Google Adwords Explained

There is one central idea, one key concept that Google wants you to understand and if you get this right, Google will reward you with lower prices per clicks while your number of new customers will grow incrementally.

On the other hand if you don't get it right, you will pay more than you have to per click. The one thing that matters to Google is relevance.

Google's mission is to build a search engine that gives people exactly what they were searching for, as fast as possible. If you were searching for "Rain Forest Butterflies" they wanted to give you the very best and most popular butterfly websites on the very first page of results.

They have an amazing mathematical formula for figuring out who visited websites and why, and using that information in their search engine.

When Google began to sell pay-per-click advertising, they were extremely concerned that advertisers should offer messages that were highly relevant to the search enquiry.

Google rewards you for being relevant, and they let people who are searching vote for you. If your ad gets clicked on, it's relevant. If it doesn't, it's not. It's that simple.

The higher your click-through rate - i.e., the more people who see your ad and click on it - the less you have to pay for the position you want. But if you ads don’t interest visitors Google will make you pay more to get your ads to show.

What really matters is that your ads and your content be relevant to the keywords you're bidding on. Your message must match what the person is thinking.

When you think about your product or service you have to think about its relevance to the consumer who is using Google to find a supplier. If you can put yourself in the consumer’s position and write ads that appeal to them the number of clicks on your site will increasedramatically.

The price you bid is almost never the price you actually pay. You almost always pay less.

First, it's a little bit like EBay. You pay 1 cent above the position below you, not the maximum that you bid. But there's an even more important secret that is the key to getting lower and lower prices, even while other bidders are jumping into the game:

Your click through Rate (CTR) is more important than how much you bid. The click through Rate is the percentage of people searching who actually click. If 100 people search, your ad shows up 100 times, and one person clicks through, that's a 1% click through rate. So let's say I have a 1% CTR and I'm paying $0.50 for position number Two.

Now let's say you have a 2% CTR. If you play your cards right, you may only have to pay 31 cents to get position number two and knock your competitor down to position number 3.

That means that you were 2 times as relevant, and you got to pay 1/2 as much!

The rules can be very simple, but the implications are huge. When you achieve high click through rates, you can pull your bid prices down, and yet stay at the same position on the page, while your traffic goes up.

The difference can be quite amazing. Here's an example of two ads - they are almost identical but one got nearly twenty times the CTR as the other:

Popular Networking Terms
3 Page Guide - Free PDF Download
Complex Words - Simple Definitions
www.network-experts.com.au
2 Clicks - CTR 0.1%

Popular Networking Terms
Complex Words - Simple Definitions
3 Page Guide - Free PDF Download
www.network-experts.com.au
39 Clicks - CTR 3.6%

Notice what happened: All that has changed is the reversal of two lines - and the click through rate jumped from 0.1% to 3.6%!

That means that the second ad gets more than twenty times the traffic of the first and importantly you could lower your bid prices and get more click throughs for the same money. Just think how much money you would be waisting if you didn't know this simple fact!

Push your bid prices down, down, down while your traffic goes up. Beat your best performing ad, and you can get more and more traffic for less.

Google ranks your ad higher as your CTR goes up. That rewards people who have more money than brains.

While Google may tell you simply to bid more, the major reason that keywords get made 'inactive' is this: the message in the ad doesn't match what the person wanted when they typed the keyword into Google!

How do you fix this problem? By organizing your keywords into narrow themes and by testing different ads that match people's searches.

Then watch as people's clicks vote on the words that actually sell. This is an absolutely foolproof method of getting your ad placed higher on the page.

The success of your campaigns depends on the keywords you bid on, specifically: 1) Choosing the right ones 2) Choosing enough of them 30 Bid low to start and monitor performance 4) Develop two ads for each campain 5) Replace the ad with the lowest CTR

The number one mistake most people make is bidding on too few keywords. If you're only bidding on less than 20 keywords, you'll have a very hard time making it work. That's because the keywords that you're bidding on are the same ones everyone else is bidding on.

You need at more than 150. As a matter of fact, a thoroughly designed campaign for most products or services could have as many as 1000.

Why would you bid on 1000 words and phrases? Because if you sell computers, there are probably hundreds of other bidders for "laptop computers." But if you bid on "Toshiba R400 tablet notebook" there will only be a handful of other bidders and you can get those clicks for small change.

The following two documents produced by Google may help explain this a little further.

Agency Optimisation Tips

Search Engine Optimization Starter Guide