Make headway with Google Adwords

05 Oct 2011

How does it work?

A web user searches for a phrase, and advertisements appear, written and placed by companies who bid to display their ad against that keyword.

The advertiser usually pays when the user clicks on their advertisement, and not when their ad is ‘seen’, unlike traditional advertising. (Although Google does now offer this option.)

The “cost per click” is between a few pence and a few pounds depending on the competition for that phrase. “Loans”, “mortgages” and “insurance” are hotly contested phrases, with Google netting tens of pounds for some phrases.

Your ad can appear instantly – meaning that a brand new website can benefit immediately from visitors before traditional “SEO” has time to work.

Should you be using Adwords?

At first glance, it may appear ‘expensive’. However, the key to any advertising spend is the return.

A quick example… let’s consider our widget manufacturer, selling widgets online for £50 each.

A click for ‘plastic widgets’ costs £1 per click. That may seem rather costly when we’re used to ‘normal’ search clicks being “free”.

100 clicks may produce 10 sales (10% conversion rate), at £50 each – totaling £500. Therefore, every sale (10 out of 100 clicks) costs £5 – probably a positive return, especially if that customer returns to buy again without clicking on your ad.

A service based business may need to drill deeper, factoring in the cost of each enquiry, and the conversion of enquiries to business…

Do people really click on these links? (We’re asked this every day.)

Your ‘click-through-rate’ will depend on how well written the ad is, but typical click-through rates are between 1% and 10%. So yes – they do!

(Adwords accounts for 97% of Google’s $33bn (£20bn) revenues.)

For a targeted, accurate way to advertise to your consumer, customer or potential client – you really should consider trialing an Adwords campaign. Your competitors probably are…