Thursday 5 February 2009

Making AdWords Cost Less And Earn More

Last week two clients came to us without anyone running their Pay Per Click (PPC) Campaigns. Their biggest problem wasn’t that they weren’t selling much. It was that without someone to look after their campaigns they were losing a lot of money. Our first job then was to put a bandage on the leaking Ad Groups.

If you are in the same boat then the good news is that you are only a couple of simple steps away from effective damage control that will show instant results.

First it is important to get a handle on the data. In the Reports section of your AdWords page you can create a report tailored to fit your needs. It is a simple way to look at the details of all your Ad Groups in one place.

Now, let’s say you are happy to spend 40% of the cost of your product on acquiring the customer. With this in mind it is a simple job to go through your campaign and switch off all the Ad Groups that exceed your margins. This weeding process ensures that only the profitable Ad Groups are left on.

This is all we did for our clients. So what were the results?

These are the results for one of our clients taken from the account snapshot. This first graph shows the Cost Per Click (CPC). We can see that from the 19th January when we turned off the least effective campaigns there was a marked reduction in CPC. And what’s more, when we got rid of all the campaigns with high Click Through Rates (CTR) and low conversion rates we saw the Conversion Rate leap up.

This was about more than reducing the scale of the campaign. This graph shows that the conversions have not been harmed by the dramatic reduction in number of active Ad Groups and reduction in spending.


By keeping track of your margins and keeping within them you can easily assess whether your Ad Campaign is worth it. Turn off Ad Groups that aren’t doing you any favours and whatever your budget you should see an immediate increase in efficiency.

You might have turned off some Ad Groups that bring you lots of business but at a high cost. The next step is to go through these and tweak them to make them more effective. A good example of this is in refining ad copy.

Some groups will have a high CTR and a low conversion rate which makes them a drain on your AdWords budget. In many cases this is because the copy does not match the landing page. People like what they see in the advert but not on the page. A common problem is that the price is too high when they get to the product page. A simple fix is to put the price in the copy. The result will be that conversion levels will stay the same while the CTR will drop off as people unwilling to pay your prices are put off.

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