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Google Adwords is potentially one of the best ways to get quick, measurable results from your marketing budget. Here’s how it works

But first a few general comments.

  • Adwords works best when you are seeking on-going business (i.e. clients rather than customers).
  • It’s no good if potential clients aren’t going to be looking for what you have to offer. So if you are launching a new product or service for which there is not an existing demand, Adwords is not the way to go.
  • I chose Adwords originally because I wanted to be where people would be looking when they wanted (in those days) a change of auditor.

The starting concept with Adwords is that you make two bids –

  • Bid per click. This is the maximum that you are prepared to pay when someone clicks on your ad.
  • Spend per day. This is the maximum that you are prepared to spend any one day.

So if you bid, say R4 per click and R100 per day, you are committing to a maximum spend of about 30 x R100 = R3 000 per month. If you get so many clicks that at R4 per click you run out of cash (25 clicks per day), Google will switch your ad off  and it won’t appear until the next day. You can set it to turn on/off, on/off through the day.

Now let’s say your competitor bids R3 per click, Google will charge you R3,01 and place you above your competitor on the search page.

If your spend per day means that you only appear 20% of the time for your 25 clicks then it is simple arithmetic that if you double your daily spend you will get 50 clicks per day instead of 25.

Now, a click is only going to take the potential client to your website (hopefully to the page that is relevant to the keyword that he/she typed into their search). So your website has to be HOT! It has to turn that click into a sale otherwise you just wasted R4 (or maybe R3,01).

Those are the basics, but it is actually far more complicated than that. Google have an algorithm that is a closely guarded secret although certain aspects are available to the experts. It is applied to your website and your adverts and rates their “quality” which can be roughly translated as “relevance to the person searching”. The better your quality, the higher your ranking above your competitor, so the bid per click is only part of the determinant of your position.

We built our spend up to R25 000 per month based on simple bid per click vs return on investment. Then we engaged Refract, a marketing company that had been strongly recommended by a client. They cut our spend to about R8 000 per month with the same results by improving the quality of our ads and our website (in Google’s eyes). I have to contribute a lot of energy to keep the website alive and dynamic (which is partly why I’m writing this post).

But start the way we did – great website, small spend on Adwords, monitor it carefully and gradually increase your spend always being aware of your ROI. When the numbers get significant, engage Refract and keep on growing!


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