Online Advertising: Pay Per Click and Google Adwords

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Online Advertising 101 22 Aug2014

Online Advertising: Pay Per Click and Google Adwords

Ok. So you’ve got a business and want to get more customers and you have a little birdy telling you “we must advertise!” You have heard that online is the way to go.

Advertising historically involved TV commercials, billboards, magazine ads, newspaper ads & editorial, letterbox drops and so on. You had to have pretty big budgets for the ads as well as production and, at the end of any campaign, you had little idea of how effective your campaign had been. Cue online advertising.

Online marketing can be highly targeted and highly measurable. It is also much more affordable than traditional campaigns which allows for small to medium sized businesses to engage and attract customers much more effectively.

How should I advertise online?

There are a number of options to advertise online. One of the easiest and most affordable is through search engine advertising such as Google, Bing, Yahoo. These search engines generally engage in Pay Per Click advertising. Pay Per Click (PPC) is one type of online advertising that is highly targeted and delivers your ad into the eyesight of active responders.

How Does it Work?

With PPC advertising, you only pay if your ad is clicked on.

Google Adwords is Google’s version of PPC. And you will be familiar with their ads no doubt, which appear above and to the right hand side of the organic search results of the search engine. Setting up ads to appear on Google is quite straight forward, as each search engine will guide you through it from their website. However, it’s not as simple as just paying for a space. In order for your ad to appear, you nominate keywords. For example, if you are a florist in Melbourne you might select “Flowers Melbourne” as your keywords and if these keywords are typed into the search engine your ad goes into the running to appear. You can choose as many or as few keywords (or keyword phrases) as you like. Once your keywords are typed in by someone your ad goes through a bidding per keyword model to ascertain where and if your ad will appear.

How Does The Bidding Model Work?

Many different advertisers are often bidding on the same keywords and hence the bidding model is used to determine the display position of the ad.
Google AdWords displays a maximum of 11 ads per page. Often you see three ads above the organic search results with a further 8 ads down the right hand side. The most expensive position is at the top and the cheapest at the bottom of the right hand side.

If and where your ad appears is determined by your maximum bid per ad. This is a price which you nominate that you are prepared to pay if someone clicks on your ad. You can bid as little as 5 cents, but marketing analysts recommend setting this at between $2 and $7 to ensure first place.

Your maximum bid however, is not necessarily what you will pay per if you ad is clicked on. The cost per click is determined by the following factors:

  • Number of competitors bidding for that word
  • Position of the ad in the search result
  • The quality of the ad and relevance to the keyword
  • The quality of the website that users end up on
  • The relevance of the website that users end up on to the keyword
  • The click through rate of the ad (how many people click the ad compared to how many times the ad is displayed)

If you select specific keywords and you have a great landing page you will develop a highly targeted digital marketing channel.

The Best Thing About PPC Advertising: Analytics

PPC advertising gives you enormously detailed reporting and analytics so you can tell exactly how many people clicked your ads, what each ad cost, how many times your ad appeared against how many times it was clicked and much more data. This makes it incredibly easy to calculate your return on investment and justify or adjust your marketing spend. Google Adwords allows you to set your daily or monthly budgets so that you know exactly what you are going to spend. You can also change advertising, budgets, keywords at any time, so you can respond to your analytics immediately.

But Beware…

Whilst advertising mediums may have changed rapidly over the last decade, basic advertising strategy has not. With all advertising you should be extremely aware of ROI. So you need to get all your ducks in a row well before you invest.

The very first thing to do is to set your goal. Why are you advertising? Align your goal with your business strategy and ask yourself what do you want people to do as a result of your advertising? Ensure your ad is developed to get you the results you want. This sounds basic, but so often ill achieved. Develop a dedicated landing page for your campaign and choose “exact match” relevant keywords.

Some online consultants recommend that on your landing page, you do not sell your product or service but instead offer a quality free resource – a video resource, an ebook, a free gift, a sample – something that is directly related to what you are ultimately selling. By teaching people about the subject matter of your product or service, you are building a relationship and establishing trust, focussing on long term engagement. Whatever you offer, you must ensure that it is delivered via email which allows you to stay in contact with the prospect. Something to think about.

There are numerous platforms for online advertising – and some good websites out there that talk about the pros and cons of each. For more information I recommend visiting the following websites which have instructional information about how each works:

Google Adwords:
Yahoo Advertising:
Bing advertising:
Facebook advertising:
Compare PPC advertising:


Keyword/s: They are the words or word phrases you choose for your ads, and will help to determine where and when your ad will appear. When choosing your keywords, think like your customer and what they would be searching for when they want your product, service or offer.
Click through rate: It measures how many people who have seen your ad click through to your link destination
Landing page: Your landing page is the page on your website to which you’re driving traffic from your ad
Impressions: An impression is the measurement of how many times your ad is shown

- Catriona Fox

This is a guest post from Catriona of Loud and Boomy in Canberra.  Catriona is a communications extraordinaire with a strong background in Marketing, PR, & Communications.

Catriona Fox
Loud and Boomy

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