If there is a statement that will upset experienced Digital Marketers it is this, “Google AdWords are a Ripoff! We tried this once and didn’t get any business.” When we talk to these people we generally find they lack a clear understanding of how AdWords work and how they can use Pay Per Click advertising to generate revenue for their business.
Now, I do not believe that AdWords (aka Pay Per Click) is the correct tool for every business that wants to market online, but Google is certainly not trying to ripoff their customers. What they are trying to do, however, is make a profit.
A Myth Dispelled
Almost seven years after Google changed the Pay Per Click auction model, some people still think winning at AdWords is all about bidding the highest cost per click. Many business owners shy away from pay per click advertising because they don’t understand how it works or don’t want to pay for the highest rankings. The fact is, AdWords ads are positioned based on a variety of factors:
- A good landing page - the page a user is directed to when they click on your ad.
- A good click through rate - the number of people that click your ad.
- A relevant advertisement - Google’s bread and butter!
Your bid is only one of many important factors. Your position is determined more by the relevance of your ad to the keyword search and by the click through rate the ad receives than by your bid. This is because Google makes more money the more your ad is clicked!
Show Me the Money
For example, let’s assume I own a store that sells used golf clubs and I am paying $1 per click for the keyword phrase “used golf clubs”. The myth many people believe is that a competitor can pay $2 for the same phrase and be ranked much higher. This is just not true.
If my ad generates 50 clicks a day versus 20 clicks for my competitor (because my ad is more relevant and my landing page is properly optimized) I will be ranked much higher. Why? Two reasons. Because Google deems my ad more relevant to the users search and thus more beneficial for them. Second, because I made more money for Google! My 50 clicks for a dollar each earned Google $50. My competitors 20 clicks at $2 only generated $40 for Google. I win.
And you can win too! Google AdWords can be extremely profitable for your business, but there is much more to the process than choosing keywords and determining your bids. If you are serious about growing your revenues via the Internet then be sure to reach out to a qualified professional for help.
Please comment on this blog or email me at stephen@jngstech.com if you have any questions concerning your company’s technical needs. Hope this tip finds you well. Have a fantastic day!
Posted under Make Money!
This post was written by Stephen Jennings on May 27, 2009
