Google AdWords is the world’s largest online marketing channel, earning Google over US$43 billion each year. It makes it difficult to look past such a huge marketplace and not give AdWords a thought. The first thing people want to understand is how can they tell if their campaign is working or just burning through their budget? You could just play it safe, spend $1 per day and see what comes out the other end.
You would be surprised how many people do this but with most clicks costing you at least $0.20 (industry dependent) your money won’t go far and you’ll see little to no improvement for your business. On the other side of the coin, there are business owners who swear by the technology and are making a small fortune through it. So how do you know if your campaign is working the way it should?
The first thing you should do is make sure your AdWords account is linked to your Google Analytics. This will give you more data to work off than what the AdWords dashboard currently provides. If this is working correctly, you should see data coming through on your AdWords traffic. Study it closely:
- How does your AdWords traffic compare against your other site traffic? This could be the first indication on how well your AdWords campaign is going. If your site’s traffic is poor then perhaps instead focus on the metrics of your AdWords traffic itself, such as bounce rate, time on site, pages viewed, conversions and more.
- Do you have campaigns which are costing money while producing very little? If so, you may need to re-distribute funds to other ad groups or turn the ad off completely. Your ad click through rates should be at least 2% anything less is not working for you.
If you use Google’s Keyword Planner to help you choose keywords, avoid paying the recommend price for your keyword clicks. The price recommended by Google is the top dollar to have your ad at the top of the list with minimal work. Instead, go half way and focus on improving your ad quality score. You can find your ad’s quality score by clicking through to your ad and holding your cursor over the quotation image in the status column. Google’s policy is to show good quality ads at the top of the list and everything else below it.
However, as I mentioned before if you are willing to pay top dollar you can usually buy your way to the top. A good quality score is 7/10 or higher; anything less you need to improve on. Google will provide recommendations to you on how you can do this (it pays to follow Google’s recommendations). The higher ad ranks get the top positions. The cost you pay per click will be determined by the ad rank of the next highest ad below you divided by your Quality Score. So those with high Quality Scores get higher ad ranks and lower CPC (as shown in the diagram below).
So if you want to get to the top, you can either pay a lot… or you can work with Google’s best-practice guidelines and dominate the rankings while paying less than your competitors. Talk to Mogul if you need any guidance with your Adwords campaigns.