Written by David Chapman
These days, many companies are relying heavily on online advertising. Of course, Google AdWords is considered to be one of the best platforms when it comes to generating quality traffic and conversions.
But while other companies are making millions from AdWords, there are also some companies who still do not use the service because they worry whether AdWords is right for their business. Some also fear that they are just going to waste their money on it.
In this post I am going to highlight how they can decide whether AdWords is good for their business or not.
Analysis of Your Products’ and Services’ Online Demand
First of all, create a list of all the products you are selling online. If you provide services instead of products, then list all of them instead. The next step is to find out how many users are looking for your products or services online. You can useKeyword Planner to find a list of keywords that your audience uses to find your products or services online.
This will give you a list of keyword ideas, their estimated monthly searches, the competition, and the suggested bid.
The best way to study all this information more effectively is to download the data in an Excel file, then filter out keywords that are not relevant to you.With this data, you get an idea of how many people are already searching for your product or services online.
This will give you a list of keyword ideas, their estimated monthly searches, the competition, and the suggested bid.
The best way to study all this information more effectively is to download the data in an Excel file, then filter out keywords that are not relevant to you.With this data, you get an idea of how many people are already searching for your product or services online.
Cost-Per-Click and Pricing Analysis
The next step is to do some cost analysis. By getting the suggested bid for your keywords, you find out which keywords are more expensive and which ones fit your budget based on the CPC.
Next it’s time to do some analysis in your Excel sheet. Open the sheet where you have a list of your products or services. Add a column for the average price and another column for your profit margin. From here, you’ll know which of your services have the most profit margins and which has fewer profit margins.
Enter the average CPC against each product or service. You can get it from the keywords sheet that you downloaded from the Keyword Planner.
Add another column for the Ideal Cost per Conversion needed to make your campaign profitable. In that column, enter the maximum cost you are willing to spend to get 1 conversion. For example, if your profit margin is $25, then how much do you want to spend out of this amount to get one sale? Or you can think of it this way. Suppose you want to spend $2000 per month and want to get 100 sales from it.This means that your cost per conversion will be (Cost/Conversions) ($2000/100) = $20
Now you need to find out how many clicks you needed to get one conversion. If your averageCPC is $2.50 and you want your cost per conversion to be less than $10, then you need 4 clicks, with a conversion rate of 25%.
You can add the conversion rate(No. of Conversions/No. of Clicks) and number of clicks (Cost per Conversion/Avg. CPC) column on your sheet and once you get the data for all your products and services, you can see which products can bring you profit and which ones will not.
Take the sheet above as an example.For Product/Service 1, we need a conversion rate of more than 25% to make it profitable. For Product/Service 2, we need more than 5% conversion rate, keeping in mind that CPC and other variables will remain the same.
With this analysis, it makes sense that it would be easier to make Product/Service 2 and 4 more profitable compared to the other three.After all, it’s easier to get a conversion rate of 5% compared to getting a 25% conversion rate.
However, this also depends on the industry. In some industries, you can easily get 25% to 30% conversion rate if you are targeting the right audience. But with other industries, it can be harder to get even a 5% conversion rate.
Because of this, you have to make sure that you always run test campaigns and don’t just rely on estimated data.
Measuring the Success of a Branding Campaign
Branding campaigns have goals, like increasing brand reach and making sure their audience gets engaged with their ads.
You can use the matrices below to measure the success of your branding campaigns:
- Number of Impressions. This is the total number of times your ads were viewed.
- This involves your Click throughRate, Mouse over Rate, Video Play Rate, and more. This tells you if your ads are good enough to catch the users’ attention.
- Reach and Frequency. Reach tells you how many visitors saw your ads across the display network. Frequency shows the average number of times you ad was seen by a unique user. This tells you whether you are reaching new audiences, or if the same users are seeing your ad again and again.
If your impressions are high and engagement is really low (like less than 1%), then you need to work on improving your ads or changing the audience you are targeting.
Conclusion
If your goal is to increase your brand reach, then AdWords is the best for you. It can help you reach more than 90% of the internet users worldwide. If your goal is to sell your products or services, then you can do the above mentioned analysis to get an idea of whether it’s best for your business or not.
If the estimated ROI shows that your company can achieve the profit margin you’re aiming for, then AdWords is going to be the best solution for your company’s needs when it comes to sales and leads. I would also advise you not to rely solely on estimated data. The best practice is to run a test campaign for a month or two, and then decide if it’s good for your business or not.
It is also recommended that you ask for help from AdWords Professionals instead of doing it yourself. The process of creating a campaign is really easy that business owners sometimes think they can do it themselves. But creating a successful campaign is harder than it seems. There is a big difference in creating a campaign and creating a successful campaign.A single mistake can cost you a lot. This is the part where some start to think that AdWords is not good for their business.In reality; it isn’t working because of these crucial mistakes. That’s the reason why you need the help of a professional to decide whether it’s good for your business or not.
Author Bio:
David Chapman is the Director of Sales and Marketing at Webrageous Studios, a PPC Management Company based out of Reno, Nevada. His expertise in PPC comes from managing PPC accounts with monthly budgets in the range of $30,000 – $100,000 with a focus on mobile marketing.
