Adwords Campaigns – Are They Worth It?

by Shaun | Mar 21, 2016 | adwords

For those of you who may not know, before I start writing about Adwords, let’s define what an Adword campaign is.

When you do a Google search, there are two types of listings that come up. First, there are the “organic” search results. What we mean by organic is the natural Google search results in response to the search terms that you have entered.

Alongside these listings, either above, below or to the side of the organic listings are ads. These are the Adwords ads.

We can see this in the image below. Each paid listing has “ad” at the left of it.

Adwords ads work on what is known as a pay per click model. That is that for every time someone clicks on the ad, the business that has placed the ad gets charged. When the person clicks, naturally they are directed to your website.

So that, in a nutshell, is what Adwords are all about. But are they effective? As usual I can’t give an unequivocal answer. The reason is that the prices of the clicks vary, depending on the search terms you use. As a result, Adwords can be either very effective or prohibitively expensive.

The variation that I have seen when investing Adwords for clients is from around 60 cents per click (naturally very attractive) to up to 12 dollars per click (not so attractive).

This variation is caused by the way Adwords works. Google have been very clever with this. Each time a search is made, each purchaser of Adwords is bidding against every other person who has put in an advert for the same or similar search terms. Google have settled on this model because it obviously creates massive amounts of revenue for them.

Unfortunately with this model, if there’s a lot of competition for a particular search term, you pay the price. And sometimes that price is too high to make Adwords viable.

If the price isn’t too high, however, Adwords is attractive. You can set a daily limit of what you’d like to spend and once you have spent that amount (which means people have in fact clicked through to your site) Your ad doesn’t come up any longer.

And of course, since Google doesn’t get paid unless people click on your ad, Google are going to make sure it’s prominent in enough cases to use up your daily budget.

At the end of the day then, once Adwords has directed traffic to your site it’s a simple process of measuring the results you get from the people who end up on there. Are you getting conversions? At what rate?

If you are paying 3 dollars per click, selling a 200 dollar product and one in 10 of the visitors who comes to your site from Adwords make a purchase, it’s a no brainer. You’re going to do it forever. If on the other hand only one in a hundred visitors make a purchase, time to stop.

But what are other people saying? Does Google Adwords work? Or perhaps five reasons you shouldn’t use Adwords. As you can see, with any topic related to publicising your web page, there are many conflicting opinions.

So like everything else in the digital market place, it’s all about measuring the results you’re getting.

Why Not Adwords Instead of SEO?

by admin | Nov 10, 2014 | adwords

When it comes to SEO, The question commonly asked is why spend so much time optimizing a page?

Isn’t it easier to just purchase pay per click advertising? That way you’re guaranteed page one of Google.

Well sort of. The way Google Adwords works is that you’re in an auction with other Adwords customers for search terms. Where the competition is high, naturally the price rises.

What this means in practise is that for some of the more popular search terms, the cost per click can be up to $12.

Now think about that. The mathematics of any marketing campaign are simple.  You get lots of lookers, a small amount of them become potential customers and then an even smaller amount become actual customers.

I don’t know what the actual conversion rate is for most eCommerce sites. Apparently the figure most often bandied about is 3%. Your conversion rate could be higher, it could be lower, but let’s just work with that 3% figure.

That means that for every 100 visitors to your site, 3 actually purchase something.

And that is where the problem lies with Adwords at the moment

If you get 100 clicks on a competitive search that is at roughly $12 per click, it has cost you $1200 to get those visitors. Now assuming that 3% conversion rate, that means that whatever you’re selling, you have to make a lot more than $1200 out of those customers to make it worth your while.

At that is assuming that you convert at 3%. You may not reach that level. The one essential thing for any web based business is  traffic. If you are getting 5000 hits a day and a 1% conversion rate, that is 50 sales a day. That is most likely a booming business.

So there is brief explanation about why SEO  currently is preferable to Adwords for most small businesses.