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James Parnwell

James Parnwell

Sneak Preview: 10 Secrets to AdWords Best Practice #2

Sneak Preview:

10 Secrets to AdWords Global BEST PRACTICE


Second of Four Introductory Articles by James Parnwell of TheOnlineCo.

Google AdWords for Your Business

In our last article, we talked about the first Secret to setting up Google AdWords to the Google Best Practices standards. That secret was:

  1. Do some Old-School Marketing Analysis.

And that process really needs to be done, so if you haven’t done it yet, go here and review that article before moving on to this one.

In this article, you’re going to use Secret #2, which essentially shows you how to set up and optimize your Google AdWords campaign to reap the best ROI – Return on Investment.

  1. Your Google AdWords campaign: Set Up Strong.

Now, you may think that’s it, but it’s far from over. To get the kind of results I’ve been able to get for clients over the last seven years as a Google Certified Individual and Google Partner, you need to learn the rest of the series.

  1. Keywords Matter.
  2. Create Google AdWords Copy that Sings.

But, for now, let’s press on. I promise to make it understandable for you!

Secret #2 – Set Up Strong

Perhaps the most common question I get asked is, “How much do I need to spend on AdWords?”

While there is no black-and-white answer to this question, there are some underlying truths to lay out before making an investment in AdWords.

There are 2 factors at play here:

Firstly, you set a sales target, a specific dollar amount of increase, in Secret #1. It will require a certain level of investment to achieve this target.

Secondly, you only have so much money in the bank.

So let’s get real!

You are going to need to invest 5-20% of that goal into AdWords to achieve your sales target. If your target is $10,000 in new sales per month and you want to spend $5 per day ($150 per month) or 1.5% of your target, then I’m afraid you are setting up weak. In my experience you will get such a small amount of traffic that statistically speaking your chance of getting a lead is very low. This is a scenario where conservative people want to “dip the toe” and see if AdWords works before investing properly. Unfortunately, it just doesn’t work that way.

For a sales goal of $10,000 per month I would suggest 5% is probably “dipping the toe” and depending on the competition in the market you may need to invest more to get a quantity of traffic to your website that is even capable of getting you some leads.

As I already mentioned, you only have a certain amount of cash to invest. If you genuinely can’t get to the 5% mark, then I would suggest delaying your AdWords adventure for a while and saving up 3 months’ worth of budget. You would be better investing your time into networking and personal selling for a time period. However, I suggest working through Secret #3 before making this decision.

There are some exceptions to the 5% rule of thumb:

  1. You have a very large, new sales target. One client I have has targeted a $300,000 per month increase in sales. A 5% investment at $15,000 per month wasn’t necessary for a trial. We lowered it to $6,000.
  2. You are in a low-competition industry/market. You will only know this after working through Secret #3. Sometimes clicks are very cheap so you can get a reasonable amount of traffic cheaply.
  3. You sell a high-value product. I have a client who sells a $200,000 product and wanted two sales per month. So their sales target was $400,000. However, once we worked through Secret #3 we found that a budget of $1,200 was sufficient to get their phone ringing.

Having given you all the exceptions to the rule I can confidently say that the 5% of target sales rule of thumb works for about 8 out of 10 clients we meet with. Remember, the goal is a positive return on investment.

Let’s get into Secret #2.

Secret #2

2.a. Budget

  • Have a realistic budget.
  • Aim for 5% of your Sales Target from Secret #1.

2.b. Google Analytics

2.c. Can I do this all tech stuff myself?

  • Setting up Google Analytics yourself requires a little bit of technical know-how. If your website is built with WordPress there are very simple plugins you can use; if not you may need to install code into the header region of your website.
  • If you think this is beyond you then maybe you need to have a tech support person handy.

Secret #2 – A Real-Life Example

We have a client in the Human Resources industry. They provide an employment service that pays them $7,500 per sale. Their goal is to provide this service 4 times per month and thus increase their sales by $30,000. So they decided to invest $1,500, which is exactly 5% of their revenue goal. Wise move!

In their situation it takes 5 leads to make a sale. Which means a lead is worth $7,500/5 = $1,500.

These guys are in a very tight niche. It’s highly competitive, but there is only limited web traffic. So let’s look at their results for the first three months.

Month 1

They received 59 clicks and paid $9.68 for each click for a total investment of $570.91. As I said, this is a small market so not a lot of web traffic. However, they received 8 leads, which at a potential sale value of $1,500 per lead means they got approximately $12,000 for their $570.90 investment. That’s a 21 times return!!!

It’s not often that we see such a high percentage of leads for clicks – this was 13.56%, which was approximately double what we expected.

Month 2

This month, at the client’s request, we trialled getting more clicks in a new market. They received 144 clicks and paid $6.19 for each click, for a total investment of $891.95. This month they only received 2 leads, which is still a potential value of $3,000 and a 3.3 times return.

We discovered that due to some external market factors there were not as many people buying that month. This combined with the increase in spend due to pursuing a new market meant the ROI decreased. However, they still had a positive ROI.

Month 3

We slowed pursuing the new market this month and dropped it altogether the following month. They received 114 clicks this month and paid $8.33 for each click for a total investment of $949.12. This month they received 3 leads, which is a potential value of $4,500 and a 4.7 times return.

All businesses are exposed to external market forces, so this client quite wisely rode out this slow period and took an acceptable return on investment, but not what he had enjoyed the first month.

Month 4

By this month we had ditched pursuing the new market altogether. They only received 77 clicks and paid $10.11 for each click for a total investment of $778.44. However, the slump was over and they received 9 leads, with a potential value of $13,500 and a 17.3 times return.

Takeaway Truths

There are several truths to be learned here:

  • Getting more clicks is not necessarily a good thing.
  • Quality is more important than quantity.
  • Even the very best campaign is subject to external market forces.
  • You need to implement Secret #1 and #2 in order to have a solid sense of what success or failure looks like.
  • You need to ride out a campaign for at least 3 months in order to get a full perspective of how your campaign is really performing.

Now you know how to set up a Google AdWords campaign to Google Best Practice standards. It took a little bit of tech work, and a little bit of math, and it had to be combined with Secret #1 or it wouldn’t make much sense logically.

  1. Do some Old-School Marketing Analysis.
  2. Your Google AdWords campaign: Set Up Strong.

 

Still, to get really good at this and avoid all the frustrations and discouragements we’ve already gone over in the first article, you’ll need to learn the following two techniques:

  1. Keywords Matter.
  2. Create Google AdWords Copy that Sings.

I hope you’re getting a lot out of this series! Now that you’ve tailored your campaign to produce the right amount and type of traffic, click here to continue with the series and start down the road to optimize Google AdWords in a way that most people can’t even conceive. I promise you that you’ll save a ton of money and start making amazing returns.

For a marketing analysis on how we can help you grow your business using AdWords, please contact us or for more information check out our eBook http://factory.theonlineco.net/ebook-google-adwords-10-secrets/

Here’s to your success!

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AdWords should give you a 5x – 20x ROI. This means you need to invest 5% – 20% of your revenue goal.

#adwordsprofitfactory #theonlineco

James Parnwell
James Parnwell

James is the Managing Director and resident strategist at TheOnlineCo. He is clever and creative with a flair for making complex things sound simple. He has been in the marketing game for over 2 decades and has watched the landscape slowly shift. James has his finger on the pulse of every aspect within TheOnlineCo, meeting with all clients as well as every core team member and strategising a specific plan tailored to each client.

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