What is AdWords and how to make it work more effectively?

Written by Dave Collins, SoftwarePromotions Ltd.

What is AdWords? It is an online advertising platform run by Google that allows you to display ads for your business on Google’s search engines, Google’s various websites and services, search partners and websites across the internet that are a part of Google’s display network. One of the basic principals behind AdWords is that you only pay when someone clicks on your ad. It’s called PPC advertising: Pay-Per-Click.

From a marketer’s point of view, or for that matter anyone trying to advertise their products, the establishment and growth of PPC has been little short of revolutionary. As many of us know, any form of advertising is a somewhat hit and miss affair. And no matter who might tell you otherwise, all forms of advertising involve some level of risk. And it’s usually quite high.

Pay Per Click, however, reduces this risk to an absolute minimum.

Is it possible to lose money from a scheme such as Google AdWords? Yes, of course it is. In fact it’s actually very easy to do so.

Scenario 1:

With a daily budget of only $2.00, and a maximum cost per click (CPC) of $0.05, Company 1 isn’t going to gain very much. Obviously. Nor are they risking losing much either.

But potentially they might gain forty customers a day, for only $2. Potentially.

After seeing a reasonable level of interest in their ads, Company 1 start to realise that they’re being held back by their daily budget and low CPC, so they cautiously increase their bids, and open up the daily budget to $4.00, and then to $5.00.

By this point, they’re reasonably confident that they can’t lose, as they’re only paying for each click anyway.

They’re wrong.

Scenario 2:

With the experience of a few years behind them, Company 2 have a daily budget of $25, and most of their bids are around $0.50 maximum CPC.

Company 2 are a well established company, and their website receives a fairly large amount of traffic. They’d really like to be able to accurately track their sales, but they just don’t have the time to do so.

They work on the basis that when you advertise, you throw a little bit of money around in many directions and hope that some of it sticks.

Their sales are great, so from their point of view, $750 a month on Google is peanuts.

And besides, they’re only paying when someone actually clicks their ads, so they can’t lose, right?

They’re also wrong.

In my hypothetical scenario, I outlined two companies, both of whom were happy with their respective AdWords spending, mainly on the basis that as they were only paying for clicks, they couldn’t lose.

The reason why they both might be wrong is simple.

Here’s a real life example.

Our company (SoftwarePromotions) has just introduced our Google AdWords Deluxe package, open to all software companies, wherever you are in the world.

To celebrate our launch, we are offering anyone who signs up for the package today, Wednesday the 6th of April, $1,000 of Google AdWords credit, paid for by ourselves. Click here for details now.

My guess is that most people reading this will have clicked the link. So we’ll have received a fairly high number of hits. But how many people will actually sign up for the package? I’m guessing very few.

If we were paying for the ad, even on a pay per click basis, we’ll probably have spent a fair amount on the number clicks. But our ROI would probably be zero.

The point here is that the information you see in the AdWords control panel is only half the story. The rest of the information lies in your web server logs.

An ad may generate hundreds (or even thousands) of visitors per day, at a reasonable cost. But if 99 percent of these visitors take one look at your website and then leave, you can’t really consider the ad to be a great success.

If however 75 percent of the visitors go on to explore your website, and 40% of them actually download the trial version, then you may be onto something.

If we take a quick look at the factors involved here, in order of importance, we’re looking at the ad itself, the landing page, the product, and then the price.

The AdWords Ad.

The wording of the ad is of course a critical factor. Get it wrong, and either the CTR or the ROI will plummet.

As well as the words you use, you also need to consider how your ad compares with the others that will be displayed by Google.

The content of your ad will be seen right next to your competition, so you have to keep an eye on what they’re saying, and you might want to consider how (or if) they’re competing with each other.

You should also try to get as much accurate information in there as you can, while simultaneously making sure that the overall impression is pleasing and compelling. Space is a little tight though, but no-one ever said it would be easy.

If you have a free trial of your software, then this might be worth including too. But don’t give the impression that the software is free. Again, you’ll get great clicks but a poor return on investment.

The Landing Page.

There’s nothing particularly clever about a landing page, and many companies seem to be happy to send people from their ads straight to their main page.

However, an effective landing page can have a massive effect on the success of your ads.

The basic idea is that the landing page should carry on where the ad left off. The ad is severely restricted to a very small number of characters, but your landing page has no such inhibitions.

No matter what the main focus of the ads, the people who click on them are clearly interested in the ideas expressed. So make sure that the landing page follows them up.

An effective landing page will also steer (or push) the visitor towards your goal, and present the important information as clearly and effectively as possible.

The Product.

Let’s not overlook the fact that the product is a factor too! Even the best ad and the most effective of landing pages isn’t going to do much for the sales of an appalling product. But presentation is key.

Make sure that the product looks good on the landing page, and if (or when) they download a trial version, make sure that they quickly understand the benefits that your software can offer them.

As always in software marketing, focus on benefits, not features. And make sure that everything the user wants or needs to know is right at their fingertips.

The Price.

Why is the price last in the list? Because up to a point, it’s the least critical of all the factors.

It all depends on the nature of the product, but many users are looking for a solution more than a bargain.

Example. If a business goes looking for a network monitoring application for their network and websites, the first thing they’ll be interested in is the solution.

They’ll be looking for an application that’s easy to use, with powerful monitoring capabilities, and will soon realise that they’re looking for a good notification system, easy to understand reporting capabilities, flexibility and so on.

When they find the product that fits these requirements, they’re almost certainly going to discover a whole load of extra benefits and features that they weren’t actively looking for, but will quickly appreciate how useful they could be.

At this point, the price isn’t just about their original needs. It’s about the overall package and benefits that they’ve now been presented with.

And it’s not only business who think this way. We’ve all gone out to purchase consumer goods, software, PC hardware and gifts with an approximate budget in mind, but have then gone way over because what we’ve found is worth the extra.

If the solution is presented in the right way, people and companies will part with their cash.

There’s also a fifth factor, and one that many advertisers often overlook. The unknown factor.

No matter how much you may have researched what people are searching for, how well you think you know your users, and how well crafted your ads and keywords may be, there is still the unknown factor.

Example. For one particular campaign, you bid on ten different keywords, and use ten different ads.

If you were to try and predict which ads receive the most number of clicks, I guarantee that you won’t get it right. And if you were to try and predict which of these ads prove to be most successful, in terms of bringing visitors that convert to downloads and sales, you’ll also be off.

Why? Because no matter how detailed the research and how experienced the ad writer, user behaviour is not an exact science. There are simply too many external factors that can have an impact on the perception of the ads, almost all of which lie beyond your control.

But this doesn’t mean that maintaining your AdWords campaign is a fruitless task. Far from it.

The solution, for once, is a very simple one:

Quantity. Followed by tracking.

When you setup an ad group, try (where possible) to create more than one ad. And where possible, track each of them individually.

If you’re dealing with 30+ ad groups, as some of our own clients are, then this isn’t always possible. 30 ad groups with ten ads in each adds up to an awful number of ads, tracking variables and statistics.

But you can identify the main groups, either in terms of actual interest or those that you would have expected more from.

The golden rule here is to throw out variables, track each one separately, then give them time to pull in data for you to work with. A little patience can go a long way, so aim to setup a new ad and leave it for a few weeks before making any decisions.

Once you start to get a feel for what’s working and what isn’t, start creating new ads to try and copy what’s already working, modify some of the medium-performance ads, and delete the deadwood.

Don’t assume that all ads are equal. A little experimentation and innovation can go a long way.

Written by Dave Collins, SoftwarePromotions Ltd.