Category: News & Trends

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Know Your Cost Per Acquisition to Be Profitable with AdWords

To use pay per click advertising successfully you really need to know what your cost per acquisition is or rather how much you are willing to spend to get a new customer and still have profit left over. Without knowing your cost per acquisition, you can actually be paying Google AdWords for each new customer sale you make or each new customer your get. Google will work hard to spend your money, but it is your job to make AdWords profitable for you.

So, do you know how much it costs for each customer? How to you figure this out? A lead conversion in Google AdWords does not mean a sale. The formula for each business is different. One of my clients told me that for their business, it takes 10 leads to make a sale. Typically the higher the value or price of your service, the more lead conversions you will need to make a sale.

AdWords will track the lead conversions for you, but you need to track sales generated and each month look at the sales generated, total spent on advertising in all areas and then extrapolate to determine your cost per acquisition. In some cases when clients review this information they find which avenue is a better lead generator for their business or that one is more cost effective to use than another. Without this additional information and careful review, you may be spending more than you should on generating new business.

Once you know your desired or average cost per acquisition, Google AdWords has some excellent tools to help balance your traffic and cost per click to keep you within your profit restraints. The conversion optimizer with a maximum cost per acquisition setting is an excellent tool. You can balance what you want to spend with what Google recommends. Remember however that Google is in the business to serve clicks and you need conversions and sales so make sure that the setting you use does not stretch your margin too tightly.

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What is Your Website Traffic? What’s Low?

That’s the question everyone wants to know… is my website traffic high, low or in between. For small businesses that are not start ups and have been on the web for over a year, I feel that traffic under 50 unique visitors a day is low.

If your website figures aren’t even in the double digits on the average in a 30 day period, you really need to start working to build your website traffic. Why have a website if no one visits it and if it does not generate leads for you?

Here’s another benchmark if you have over 100 unique visits a day and you are a small business your traffic is definitely in the normal to good zone. Higher than that around 200 visitors a day and you are doing great. If you have 30,000 unique visitors a day, you’d better be on a dedicated server before you give yourself a big pat on the back.

So if your numbers are low what should you and what can you do to boost them. Here are just a few suggestions to consider:

  • Start blogging but only if you can install a blog under your own domain name on your parent website’s server. That is really key! Offsite blogging won’t help you in this area.
  • Think about writing and syndicating articles at Google Knol, Go e-articles, ezine.com and other sites. The key here to your traffic will simply be the quality of your writing and the timeliness of your content.
  • The easy path is to drive traffic to your website with Google AdWords or MSN adCenter (for Yahoo and Bing). When you don’t have time to do the other things this is very workable. Pay per click costs but the traffic you can generate immediately to expose the world to your services and products is well worth the investment. Just make sure you are targeted and don’t create a branding campaign that just brings your impressions and clicks.
  • Work all your angles! Do you have friends with websites on the Web? Get links back from them to your site. Consider doing guest blog writing. Tap into your network. If you are a member of a national or regional association ask if you can guest write for their online archived newsletter or blog. You want links and exposure.

These are just a few ideas to consider. Typically pay per click as it is the easiest is the route most people will pursue when they have little web traffic. Take some time to make sure your website is generating the traffic you need to feed your business.

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Inflating Your Daily Budget to Force Clicks on AdWords Can Get You In Trouble

You may say this never happens, but as I review all AdWords accounts that are running when a new prospect comes to me looking for a new account manager, this happens fairly frequently. Personally, I do not recommend this action.

What I am speaking of is when an AdWords account is in trouble and an account manager cannot get clicks for the client. The account manager sometimes gets desperate and tries to force clicks. Here is the common scenario. The actual client wants to spend $1,000 in clicks a month. They typically will be in a business that has a high click cost auction. The acting account manager has decided not to set the cost per click in the account to a level that Google will consider the account in the AdWords auction and so as a result AdWords serves the ads infrequently. The client may be then spending only $200 or so of a $1,000 click budget.

The account manager panics as the client is pressing for click performance and so the account manager sets the 30 day budget to $7,800 or $260 per day instead of $33.33 per day. The account manager is banking on the fact that the client’ cost per click is really too low to be in the auction and that AdWords won’t deliver the $7,800 in clicks in a 30 day period.

This is an actual scenario that I have seen just last week and not infrequently. I consider it is a very dangerous one. Google could, if something changed in the auction, actually deliver the $7,800 for the month in clicks and legitimately bill the client’s credit card for this activity. The client would have absolutely no recourse in regards to getting a refund.

Scary, isn’t that scenario? But, I have seen it twice in the last three weeks and many times over the last eight years I have been managing AdWords accounts. I do not believe in putting any of my clients in this type of possible jeopardy.

A better scenario is to bid to be in the auction or drop some of the ad groups and just run ad groups that have the possibility of performing within the client’s “true” budget. In each case that I have seen this scary set up used, the actual client had no idea of what the acting account manager was doing with their account and that they had taken this tactic. I personally will never manage an account in this fashion.

How can you see if your AdWords account manager is playing this dangerous game with your money and credit card? Go into your account and review on the campaign summary page your daily budget. It will be just below the campaign names. If the number there times 30 does not match the dollar figure you told your account manager you have authorized them to spend on your behalf with AdWords, you need to make a quick phone call to them to challenge their tactics. Remember, if Google could deliver the clicks to this inflated budget – and there may be a possibility they could – you would be billed and you would have to pay.

If you are looking for a honest and savvy Google AdWords account manager, I invite you to check out our AdWords services. My firm, McCord Web Services, is a Google AdWords Certified Partner and I am personally also a Google AdWords Certified Individual.

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Google AdWords Dynamic Keyword Insertion Tips

Don’t set up ad groups that target location names making it difficult to manage your ad groups. Consider using Google AdWords dynamic keyword insertion to do the work for you and keep all your location names in just one ad group.

The key to using Google AdWords dynamic keyword insertion is to carefully structure your account so that your keywords make sense with your ad text. For me if I am targeting 10 to 50 city locations say for a plumber and my keywords would be things like Waldorf plumber, Clinton plumber, Ft Washington plumber, etc. I would make sure that my ad group only contains variations as I have noted. Then in my ad text I would craft an ad that would look like this:

{KeyWord: Local Plumber}
Call for fast plumbing services for clogged
drains, sinks, toilets and bathtubs

Let’s dissect the ad text above a bit. Note that Keyword is spelled KeyWord in the curly brackets. This tells Google to make the keyword they are inserting with each letter of the beginning of each word as a capital. If I had entered keyword instead of KeyWord then the letters would all have been lower case. Note I also added default text after the : in the ad title. This text will be used if my keywords that would have been inserted makes the title go over the character count.

The great thing about dynamic keyword insertion is that Google takes the keyword phrase in your ad group and puts it in the spot where you have the curly brackets when the keyword matches a search query. This is very powerful for creating user centric ads which typically will lead to increased converions. Additionally as the keyword in the title now matches the user’s search query, Google will bold the  text drawing the readers eye to your ad.

All ad groups can’t use dynamic keyword insertion, but in many cases with properly crafted ad groups you can really move your AdWords program to the next level in regards to performance.

If you don’t have savvy AdWords management now, I invite you to visit our AdWords services page. McCord Web Services is a Google AdWords Certified Partner.