Google Adwords Pay Per Click Program ...

Measure of a Successful Adwords Campaign

Caption: This graph shows highly significant reduction (about 60%) over 6 months period of Cost of Conversion in a very competitive and valuable financial services market market

Google Adwords (also known as Pay Per Click or PPC) is a powerful direct marketing advertising medium that enables advertisers to reach any market they want to in a defined way at a quantifiable cost. The principle of Google Adwords is simple...

If your ad is displayed and if someone clicks your ad then Google will lay a charge against your account with them. Google only charges the account holder when an ad is clicked. The system is often referred to as an auction.

There are normally up to 11 sponsored links (Google Ads) on any page of Gogle SERP's (search engine results pages)

The top results often appear with a yellow background on the left hand side of Google search results. The position an advertiser enjoys in these search rankings (called AdRank) is not just a function of the amount the advertiser is prepared to pay. It is quite conceivable that the ad in position 1 is paying considerably less than the advertiser in position 4 for example. This is the point of optimizing Google Adwords campaigns... to get maximum exposure at the minimum cost consistent with overall return on money spent to advertise.

The overall objective of any Google Adwords campaign is to maximise conversions (eg sales) at the minimum cost per conversion (see above graph).

In practice Google Adwords is extremely complex for a number of reasons...

• The internet is extremely dynamic and highly competitive
• Google's search algorithm is continuously being tweaked and these changes impact directly upon an advertiser's position relative to other advertisers.
• There are many variables which determine the outcome of a PPC campaign. Optimising all these variables simultaneously and continuously in a highly dynamic and competitive environment ensures success. A failure to optimise on the same basis will often lead to a situation where a campaign runs at a loss.
• The time involved in creating and managing campaigns is often too much for an organisation to consider.

Google Adwords provides highly relevant reporting in almost real time and in such a way changes can be made to a campaign in order to optimise the campaign on an ongoing basis.

Important variables are:

CTR click through rate

CPC cost per click

Impressions and Ad coverage (also known as share of impressions)

Quality score... a propriety Google algorithm

Maximum bid

Adrank

Cost per conversion

Campaigns can be structured to take into account language variations, geographically targeted regions, and time related periods.

Users can elect to show the ads on a wide variety of web site properties in addition to Google search.

There is no upper limit to he amount of bidders allowed for any keyword so in highly competitive markets most ads will not be seen by any significant number of searchers. This is another reason for ensuring your Google Adwords skills are honed to perfection

If there are less than 11 bidders then you are assured of being on page 1 BUT only so long as you meet the multiple requirements of Google. You will normally see periods when your ad does NOT show even though you are seemingly bidding enough to be on the first page of results and you are prepared to meet the minimum bid (can be as low as 1 US cent).

Google ultimately determines which ad will show AND in which position based upon its wish to maximise earnings per 1000 page impressions.

Every time a search is made Google's algorithm triggers a brand new auction.

Which Position Will My Ad Occupy?

Answer is ... It depends .... and it will also vary

However you can greatly influence through skill and experience not only your position but also dramatically reduce the amount you pay for a click

It is best to use an example to show relationship between CPC and CTR  (click through rate) and position... there are other variables impacting upon this but for the sake of simplicity we will consider only the 2 most important variables namely CPC max and CTR.

Let's assume you and your competitor both bid $1 for same keyword ... say pond pumps

Which of these 2 bids will rank higher? ...

Answer, the one with the higher CTR

The relationship between CTR and position is dependent upon the two variables multiplied together ie (your CTR x your bid)

Lets' put it another way ... I get a 1% CTR for my keyword pond pumps. This means of every 100 people who saw my add 1 person clicked through and that cost me $1.00. On the other hand my competitor who also bid $1 had a CTR of 2%. So my competitor can lower his bid to $0.50 to get the same position as me and if he bids $0.51 (only 1 cent more) he will get the position above me. Google's auction at all times aims to maximise income for every 1000 page impressions.

In effect this means I will pay twice as much as my competitor.

Google rewards high CTR reducing the amount I pay per click and also by increasing the position of my ad so more people see the ad and this means that there will probably be an even better CTR  the next day.

What do we do? ....

Seaoz optimizes all the variables to maximise CTR and optimise your Adrank (it is NOT always a good idea to be number 1) and minimize your CPC consistent with maximising conversion ratios whilst satisfying Google's Quality Score requirements. You can ring us on 011-454-0105

Learn about CPC cost per click

 Learn about position