Google Adwords - How to increase your ROI

Google AdWords service has brought success to many businesses by providing them with a large amount of highly targeted traffic from as little as 1 cent per visitor. However, there is probably an equal number of webmasters who have paid for AdWords and seen little benefit or have indeed made substantial losses. If the latter applies to you, then the following may be useful to you.

The problem with Google AdWords is that it has become very difficult to find keywords at a reasonable price. Bidding on keywords like "make money online" or something in that range will kill your advertising budget in no time.

In most cases, a good market will be between 40,000 to 100,000 searches for that particular month. Less than that may be a weak market, and more than that could be too competitive. To find out for sure, you can use the Overture bidding tool for a particular word or phrase, and look at the third bid, it should be at least .30 up to $2.00. Again, less than .30 could be weak and more than $2.00 could be too competitive. You know, Overture is similar to Google AdWords, just it shows you the bid list.

Since the space in the Google Sponsored Links area is limited (about 10 slots per page), and the number of people using PPC to advertise their products is fairly large, there has to be a way of controlling who gets what placement (also called Adrank) in the Sponsored Links hierarchy.

Google controls this placement by 3 mechanisms:

1. Keywords/keyphrases
2. Bid price
3. Quality Score

The goal is to get your ad in the Sponsored Links section of the first page (or at most the second page) of the returned Google search results. That means your ad can be anywhere in the Sponsored Links position from 1-10, or 1-20 if you take into account the second page. People don't normally search beyond the first couple of pages of returned search results, so having your ad appear on the third page (or beyond) diminishes your chances of the ad being seen.

To get your ad in the first or second page of Google's Sponsored Links, and to maximize the number of quality clicks, you need 3 things:

1. Good Keywords/keyphrases
2. Bid in an active bid range
3. Good Quality Score


Using Good Keywords/Keyphrases
Keywords (or keyphrases) are the words that people type into Google when they run a search. You need to select the keywords that relate to your product so Google will know when to display your ad. From your perspective (the online Marketer), good keywords are the words that relate to your product. For example, if you run a Google PPC ad campaign and you're selling a course on how to train dogs, then a good keyword list might consist of:

dog
"Dog training"
"Train my dog"
"Training for dogs"
"dog obedience"
"dog growling"

Note: using quotes instructs Google to show your ad only when the searched keywords appear in that particular order.

The above keyword list is then applied to your Google PPC campaign. Now, every time a user runs a search for any of these keywords on Google, your ad COULD be returned in the 'Sponsored Links' section of the returned search results in Google.

As we mentioned previously, the keywords are not the only determining factor governing which ads appear in Google. Keep in mind, there are likely many other people running their own PPC campaigns that have the same keywords as you. And since there are only about 10 slots to place the sponsored ads in Google's first page, the ads that get a position in one of those 10 slots are the ads that are willing to pay the most for each click and the ads that have the higher Quality Score.

A good way to find keywords for your product is to use the Google Adwords Keyword Finder at: https://adwords.google.com/select/main?cmd=KeywordSandbox

Bidding in an Active Bid Range
All popular (and many not so popular) keywords have an active bid range. The active bid range is the cost per click (CPC) range that results in your ad appearing in a preferred position within Google's Sponsored Links area (usually position 1-20). Obviously, the higher your ad is in the position, the more active (more clicks) will likely result.

So how much should you pay for each click to make sure your ad is in the active bid range? You should first find out what the going rate is for that particular keyword. You can get a good idea of what people are willing to pay for a given keyword by using Overture's Bid Tool.

You should keep in mind that your goal is to get a position anywhere on the first page of the Google search result, or second page at most. Hence, you to make sure you have the highest bid. In fact, you can even make more money by bidding much lower than the highest bid. For example, say you're bidding on the “dog training” key phrase and you find that the 1st position for that key phrase is going for $1.50 per click. You may very well find that the 4th or 5th position is going for $0.30 - $0.40 per click. In this case, I would opt for the 4th or 5th position. The cost savings is quite significant.

Getting High Quality Score
The Quality Score is derived from the keywords Click Through Rate (CTR), relevance of the text in the ad to the keyword, how well the keywords has performed in the past, and other things that Google has kindly decided not to share. Since there are some unknown factors here, it's best to focus on what you can do to increase your Quality Score.

One thing you can do is aim for a high Click Through Rate (CTR). A CTR is a percentage that is calculated by dividing the number of clicks by the number of times your ad appeared. For example, say your ad appeared 100 times, and out of those 100 times, 1 person clicked on your ad. Your CTR for that ad would then be 1/100=1%.

Another thing you can do is make sure your ad's text is relevant to the keyword. For example, if you were advertising a dog training course and your keyword was “cars”, then the relevancy of the keyword to the ad is low.

Not a new variant but a not very well-known version of affiliate marketing is the promotion of affiliate product links/websites via Google AdWords. It helps if you have years of experience in playing the chess game of targeted marketing through Google AdWords and other reliable online channels. The surge in popularity of Google's Adwords is very evident as you can see many sites that have adopted this marketing strategy. There has never been a direct marketing tool that is as effective and profitable as Google Adwords.