Did you know that every $1 spent in Google Adwords produces — on average — $2 in revenue? In some cases of PPC campaigns, we’ve seen proven gains of 200% to well over 1,000% return on clients’ investments. The only other marketing that comes close to the same return on investment is email campaigns. But how do PPC campaigns work, and how can they help your business?
What is PPC?
PPC stands for pay-per-click, and is a model of internet marketing that most platforms use when allowing people to advertise on their properties. It’s commonly associated with search engines like Google Ads and Microsoft Bing, but it’s also used with social media giants like Facebook, Twitter, Instagram, and many other entities.
Search engine advertising is one of the more popular forms of PPC, which allows advertisers to pay a fee each time one of their text ads is clicked. The amount paid depends on many variables — mainly bid price and quality scores.
Where do text ads show up?
With Google, text ads used to be displayed above and below the search results and on the sidebar of search ads. But Google is constantly evolving. Now, text ads are displayed only above and below organic search rankings. The importance of having a paid campaign is evident when you realize how much of the page is dedicated to ads.
As you can see in the image, Google carves out ample space on its search results page to display ads. Clicks on paid search listings top organic clicks by nearly a 2:1 margin. Moreover, 64.6 percent of clicks on Google are in ads when a consumer wants to buy an item. While organic ranking is important and provides a consistent source of free traffic, a digital marketing campaign can be grown exponentially when paid ads are incorporated.
What is Google Ads?
With a 64% search market share for US desktop traffic and 89% of mobile organic traffic share being in Google’s corner, it’s important to be familiar with how Google handles ads. Google Ads uses an auction system to display ads on its search results page. Each time a keyword is typed in and a search is conducted, Google digs through a supply of bidding advertisers and picks a set of winners to appear above and below organic rankings on its search page.
Each time the advertisers’ ad is clicked, they’re charged a certain fee. But, how much each click costs and how many clicks are allowed daily can vary.
How does Google pick the winning ads?
Ad positions are how Google determines its winners. These ad positions are displayed on the Google Ads dashboard so that the positions can be adjusted. The ad winners are chosen on a combination of factors, but it typically comes down to:
- Relevance of their keywords
- Ad text
- Bid price
Search Engine Land provides a great infographic on how AdRank determines the position of your ad. Basically, your highest bid price is multiplied by your quality score to place your ad into a position. At Allegrow, we like to keep our ads around 1-3 as a client’s keyword competition and let the budget dictate how aggressive we can be.
Now with competition, AdRank plays a huge role in determining the actual cost you pay per click. The price that you pay when someone clicks your ad is based on this formula:
Seeing as how this can be a bit confusing, let’s look at an example of 4 advertisers bidding on a keyword and how it converts to their ad rank. Each advertiser will offer a different max bid:
This example shows the importance of quality scores and why they should be kept as high as possible. While bid price plays an important role, the quality score is equally important in displaying an ad. These formulas that Google uses allow advertisers to provide quality content over throwing massive budgets at keywords — resulting in more legitimate competition.
Now that we know the basics, how do you set up PPC?
This section could fill the content of a large book, but for simplicity, we’ll focus on five core strategies that we use at Allegrow to make planned and well-thought-out campaign strategies from the ground up.
First, we focus on keywords. Keywords are the fuel that powers this Google PPC Engine, and Google’s Keyword Planner allows us to create the blueprint. Keyword planner has many tools to help you plan out your keyword strategy. For example, you can enter from one to 10 specific keywords, and it’ll help you create a plan that will provide estimated projections on recommended bid prices, click-through rates (CTRs), impressions, and clicks. It’ll also allow you to shift results based on budget parameters.
Content relates to the ads you’ll use to drive potential leads to your landing page. Ad content can be used in many ways, but focusing on thought-provoking and engaging keywords is best. The goal of each ad is to follow the same direction of the keywords you’re getting people to search for. You want the keywords to lead to an ad that relates, and from there, you want the ads to lead to the third core strategy — landing pages.
3. Landing Pages
Landing pages need to keep the flow moving from the initial search stage to the final step — closing the deal. The goal of a landing page is to have the potential lead know what your business does and follow through the call-to-action within a few seconds. A landing page is substantially different from a company website because there shouldn’t be too much information — this could result in your leads being misguided. A landing page should be clear, concise, and have one goal.
From there, we move to the fourth step, focusing on quality score and overall quality. We want to include keywords in every step of the process. From ad copy to landing page copy, it should all flow properly.
Finally, we review the campaign, push it live, and optimize accordingly. To do this, you need to research your target audience, do proper keyword research, modify them to your audiences’ likes and tastes, and include a clear call to action. Make sure to plug your keywords into search tools to get insights into search volume.
Is Google PPC for you?
The answer to that question comes down to evaluating budget, competition, and industry. At Allegrow, we’ve always found it to be beneficial to have a paid campaign presence. If you spend $20 for a click, but the click results in a $300 sale, then using PPC pays for itself.
The underlying issue is that if a particular keyword is $200 for a click, your budget for a paid campaign may not suffice. That’s why a question you should consider before moving forward with a PPC campaign is whether it’s financially feasible for you. We recommend researching how much your competition is spending to have their ads displayed and comparing that to what you would like to spend. It’s almost important to note that:
- At least 95% of Google’s total revenue comes from advertising
- An ad in the first position has an average click-through rate of more than 7%
- More than 1.2 million businesses advertise on the Google Search Network
- If there is no right-hand column, 45.5% of people can’t tell the difference between organic and paid search results
- Great Infographics
- SEO vs. SEM breakdown
- Google Statistics
- Ad Rank formula