Making More Sales & More Profits at Lower Click Cost Using Google Adwords
This article may be the most important you have ever read if you use or intend to use Google Adwords to make money. I don’t say this lightly.
When a Google Adwords campaign is set up the RIGHT way then 5 very significant things happen.
The cost per click goes down
The Adrank (position in results) goes up.
The number of ad impressions goes up… therefore the click volume goes up as well as the click cost coming down
The conversion from clicks to sales goes up which means the cost of a sale declines.
Sales volumes go up
The compound effect of these 5 factors on the profitability, reach and exposure of a campaign is ENORMOUS
A fact of life is that few Adwords users know these important relationships let alone use them to achieve a great and amazing advantage over their competitors.
What you need to do to achieve these results
Fundamentally it’s important to master the control of:
1. Quality score
3. Cost per click
4. Landing page conversion
Within each of these variables are a host of other variables which makes the manipulation of the variables far from easy. This is why most Adwords users do not benefit from their campaigns.
Let’s discuss these items one by one although they are all interrelated
Quality Score (QS)
Quality Score is Google’s way of determining the quality of a keyword/search query/ad/landing page relationship and therefore the likely experience, good or bad, of a searcher seeing an ad. Google wants the searcher to have a good experience. Google prefers NOT to show an ad rather than make money from showing a poor ad. A major component of Quality Score (QS) is the click through rate (CTR) for a keyword and the CTR rate for that keyword across the whole of Google and the CTR overall for all campaigns within an account.
Quality Score is shown as a number between 1 to 10 with 10 being the best you can be and 1 the worst you can be. Typically a QS of 10 will receive high exposure and lower costs per click and a higher Adrank.
A QS of 1 will make it virtually impossible to make a profit from Adwords because it will require a very high keyword bid price and in any case your ad will rarely show.
QS is not in fact a number between 1 and 10… this range is shown purely for convenience. I don’t know the exact range but it would be more useful to think of it as a range from 1 to 100 or even 1 to 1000.
QS is recalculated at the keyword level EVERY time the search query prompts the keyword/ad display… NOTE the search query is not necessarily the same as the keyword. This is very important to understand.
Adrank, Bids and CPC
Google definition of Adrank is as follows. Ad rank is the position occupied in the sponsored links listings.
Adrank = QS x Bid Price
For example if two competing advertisers are bidding as follows and achieve a QS as shown then this formula determines which one shows higher than the other for that specific search query
Advertiser 1 Adrank = 45 x R3 = 135
Advertiser 2 Adrank = 30 x R4 = 120
Since Advertiser 1 has a higher Adrank its ad will appear higher than that of Advertiser 2 even though the bid price for Advertiser 1 is much lower than that for Advertiser 2
All things being equal Advertiser number 1 will get a higher CTR purely by virtue of being higher in the results but more fundamentally the Advertiser will pay less per click than advertiser number 2. In fact Advertiser number 1 will pay R2.68. The amount paid by Advertiser number 2 will depend upon the variables of the next lower Adrank advertiser but it will be higher than R2.68 and could be considerably higher.
In summary there are important specific relationships between QS, Adrank and actual cost paid for a click (CPC). In practice the higher the QS the higher will an ad rise in the listings and the lower the cost per click will become thereby perpetuating an ongoing optimization opportunity to those advertisers who understand how to manipulate all the variables simultaneously. In addition the higher the QS the more often your ad will be shown
You can have the greatest Adwords campaign in the world but if you get the landing pager variables wrong you will never be able to optimize for maximum sales at minimum cost.
It’s not just sensible to understand how to optimize these variables it’s vital if you’re a serious Adwords user.
My latest campaign which involves selling Vuvuzelas (see my site www.vuvuzela.com) has achieved the following in the space of only 5 weeks or so:
1. Total Adwords cost since campaign started shortly after the end of The Confederation Cup = $49.80
2. Total sales exceed 3000 (I don’t manufacture… I just sell against an order which means all cash sales before despatch so no stock, no debtors)
3. Quotes sent to almost 300 interested buyers in 32 different countries for total volumes in excess of 3.5 million.
Think about these stats for a moments… it is unimaginable how such a successful marketing campaign can be achieved for such a low cost of less than $50.
Without Google Adwords it would be IMPOSSIBLE. That’s the difference Google Adwords can make.