your ads, refine your keyword phrases, and monitor results consistently.

A few items that you absolutely must have in place:

  • AdWords Conversion Tracking
  • WinnerAlert (www.WinnerAlert.com)


AdWords Conversion tracking is built in to the AdWords system.  You simply place a snippet of code that Google gives you into your “success” page, whether that be an order receipt, a confirmation page, etc.  When that code is run, Google will know that a conversion has taken place and will send back the necessary information (which keyword in which ad group at what position and CPC, etc.).  Running AdWords without conversion tracking is literally like driving blindfolded.  Yeah, you may get there eventually, but it’s going to hurt.

WinnerAlert is a light little web-based program that automatically checks your ads and, when there’s a statistically significant difference, emails you an alert letting you know which ad is the better performer.  This will save you countless hours of going in manually, and checking the ad results one ad group at a time (often to find that you should wait longer, or at least not knowing what difference is statistically significant).  If you’re serious about running a PPC campaign, WinnerAlert.com is an absolute must.

Choosing Your Metric

While it may rarely make some sense for some campaign’s success to be measured by something different, usually the best metric to focus on is Clickthrough Rate (CTR).  If you have a high CTR then your traffic metric is obviously high.  Also, if you have a high ad CTR and a relevant landing page for that ad, it’s highly likely that your conversion rates are also very high.  If the landing page is right, conversions follow CTR very closely.  For the purposes of this guide, and were you to work with a Prosperly coach, you’d be focusing on CTR.

Relentlessly Test

It may seem small, but boosting your CTR .5 percent, from 1 to 1.5% can be huge.  If you’re working with a higher traffic keyword that gets 1,000 clicks per month, you’d end up with another 500 clicks, or more than 15 visitors per day from a simple .5 percent increase.  Those extra 15 visitors would likely mean an extra sale per day, or 30 extra sales per month.  If your product has a $40 margin, we’re talking about an exra $1,200 of income per month for getting your CTR to go up a measly .5 percent!  Testing is worth your time!  If you’re not spending at least half of your PPC time creating tests and evaluating results (then creating more tests) then you’re leaving profits on the table — guaranteed.

It’s the Little Things that Count
With some of my own sites I’ve seen the smallest changes bring very positive and lasting results.  For instance, in one ad I was running the basic description was “Don’t buy anything until you read this report” (that was the gist of it, I don’t have the ad copy in front of me).  I changed it to “Don’t buy anything until you read this report…” and saw the CTR increase 17% (from .6 to .7 percent – this is a low CTR overall, but it’s highly competitive, so I was happy with the boost).  That one little change directly resulted in $800 more revenue per month.  I’m not even including the lifetime value of the customer, which is obviously much higher.

Consider the following elements to test, but don’t limit yourself to this (or any) list:

  • Ask a question.
  • Use a very, very short ad.
  • Focus on the visual aspect of your ad (have it form an arrow to the right or left).
  • Use specific numbers (10 days until… I made $814… Failed 9 times… Served 1,024 clients).
  • Change capitalization (in everything, including the destination URL).
  • Remember to use powerful words that evoke emotion.
  • Show your pricing (watch CTR and conversion rates here, it may be you filter out a lot of non-purchasers and your conversion rate increases but your traffic drops too low – you’d rather have 10 visitors each making you $3 than 2 visitors making you $10).
  • Cut all extraneous words!
  • Try different calls to action (Order/Buy/Try Now!/Now./Now/Today!/Today./Today)
  • Split your keywords into more Ad Groups and get those specific keywords into each ad so they’ll be bolded when a user has searched them (I saw my CTR drop for what became a trademarked term from 2.8% to .5% — all because I couldn’t include the actual term searched in my ad.


Again, this list is by no means exhaustive, but you get the idea.  Small changes can have a significant and lasting profitable effect on your business!

Test! Test! Test!

Bidding and Position Strategies

Your bidding can be set as high as the campaign level, all the way down to a specific keyword phrase.  If you find that “mac icon converter” is converting at a much higher rate than “free icon converter” then it may be in your best interest to bid yourself into a higher position for the “mac icon converter” phrase.  If, on the other hand, you have a keyword that is losing money, it may be time to lower that bid and pick up less traffic.

Contrary to popular belief, it is not always more profitable to be in a higher ad position.  Depending on your chosen niche, being in the top two (or even three) positions (usually above the organic search results, but not always) may convert worse and cost more per click.  For instance, here we have an example of the search results for mortgage loan. 



For the mortgage loan industry, it may be more profitable to be listed first, but my instinct says that what we’re seeing here is more of an ego display than anything else.  When a consumer is shopping for a mortgage you would hardly call them a “casual” shopper.  As a result, the person is probably shopping around quite a bit, clicking on multiple advertising listings before finally setting down and filling out a lead generation form.  These shoppers are doing research before they make a decision and conversion rates in that situation are usually to be found in the 3-4 or 6-7 positions.

Take a different industry, where you do truly have a casual shopper – ringtones.  Ringtones can be purchased with a few clicks, they’re very cheap, so there’s very little research to be done by the consumer.  As a result, conversion rates may be very high in the positions above the organic results.

Remember, just because you’re in the top position doesn’t mean you’re maximizing your profits.

Now when you work on bidding, make sure you set your campaign option to have you manually do the bidding instead of having Google do it for you.  This will allow you to tweak, fine-tune, and really get to know your market in that area.  Your bid is the highest you will pay and may not represent what you are actually paying.  The true metric you care about is the cost per click (CPC).  If you always stay cognizant of your CPC in relation to your revenue per click, you’ll be just fine.  We’ll talk more about these metrics when we get to testing.

The key with bidding however, is finding that sweet spot where the bid is just right and you’re maximizing whatever metric you care most about.  Drilldown your bidding as necessary to that keyword phrase level.  If that’s not needed, then the next logical level will be at the ad group.  It is highly unlikely that you’ll find it sufficient to manage your bidding with one single bid across all of your ad groups.  Ad groups can have very different markets to them, even if you’re advertising the same product.

Quality and Bidding

Google protects the quality of their system with a vengeance.  If you’re out to hurt the consumer in any way, you shouldn’t be reading this guide and you won’t last very long on Google.  They introduced a quality score a while back, which helped cut down on various abuses substantially.  Don’t be worried about Google if you’re always doing things that put your customer first.

Your minimum required bid is based on the quality of your ad and the quality of the landing page you send visitors to.  If quality is low, the minimum bid will be higher.  However, if quality is high, the minimum bid will be much lower.  It’s quite possible for you to bid lower than your competition and be in a higher position because your ad is relevant (which results in higher clickthrough) and your landing page is relevant (which results in a higher quality score and more conversions).  Always bear in mind that Google is after quality.  If you give them quality, they will help you out quite a bit–and you’ll be more profitable.

Leveraging the Content Network

Google’s content network is made up of independent websites that publish Google ads (called Google AdSense).  Relevant ads are served because Google crawls the content of each page serving ads and determines which ads are fitting.

The content network is great to increase exposure.  Some of my ads have great conversions on the content network.  When AdSense was first launched, a few shady website publishers were being advocating clicking on their own ads, running rather elaborate (lame) operations to run up their AdSense earnings.  Google quickly caught on and the click fraud, as it’s called, has dropped.  However, it’s still a concern for running ads on the content network.  If it’s fraud, you’ll be paying for clicks from people that don’t care a thing about seeing what you have to offer.

To protect yourself from poor results in the content network, I highly recommend separating your campagins into content and google search.  We simply mark each of our content campaigns with a ‘ – c’ at the end and it’s done.  In that way, impressions, CTR, conversions, etc. don’t become intermingled.

Your content network ad strategy must differ significantly from your google search ads.  Remember, people that see a content ad are not actively searching, they’re reading or viewing.  Your ad needs to really have some teeth and pull them in in order to have a reasonably decent CTR.  The flipside of a lower CTR that I’ve found is that the conversion rate seems fairly it’s high.  My own experience has shown me (at least in two marketst that I’m thinking of specifically) that a person clicking on a content network ad really wants to see what you have to offer, or they wouldn’t have left what they are doing.  In the end though, it’s all about testing different approaches in the content network to see what works in your desired market(s).

Campaign Management

The following campaign settings are important enough to discuss on their own.

Budget – if you’re profitable, it makes no sense to limit your budget!  What’s nice is that you pay for your ads after they’ve listed, so you’ll be able to pay for those ads with the sales revenue they generated.  Many businesses need a line of credit to pull something like this off — not when you’re doing it with Google’s AdWords.

Delivery Method – if you’re finding that certain times of day are better for conversions, CTR, or both, then by all means you should attempt to force as many ads into that more profitable time slot (discussed in more detail in a second).  If you don’t really notice a difference or if you’re marketing all over the world, then showing them evenly is fine.

Automatic Matching – this is a fairly new feature that allows you to show your ads on search queries where you didn’t have a keyword.  Google does it automatically by analyzing your campaigns ads and landing pages and determines if your ad would still do well under the matched query.  They shoot for at least matching your CPC/performance.  The key here is to determine if this is working for you and, if it’s not, turn it off.

Keyword Bidding – you have four choices here:

    1. Manual bidding – recommended for maximum control
    2. Conversion Optimizer – if you have a high enough number of conversions, you can have Google do the legwork for you and stay under a certain cost per conversion.  Not recommended.
    3. Budget Optimizer – You simply set a 30-day budget and Google tries to get you as many clicks as it can for your keywords within that 30-day budget. Not recommended.
    4. Preferred cost bidding – You simply set the average price you’d like to pay and Google will do the rest.  We don’t like this because you may be willing to pay more for a specific ad group, or even a specific keyword phrase.


Ad scheduling – if you’re selling an ebook on battling insomnia, you may find your conversions skyrocket between 12 and 5 a.m.  If you’re selling ringtones (school-aged kids) then running ads while most all of your audience is sleeping is probably not going to be too profitable.  If you’re running a business that has to answer phones, you may find it much more profitable to only run ads during your business hours.  Ad scheduling ads an element that certainly needs to be managed, but it can plug leaks in your budget and help you exploit very profitable opportunities.

Position preference – allows you to specify which ad position you’d like and Google then does the bidding for you.  I prefer the more-control route and leave this option unchecked.  However, if you’re finding your conversions are significantly higher in a certain range of ad positions, it may be profitable for you to work with this setting.

Ad Servingdo not choose to Optimize and show better-performing ads more often.  If you do this, you aren’t able to splittest effectively.  Make sure you’re showing your ads evenly over time by checking the Rotate option.