Google Ads campaigns

PPC is a general term for ads we pay for, albeit only when they’ve been clicked on, and the user has been transported to our website. CPC- (Cost Per Click) determines the cost per click of an ad. CPC is one of the basic elements considered during an AdWords campaign - it determines the costs incurred for the campaign.

CTR (Click Through Rate) - this is the click-through rate of the ad, i.e. the percentage ratio of the number of ad reactions to clicks. A high CTR indicates that the interest in the advert, or campaign as a whole, is high. This is an important, first element indicating that the undertaken promotional activities have been successful.

The costs of clicks in AdWords Ads fluctuate continuously. But there are several factors that determine the cost of clicks:

• The competitiveness of a phrase. The keyphrases brining the most profit are usually the most competitive. Advertisers usually set higher maximum rates that are able to pay for each click.
• The ad’s position and results page - if we want our ad to appear high, and on the first Google results page, we should set the appropriate rates. The first page of Google is usually exposed to most interaction, therefore the top ad positions should have additional support that can attract customers - thus increasing CTR.
• The quality score - each individual phrase (taking into account the content of the ad and the page to which it directs) receives a qualitative score on a scale of 1 to 10. Meeting a higher rating makes it possible to achieve higher ad positions, at a much lower cost than that of the competition.

All the above elements are connected. By setting the maximum cost per click, we simultaneously decide whether the ad will be displayed in the highest Google positions. We also get a quality result (which can change and increase if our ad has the appropriate CTR).

The optimisation of Google Ads is a broad term for a series of undertaken activities that strive to achieve the most effective results with the lowest possible budget. Optimisation should be carried out cyclically, based on information and data obtained from the campaign. See our list above to learn what ‘activities’ really means.

Enough experience in running AdWords campaigns and related ads will allow you to get make an initial start, and avoid erroneous and unfavourable solutions. But each target group, industry and website have specific demands. These demands need to be matched and met in order for the campaign to produce most success. It’s like releasing your average, low-suspension car on an off-road track. Will it get you to A to B? Possibly. But it might take more than it needs to, and success is never guaranteed. That’s why you invest in a new suspension, thicker tires, bigger engine, to make the road as quick and efficacious as possible, without damaging or making errors in the long run.

That’s why it’s necessary to constantly monitor which solutions bring the best effect, and apply changes if need arises. Additionally, the activities undertaken by your competition also change and evolve - which should be taken into account. They affect our advertising environment and the rates themselves. If the competition is not rightly tackled, and our methods don’t comply with the trends, we might lose the battle.

• Phrase modification – Adding/Removing specific phrases or matching methods - focusing on the costs and effectiveness of given solutions.
• Modifying the content of Ads - limiting the content to the most effective, persuasive designs, thus providing a higher CTR and better conversion.
• Landing Page Updating - Modifies the targeting of your ads to specific website landing pages. This shift increases the performance.
• Changing Rates - Increasing rates may be better for some ads, while lowering them can be equally effective for others, thus reducing costs. Whichever applies to your ad is strictly determined by optimisation.

These are the standard, basic elements subject to optimisation during the campaign. There are tons of other aspects, of course, that need consideration, some of minor, some of major importance. Optimisation allows us to determine which strands ought to be prioritised or implemented to the fullest, in order to achieve the incoming traffic from AdWords ads, without spending a fortune.

As a rule, it is recommended to purchase sponsored links when your products or services cost roughly over twenty pounds, or 25 euros. However, you should bear in mind that in some cases, a customer may click a single time on your online advert, but he/she will return to buy more, acquiring you a regular customer. So even if the customer who heeds your offer spends less than £20 at once, they will make several subsequent purchases over time. This permanent impact is as valuable as a customer who makes a single, but more expensive purchase.

If your goods or services are therefore inexpensive, but the nature of your business appreciates regular customers, and steady profit gain, Google AdWords should still be your primary solution/means of online advertising.

The ROI (return on investment) is a determinant of the profitability of an AdWords campaign. In the case of AdWords campaigns, it’s the ratio of profits to costs incurred for advertising.

We can calculate it with the following example formula:

ROI% = (Revenue- (production cost + advertising cost)) / (production cost + advertising cost)

A score of zero indicates that the total cost of the ad has returned. A result of 25% means that the investment has paid back, and we have consequently obtained 25% additional income. 50% means that we have earned an additional 50% profit from the Ads investment. And so on and so forth…

When ROI% turns negative, then we can conclude campaign is ineffective – not only it fails to obtain profit, it also generates losses. If, in an unlikely scenario, this occurs, either the strategy needs to be amended, or the whole system scrapped.