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Google AdWords: The Simple Solution

Google AdWords: The Simple Solution

Google have made AdWords a highly simplified piece of software that lets you get started in minutes. Click a few buttons, hand over your credit card details and off you go! However, it is exactly this simplicity that could end up costing you dearly. Here, we’ll take a look at whether AdWords really is the simple solution everyone should be using, and how it can go horribly wrong when you don’t know what you’re doing.

Does AdWords work?

Well of course it does. Some of the biggest spenders on AdWords consistently drop tens of millions of dollars into Google; Amazon spend $55.2 million a year, around $40.4 million a year and Hewlett Packard around $33.3 million every year. This would not be happening if these companies were seeing a significant ROI for their expense.

In general, Google AdWords makes perfect sense, and on paper looks like a great investment for any business. It’s highly targeted, meaning your ad only displays when a user is searching for your type of product or service, and its low risk too, as you’ll only be paying for the clicks you get. It’s way more attractive than traditional media advertising, which is why businesses of all shapes and sizes make a beeline for AdWords as one of their primary marketing tools.

So, if AdWords is so easy to use and so effective, what’s the problem? Well, research has shown that many businesses waste around 25 per cent of their PPC spend due to simple errors in management or strategy. Basic errors are costing companies dearly, and perhaps a good deal of this failure is down to the assumption that using AdWords is a simple process.

Why do novice users lose money on AdWords?

AdWords beginners probably log into the interface and think ‘hey, this doesn’t look so hard; I think I’ll have a crack at this’. In essence, they’re not wrong. The interface is designed to look relatively straightforward, but once you start to dig into it, there’s a lot more to it than that. Here are some of the reasons we see beginners spending a fortune on AdWords without really getting results:

  1. Google is in business to make money from you

Last year, Google generated a revenue of $109.65 billion. Over two thirds of that (68 per cent) came from its AdWords advertising service. That’s a lot of dollars being generated from people just like you. As much as Google may seem like a nice, fluffy search engine, committed to promoting the best content possible for the benefit of the internet at large, what they really are is a lean, mean, money making machine.

Google’s default settings in AdWords are designed to cost you the maximum amount of wonga possible. If you’re not au fait with the advanced settings and features of the software, you’ll end up spending way more than you need. Simple things like advertising in both Search and Display with the same campaign can see you losing money hand over fist, with very little to show by way of return.

  1. You don’t understand quality score

In AdWords terms, your quality score is possibly the most important element of your campaign. The higher your quality score, the lower your cost per click will be and the higher your result will be displayed. Get it right and you’ll be getting more clicks for less money. Get it wrong and you’ll be spending a fortune on the very few clicks you do get.

Google scores your quality for every single keyword you use in your campaigns, allocating a number between 0 and 10. They use 100 different factors in their scoring algorithm, including landing page optimisation, keywords being used in ad headlines, relevant ad copy that compels a click through and much more. You can check your quality sore when you click on keywords; 7 and above makes for a good campaign.

  1. It’s actually quite complicated

What looks like a relatively simple interface on the surface is actually quite complicated when you start to get into it. Sure, you can plug in some keywords, set a daily budget and see how it does, but as we said earlier, Google is out to make money from you, so the less tweaking you do, the more it’s likely to cost you.

From how much to bid to which keywords to exclude, everything you do in AdWords will help you to target the right people in the right way. This will mean that every penny you’re spending on marketing is going towards drawing in those individuals who are actually quite likely to convert into a paying customer. But, if you don’t understand the advanced settings and filters, you’re going to struggle to make this work.

  1. You don’t have the time / knowledge / energy to manage it properly

Novice AdWords users are often under the impression that all the effort goes in at the start. Once their campaign is up and running, surely they can just sit back and watch the leads flooding in… right?

Not quite. To get the most from AdWords (and to avoid watching your marketing budget rapidly disappearing down the drain for very little return) an active management strategy is necessary. It’s likely that only a tiny proportion of your keywords will actually bring you sales, which means the rest are redundant, so your bids are only serving to waste your money with irrelevant clicks. To make AdWords work for you, you need the time and knowledge to identify those high performing keywords and maximise your return, whilst simultaneously reducing the activity on those keywords which are not doing so well. Oh, and this is all whilst busily tweaking your landing page, researching new keywords, following trends and split testing your strategy.

So, how simple does AdWords sound to you now? It’s not quite the child’s play you assumed it would be, is it? In reality, getting great results from your PPC campaigns means a hefty investment of time, expertise and cold hard cash. If you’re lacking in any one of these areas, chances are you’re going to struggle.

So how do businesses make money through AdWords?

The simple rule is here, never pay more for an acquisition than that acquisition will be worth in its lifetime. You need to know how much a new customer is worth to you, and not spend more than that on getting them on board.

Sounds simple, right? But those are some complex numbers we’re talking about here. AdWords is always going to cost you money, but unless you know when to step away from the clicky button and embrace statistics, you’re not going to know if you’re spending enough, too much or simply targeting the wrong things.

The biggest mistake you can make is to leave your AdWords account running on auto pilot, with little input from you save for paying the bill each month. This allows ineffective campaigns to continue running (and costing you money) while those which are actually performing well are not being maximised to their full potential.

If you’re an AdWords novice, the best way to ensure your success is to work with a third party who is capable of giving your campaign a great start. Here at Search South, we’re happy to take on that role, working on either existing campaigns that are not performing as well as they could, or indeed on brand new initiatives. We’ll make sure you’re getting the most from AdWords, whilst helping you grow in your knowledge and skills too, so that you can begin to take over and manage your campaigns more effectively.

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Vanessa Simms
Vanessa writes on a range of subjects for the Search South blog, but has a strong focus on her core interest area of Google AdWords management best practices.