Why Google Adwords Could Very Easily Be Your ROI BFF!

Why Google Adwords Could Very Easily Be Your ROI BFF!

Please welcome Guest Blogger Gary A Sanchez to Greta Weiner Digital.  Gary’s blog deals with Google Adwords.  

Head-shot-cropped “Hi, my name is Gary Sanchez.  My closest friends call me Cheese.  I’ve been building sales and profits for businesses for many years as a marketing manager and director.  I recently moved to Albuquerque and I’m now a freelance marketing consultant who helps retailers and restaurants grow traffic, sales and profits.  My vocabulary doesn’t include the word “manana.” Why wait until tomorrow to get stuff done?”

http://www.garyasanchez.com/

If you like this post and want to read more, check out my most popular blog post ever: 9 Benefits of Sales Promotion [http://www.garyasanchez.com/9-benefits-of-sales-promotions]”

 

Why Google Adwords Could Very Easily Be Your ROI BFF!

By Gary A Sanchez – Guest Blogger

wordstream

There are two narratives about the rise in search advertising, and in the rise of Google from a startup earning revenue of $70 million in 2001 to $60 billion in 2014.  The one that you are most familiar with is that consumers have changed how they spend their time with media,  and mediums like newspapers have declined in readership.  As a result advertisers are just looking for ways to keep in front of their desired audiences.  But that narrative is pre-social Copyblogger understanding.

For those of you who aren’t familiar with Copyblogger, it is a website founded in 2006 that was one of the first to understand and advocate that the way to market on the internet is practically identical to the way old time copywriters, such as Claude Hopkins, Gary Halbert  and John Caples, did combining the art of copywriting with the principles of direct marketing.   See examples here:   http://blog.crazyegg.com/2015/07/08/direct-response-copywriting/.

The second narrative is that search marketing makes more sense than any alternative because it is both highly targeted and highly measurable.   One of the greatest reasons internet marketing is super-duper-fantastic-awesome-sauce is because (at least theoretically), everything that happens on your website is measurable.  If you can measure an action or behavior, you should be able to manage that action or behavior.  Fundamentally, that’s exactly what marketing is … it’s being able to persuade people to take the actions that you want them to take.  For most online businesses, the main way you sell a product or service is to find a group of people who are on a website and move them from where they are to your own website (or a website that you manage).   Once you get them to your website, the way you persuade is usually via text, graphics, photos or video.  It’s pretty basic stuff when you think about it.

If you can measure it, you can manage it.  If you can measure it, you can also calculate a return-on-investment.  When your ROI is greater than 100%, you are making a profit.  When you make a profit, your cash flow is positive.  When your cash flow is positive, you stay in business.

There are two websites on the internet that dominate the attention of most internet users.  Those two sites are Google and Facebook.

It only makes sense, then, that if you need to go fishing for new buyers, then finding them on either Google or Facebook is a logical way to start.

There are two main ways you can be found on Google.  Both methods will bring your website attention in the same location – the Search Engine Results Pages (or “SERP”).

  • Search Engine Optimization – Through a series of mind boggling sophisticated algorithms, Google plays match maker by “rewarding” websites and web pages as most likely having the very best answer to a user’s question based on what Google knows about that user and what it knows about how other users have interacted or engaged with those web pages on previous searches.
  • Google AdWords – In addition to competing for the prize of being presented as a possible match to a search query, you may also pay Google to present your advertisement to an audience of people you define. Some of the important criteria you can use to define your audience starts with their intent.  What questions are they asking Google to help them answer?  The words a visitor to Google types into the search bar are called keywords.  Another criterion is where are they geographically when they perform the web search?

woman-hand-smartphone-desk cropGoing back to my statement about being able to measure the behavior of somebody using Google for search, when you decide you want to run an advertisement about your company or a product you sell, you can bid only to have your ad placed in front of people who match the criteria you select as becoming a likely customer.  For instance, let’s say you are a Family Lawyer attorney who wants more new clients.  You may decide you only want to present your advertisement to men between the ages of 35 and 65 who are on a computer in Belen, NM and who type in the words “cost of a divorce.”  Your ad will only be shown to the men who meet your criteria. But that doesn’t mean you’re going to get the customer.  There are undoubtedly going to be other attorneys who want to present their ads to the exact same prospect.  So all of the attorneys who want to present ads to that person must enter into an auction.  And even if you win the right to present your ad under your desired terms, there are going to be other advertisers who have ads near yours.  So your ad is going to need to stand out and get the prospect to choose your ad over those of another attorney.  That choice is often expressed in terms of a click.

Setting up a Google Adwords campaign isn’t all that complicated, as long as you have a basic understanding of how sales funnels work.  But before I explain what the system and process you create should look like, I want to take a moment to get on my high horse and insist that you answer one epically important question about your business that few business owners have even the slightest clue how to answer.  I insist on this step because it will be the difference between being happy with your advertising outcome, or being frustrated and pissed that you don’t know whether it’s working or not.

What is the lifetime value of a customer?

I’ve talked about Google Adwords to business owners that get all caught up in asking irrelevant questions such as “what’s the cost per click for that word?”  What if I told you the cost per click of “cost of a divorce” was $1 million?  Your first reaction might be, that’s WAYYYYYYY too expensive.  I can’t afford to get started with Adwords!  And I’m here to tell you the cost per click is irrelevant as a number by itself.  It only gains relevance when you compare that cost with the expected value of a new customer.  If a customer is worth $1 BILLION to you, over the lifetime of your relationship, then spending a mere $1 MILLION will net you a profit of $999 million.

When you know the lifetime value of a customer, you automatically know how much you should be willing to spend to acquire that new customer.    

 

How do you calculate the lifetime value of a customer?  In its simplest form,

CLTV = Total customer revenue minus total customer costs.

 

I would like you to read this blog post and watch the video embedded in it:

http://www.ecommerceinfluence.com/determining-customer-lifetime-value-how-fewer-customers-can-mean-more-profit/

 

Alternatively, here’s a different article to read: http://www.entrepreneur.com/article/224153

 

When you know how much you’re willing to spend to acquire a new customer, anything you spend that’s less than that amount will generate a positive ROI!

Ok, so now that you know how much you’re willing to spend to acquire a new customer, and you’re only going to spend when your ROI is going to be greater than 100%, let’s talk about the sales funnel you want to put in place for your Adwords campaign.

So how should your Adwords campaign work?  First of all, remember that each campaign begins with somebody sitting at a computer or pulling out a smart phone to do a Google search.

Before you begin advertising, you need to decide on a couple of important factors:

  • Where do you want your ad to appear? Remember, you’re entering an auction to compete for an ad location against other businesses.  Before February 19, 2016 Google would show ads in two key locations.  Location #1 was at the top of your SERP, and location #2 was along the ride side of your SERP.  On February 19, Google eliminated [https://searchenginewatch.com/2016/02/23/google-kills-right-hand-side-ads-what-does-this-mean-for-sem/] the ads placement on the right side and only left four spaces at the top.   As may be obvious, if you secure the tip top spot for your ad, you’re likely to have the highest click through rate.  It costs more to secure that spot, however.
  • What’s your list of keywords to begin with? Let’s stick with our hypothetical search “cost of a divorce.”  While these initial keywords may be where you’ve decided to start, a deeper analysis will probably uncover a longer list of potential keywords that somebody contemplating a divorce or needing divorce advice could enter.   While it’s possible to identify a long list of keywords that searchers may possibly use to find a divorce attorney, starting with too many keywords can be counterproductive.  Let me give you an example of why too many keywords is a bad idea:  Let’s pretend that you have set a daily ad budget of $25 and you’ve selected 25 keywords to bid on that have an average cost per click of $1.  Let’s also pretend that each keyword gets only one click per day.  Without an ability to see which keywords get you the most clicks, you’re going to have a difficult time improving your campaign.

where google ad words display on google

 

After getting search results back, if any of the results look like they will help answer a question the search consumer has, he or she clicks on an ad.

googlad

After clicking on an ad, the searcher should be taken to a campaign landing page.  Surprisingly enough, not using a dedicated campaign landing page is one of the most common mistakes Adwords advertisers make.  Not only does your landing page need to do an effective job at convincing the site visitor they can solve their problems with the solutions offered, but it needs to adhere to some basic Google policies.   https://support.google.com/adwords/answer/2404197?hl=en

 

 

 

3 thoughts on “Why Google Adwords Could Very Easily Be Your ROI BFF!

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