Getting Started with Pay-Per-Click and Google AdWords

This article is part of a 4-part series on Getting Started with Pay-Per-Click and Google AdWords. If you'd like to review these posts, click the links below:

• Getting Started with Pay-Per-Click and Google AdWords
• How to Size Up a Market in PPC
• How to Get Started with Google AdWords
• Tweaking Google AdWords for Higher Performance

Making the first page of an organic search in your niche is a sign you've done your homework - both as a marketer and as an SEO player.  And organic rsearch is a very powerful tool for marketers, and can privide significant sustainable advantages over your competition. But the key word, no pun intended, is "organic." And nothing organic sprouts up overnight...

Recognizing this, over the next four blog posts, we're going to look at:

• When pay-per-click (PPC) advertising makes sense
• How to size up a market in PPC
• Getting started with Google AdWords
• Tweaking Google AdWords for higher performance

This post provides the background a newbie needs to enter the world of PPC.

In the next post, we setup a Google AdWords account step-by-step. We also look at ways to generate keywords, manage costs, and run split tests. Split tests allow us to compare different ads against the same keywords to determine which pulls better.

When PPC Makes Sense

There are times when instant first-page visibility is vital. For example, when you want to test a new business idea and need a fast feedback loop. Within ten minutes of setting up an account at Google AdWords, you could have traffic flowing to your survey, opt-in form, or product sales page.  PPC is not a replacement for SEO.  But if you want to do a fast test, or need fast results, and have some money to spend, PPC is a useful tool.

Placing Google AdWords in Historical Context

Google AdWords is a direct marketer's dream. Back when direct marketing meant "direct mail," the most successful firms methodically tested lists, offers, headlines, and layouts. Whatever combination performed best in limited mailings was then sent out en masse.

Today, Google AdWords enables you to test keywords, bidding strategies, ad copy, URLs, and landing pages. 

What You Must Know Before You Start

Done right, Google AdWords can pay off in market intelligence and enrich your business. Handled without care, it can burn a hole in your wallet.

The Value of a Click

To get your money's worth; you must have a clear idea of what each click is worth to you. If you know your average order size, profit amount and conversion rate (how often a lead becomes a prospect or a prospect turns into a customer), you can estimate the value of a click.

Each ad should have a single purpose - to generate leads or to drive transactions.

For "lead gen," an opt-in page that captures contact info in exchange for a free download should convert at around 10-12%. If you have an exceedingly good "message-to-market" match bolstered by strong copy, you might convert as many as 30%. For online transactions, expect a conversion rate between 0.3 and 5% (not unlike direct mail).

The Cost Factors in Your Learning Curve

The main factors are getting acquainted with PPC and the degree of competition in your market. With some persistence, you'll come to understand a complex set of variables and find ways to leverage it profitably. For example:

• Which keywords are useful and which are noise
• What influences keyword pricing
• How to target your ad to a distinct audience
• The elements of effective copy, and
• The interplay between bidding strategies, placement on the page and the likelihood of your ad getting clicked

Regarding competition, beware that your rivals may have:

• Stronger brand name recognition
• More experience with PPC
• a "trust discount" (big advertisers with positive track records may receive this)

Conclusion

By no means do large companies have a lock on AdWords know-how.  Plus, the rapid feedback PPC provides can help you choose more potent keywords in your SEO efforts as well. In our next post, we look at how to size up a market in PPC.