The Google AdWords program is the centerpiece of Google’s internet marketing product line.  Free to use and easy to setup, it affords advertisers anywhere in the world to generate targeted traffic to any web property they designate.

One of the main features that people like about AdWords is that it’s free.  But that’s also one of the pitfalls.  Since anyone can setup an account, and you don’t have to know what you are doing, it is very easy to throw away money with pay per click at an astonishingly fast pace.  So this begs the real question, what is the real value of Google AdWords?

Benefit #1 – Instant Visibility

AdWords offers website owners the chance to establish true validity, along with online awareness and marketability. Let’s say you just launched a new website and wanted to have it show up in front of potential customers immediately, AdWords is the single best tool for accomplishing this.  Advertisers also use pay per click to gain visibility for things like new products, announcements, special sales or offers, and similar items that they may not rank well for in organic listings.

Sample PPC (Pay Per Click) Ad

Benefit #2 – Traffic & Leads

The sexiest benefit of Google AdWords is that is can generate immediate traffic, which can potentially increase the number of leads your business is getting.  It’s not unusual for advertisers to earn good, valid business leads within a few hours of launching a campaign.

Benefit #3 – Benchmarking

Savvy marketers use AdWords to create performance benchmarks for their website.  Because you control your bids, you can monitor the performance of keywords and use that data to create long term SEO strategies that can turn your paid keywords into natural rankings.   As a form of pay-per-click advertising, Google AdWords is a vital component of any search engine-marketing endeavor.

Drawback #1 – Buyer Beware

As stated earlier, Google AdWords can be scary because while it looks simple, being good at it takes time and practice.  After all, why do you think they created a Google AdWords Certified Professional program in the first place?

For instance, the simple act of bidding and placement is more complex that it appears.  If you bid higher than the competition, logic tells you there is a good chance you will earn higher placement for ads and keywords. But this is not always the case, as Google has a “Quality Score” which is generated based on how well your keywords, ad and landing page perform.

Drawback #2 – Long Term Sustainability

The other issue with buying visibility is that once your budget runs out, your ads stop appearing.  So over the long term, it is very important to figure out the key metrics from AdWords to determine your actual ROI so you don’t keep paying for advertising that isn’t producing the results you need.

The secret to determining “real value” – Google Analytics

In order to determine the real cost of Google AdWords, you have to base your decision on the actual results and performance.  And the best way to do this is via Google Analytics.

With any successful online marketing campaign, web analytics plays a pivotal role. These statistics allow you to monitor daily, weekly, monthly, and even yearly web traffic rates. At the same time, it displays the number of hits that were generated via precise keyword and key-phrase searches and links.

If a particular set of keywords is not attracting web visitors that are converting into customers, subscribers or whatever goals you set, it is time to make changes to the campaign settings. You also have to concentrate on the keywords that are working well, while generating several variations and synonyms as well.

You can learn more about Google Analytics in one of our previous posts.

You Determine the Real Value

According to Avinash Kaushik, who wrote the popular book, “Web Analytics”, Google AdWords is a cost-effective solution to online marketing. Along with strategic SEO and advertising techniques, companies can effectively showcase their brands and products to mass audiences.

The real cost of Google AdWords, however, depends on your situation.  If being on the first page of Google for targeted phrases is of value, than you should have no problem coming to your own conclusion!

If you are looking for traffic to your website, there are few tools better than Google AdWords.  But before you get started you really should get a handle on making sure you know how you’re getting the best Google AdWords bid price possible.

You see, one of the beauties of Google AdWords is that it’s free to use, and doesn’t require an agency to manage it for you.  But that’s also one of the drawbacks. After all, if you were to negotiate your own TV ad rates or billboard rates without an intermediary, how do you think that would end up?

This is the basic problem most people encounter when they start on AdWords – figuring out what to set as a fair bid price?

AdWords Basics

The first that you need to know that AdWords is a pay-per-click service so when your ad appears, you are charged every time someone clicks on your ad, not when it appears.

This is a major difference between actually paying for clicks and paying for impressions (display advertising)!

The amount you are charged is your winning Google AdWords bid price. Therefore, you want to keep it as low as possible. But you still need to bid high enough to ensure that you actually get the click – which means your ad position needs to be high enough so the user sees it.

Determining the right bid price

Trial and error is one way to figure it out; many have done this, which is at least partially why Google’s stock price is so high.  But the secret to understanding what you need to do, to get the best Google AdWords bid price, is understand how the bidding process actually works and then putting that knowledge into action the next time you bid.

The bidding system that Google employs is called a Vickrey auction; named for American economist William Vickrey, the auction is a sealed-bid auction, in which bidders submit bids blindly. When the auction ends, the highest bidder wins as in any other auction, but unique to the Vickrey auction, the winner only pays the amount of the second-highest bid made. According to Vickrey the knowledge that you will pay less than you bid, provides the incentive to bid your high-end price or true value of the item.

Taking this method and moving it into the virtual economy, a Vickrey auction benefits the advertiser by increasing the value of their ad dollars (pay less for more) and benefits the seller (in this case Google AdWords) by ensuring that more advertisers will invest their dollars with their service and they will make more in volume rather than price per unit.

Therefore the strategy would be:

• Tommy wants the keyword ‘roofing’ to promote his construction business and so do Kyle and John.
• Kyle bids $1, John bids $1.25 and knowing the he’s bidding in a Vickery auction, Tommy bids $2.25.
• When he wins the auction, he will pay only the $1.25 bid John made plus one cent for a total of $1.26 or the AdWord. This saves Tommy $.99 per click.

There is of course always a risk when utilizing this method of bidding, in that you are not alone in the knowledge of how they process works and so there is a risk of having to pay more than you want to. Let’s look at our construction business owners again.

• This time, Tommy wants the keyword ‘siding’ to promote his construction business and again, so do Kyle and John.
• Kyle again bids $1, but John has learned the system and bids $2.15, knowing he did well the last time, Tommy again bids $2.25 and wins again.
• This time however, he will pay $2.16 John’s bid plus one cent for a total of $2.16 or the AdWord. This time Tommy only saves $.09 per click. Of course the other way to think about it is that it costs Tommy $.90 per click.

Other considerations:  Desired ad position

Sample PPC (Pay Per Click) Ad

Another major component of choosing the right bid price is having a better understanding of ad positions.  Ad position refers to the spot on the page where your ad appears.  So while vanity or ego might compel you to shoot for the highest price for a bid, most Google AdWords professionals would tell you this isn’t always the best practice.

Here are a few considerations:

• The #1 ad spot is the most expensive, meaning you will get the fewest clicks for your budget
• Placing bids that place your ad in spots 2-4 will gain significantly more clicks while still keeping your ad visible above the fold
• Bids that appear low on page 1 will have trouble getting clicks, and are considered lower value as users may not take them seriously due to the low ad position

Our recommendation: shoot for spots 2-4 on ad position.

In Summary

So, it’s plain that while the benefits can be great for your business if you get lots of clicks, it can be a two edged sword. If you end up paying a high price per click, it can eat into your ad budget quickly and significantly. But if you watch for trending keywords and find ways to tie your business to them and make smart bids, you can rest assured that you know that you’re getting the best Google AdWords bid price.

After reading this blog post, if you still have questions about Google AdWords or would like help, please contact us today via email info@mywsiconsultant.com for a free consultation.

Google Market Finder is a terrific free tool designed by Google which allows users to take a look at local monthly search volumes for specific locations. It also includes the costs of targeting particular keywords in every market, including foreign ones. This has been very beneficial in terms of growing our business on a world-wide basis.

Find New Markets

The free Google Market Finder tool uses world-wide Internet search data to reveal the number of times that keywords are searched for, in 56 different languages. We use the tool to see where consumers search for our products and services. Then we evaluate the new potential markets by comparing the local search volume, estimated keyword price and the competition for each keyword in all markets. This is really helpful in planning our marketing budget for the best results.

Here is an example of how it works:

Let’s say your company manufactures a cool line of sunglasses and you are interested in selling them outside of the US.  And let’s say (just for example) that you had several Spanish speaking employees and could support new business from Latin America.

You could use the Google Market Finder tool to search this type of query, and the results would look something like this:

Translate Key Words

Now that you have identified the countries that had the highest search volume for the phrase “sunglasses” you could use the free Global Market Finder tool to automatically translate our keywords into the language of our choosing (in this case Spanish), for all of our new potential customers. Using the tool, we can also see where people are searching for our products and services. Then we can narrow it down to specific locations to target in our online marketing plan. For this reason alone, it is an invaluable service, since we are not fluent in other languages. We would actually need to hire someone to do these translations, which would be quite costly. By knowing where our target audience is, we can best take advantage of the world-wide marketplace to expand our business and take it to the next level.

Use With Google AdWords

Google Market Finder is particularly effective when combined with Google AdWords. The free Google Market Finder tool showcases all of the estimates of a suggested keyword bid, as well as the competition for each Google translation for that specific target market keyword. In this way, since we are already using a Google Adwords campaign, we can use the Google Market Finder to choose a precise location and language with which to display our ads.

Access to All Marketing Media

The Google Market Finder can be used as a powerful marketing tool to help reach our potential customers on a worldwide level. Used with ad formats such as search engines, mobile devices, video and TV, this tool is extremely helpful in targeting exact marketing locations to find the best audience for our business products and services.

Why would you use PPC or Display Ads?

If you are seeking to improve online visibility, there are several good options for accomplishing this with paid advertising.  Generally speaking, with paid advertising you are either paying for direct clicks, or paying for your ad to show up in front of interested parties.

PPC (Pay Per Click or Paid Search Advertising)

This type of ad is “pay for performance” meaning that you only incur an expense when someone clicks on your ad.  These ads are setup to bid on certain key words and phrases within a geographic area that you designate.  PPC is most often used with new websites that may be lagging behind competitors in terms of search engine optimization.

Sample PPC (Pay Per Click) Ad

Pros of PPC

• Immediate impact – usually visible within 2-3 days of campaign launch
• Pay for performance – you pay only for clicks, not impressions
• Placement control – you have control over which keywords you bid on as well as what search engines.  You can also control which landing pages visitors will land on.
• Branding – even though a user may not click on your ad, it will still be displayed in search results which increases the number of times a user may be exposed to your brand.

PPC Drawback – Because it is paid advertising, once your budget is exhausted your website may not be visible to users in the top results for your targeted words and phrases. That doesn’t mean your website is not accessible, it only means your site may not get as much traffic because of lower position in the searches.

Display Advertising

Where PPC ads show up on search engines like Google, Yahoo and Bing, display ads show up on individual websites.  A key difference from PPC is that you pay per impression rather than click, which makes it harder to link display ads to direct results (clicks, actions, etc).

Sample Display Ad

Display advertising works on 2 important principles:

1. Contextual interest – your ads will generally be placed on websites with pages that have topics that are related to your topic.  In other words, a display ad for fishing might appear on most pages of a fishing related website, but could also appear on n individual page within a travel related website that was specifically related to fishing.
2. Geographic location – advertisers have the option to only have their display ads appear in front of users whose IP addresses identify them with a certain geographic location.  For instance, a web visitor to Yahoo.com from Florida might see a different set of ads than a user from California.  This technology is not perfect, as some users hide their IP addresses, and others show incorrectly.  However, it does prove to be reasonably accurate and successful.

Pros of Display Advertising:

• Pay for impressions – you pay for a block of impressions (usually by thousands) for your ad to show up in front of a targeted web visitor.
• More room for creative messaging – display ads are larger and allow for creative messaging, special offers, moving graphics, etc.
• Targeted interest – Display ads show up in front of users on individual websites that may or may not be using search engines like Google to read up on their topic of interest.

Drawbacks to Display Ads – because you pay per impression and not per click, demonstrating ROI from display ads can sometimes be difficult.  Display ads should be used as branding tools with expectations similar to other forms of display based advertising – that is to create awareness of your brand where it might have otherwise not been seen.

The one digital marketing acronym everyone should know

SERP stands for Search Engine Results Page. When you type a phrase into Google or any other search engine, the results for that search appear on a new page in your browser. This is the SERP, and for businesses concerned with online marketing, being on the first SERP is one of the top priorities.

Why it matters to businesses

Let’s face it, who looks past page 1 for anything on Google? If a customer has to go to the second page of results to find your website, they are far less likely to find you or to conduct their business on your site.

What a typical SERP looks like

On the SERP, you will see three types of results.

• On the left side of the page is where one can find natural or organic listings, those which are placed there because the search engine finds them to be the most relevant to your search terms.
• Above those are the sponsored links. Companies pay the search engine to be placed in these positions.
• On the right side of the page are the paid advertisements, the PPC ads.

Which is the best place for my business on SERP?

Everybody wants to be #1 on Google for their dream phrase, but sadly everyone can’t be first. Even so, there are strategies for placement on search results pages that may benefit you such as occupying multiple positions on the page. Today we look at sponsored results, regular organic results and local results as 3 opportunities to show up on the page. Stay tuned to future blog posts to learn more about this.

Internet marketing 101

Businesspeople often say that they feel that they are wasting money on advertising but that they are not sure which money is being wasted and which is translating into profits. In fact, John C. Penny (JC Penny Founder) once said that half of his marketing money was wasted, he just wish he knew which half.

Now that much of the budget for marketing pursuits is devoted to online marketing rather than tangible, traditional advertisements, it can be nothing short of overwhelming, especially for time strapped business owners and managers.

The shift to online from traditional media

The popularity of Google has changed the way potential customers find companies and select products. For most people, the process starts online with a search. This has resulted in a complete change in the way marketers approach sales techniques to reach potential clients.

Here are some terms that will help you understand online advertising as it exists currently, in the world of social media and Google:

• SEO stands for Search Engine Optimization. It refers to the way a website is built and positioned in order to be seen and ranked highly by popular search engines.
• PPC stands for pay per click and refers to a type of advertisement that can be placed on Google. Customers pay Google a set rate for each person that clicks on their ad.
• Social media and social networking refer to websites dedicated to connecting people for various purposes, whether it is for fun, business, or potential collaborations. Websites such as Facebook, Twitter, and LinkedIn provide unique opportunities to connect with other businesses as well as your customers.

Where to start?

If the shift towards digital marketing has you stumped, you are not alone. The most effective online marketing approaches incorporate each of these three components into a comprehensive plan that reaches consumers where they are, in any and all of these places. This is something that is hard, if not impossible, to get “out of the box” so to speak and requires careful planning and work to get the results you want.

Google changes highlight color for AdWords (again)

As if their stock price alone isn’t enough to impress you, you have to admire Google’s sense of adventure.  Through the years Google has proven time and time again that they are willing to “tinker” with their product in an effort to make it better.

Sometimes the changes work out for the better, but other times there is a revolt and they quickly put things back as they were.  Do you remember the Bing inspired background image fiasco a few months ago???

In the last week, we noticed that Google has switched their highlighting for AdWords from yellow over to pink.  My guess is that part of the reason is that on many computer monitors – the yellow was somewhat washed out and hard to see and this new pink color has higher contrast and is definitely more noticeable.  We’ll see how long they keep it!

May 2010 – Sample Google AdWords Screen

July 2010 – Sample Google AdWords Screen

Why does Google highlight AdWords?

Google has traditionally highlighting their ads or “paid” listings in order to separate them from their natural, or organic listings.  This is for 2 primary reasons:

1. Let the user know the results are different – we have come to trust the natural or organic listings and Google wants us to know that the highlighted listings are not included.
2. Highlight the advertisers – The Google AdWords program is one of the main reasons Google has done so well financially.  So it’s no mistake that Google wants you to see the ads their advertisers put up and click on them.

If you would like to learn more about Google’s AdWords programs or get help managing your online campaigns, contact WSI today.  We are certified in the AdWords programs and can help you get the most out of your PPC budget.