Google Adwords – Tool For Business Growth

Google is a powerful tool to drive qualified traffic to your web site. With 87% of Australian Internet users using Google to find your products and services, it’s really important to establish a strong and sustainable presence in Google search results if you want to profit.

In this article we look at how you can profit from using Google Adwords.

The best way to do this for many keywords and in short time is the Google Adwords tool. However, many of the SME business owners and Marketers I talk to are concerned about the cost of advertising. Cost is important but not necessarily the most important area to focus…

More importantly, when spending money on advertising in Adwords is Return on Advertising Spend (ROAS).

If you achieve a positive ROAS then you’re making money from your advertising. We can assess the ROAS for every keyword search term in your campaign. With that information, we can identify keywords that make you a profit. Once we know this, you’re ready to ramp up your campaign to grow your profits.

An Example of How You Can Grow Revenue Online

Here’s a quick example (it’s a bit hard to follow but please bear with me because it’ll be worthwhile)…

how to profit from Google Adwords toolIf you sell a service that earns you $100 in revenue and you know that the cost to provide the service is $20, then you have an $80 marginal profit on each sale.

If you advertise your service using one keyword search term in Adwords (you wouldn’t use only one keyword but it illustrates the point), and you knew that for every 100 clicks, 10 people end up buying the service, then you have a 10% conversion rate.

If your cost per click is say $1.00 then 100 clicks costs you $100. From that 10 new customers contribute $80 each in profit = $800. Your ROAS is therefore $700.00 ($800 in marginal profit less $100 in advertising costs).

Here’s my question to you? Assuming there were 10,000 available clicks for this keyword in your target market each month, how much budget would you allocate to your campaign?

I know what I would do. I would allocate as much as I possibly could and eventually at least $10,000 per month! If I could get every available click, I would be making $70,000 net profit each month.

The point I’m trying to make here is this. If there’s money to be made through advertising your business on Adwords, it may pay you to invest in testing all the relevant keywords in your market to find the profitable ones. Then ramp up to grow your business!

Ramping Up For Super Profits

Imagine how powerful this would be if you had lots of profitable keywords?

So far, all we’ve talked about is one keyword in one campaign.  The growth you could experience would be exponential if we ramped up.  So what does ramping up entail?

Once we know what keywords are profitable, or even close to profitable, we can begin leveraging these.  First though, we pause the keywords we know are unprofitable.  This allows us to direct all of our budget to those profitable keywords and any that are close but not quite there yet.

Split testing ad copy

For every keyword, we display 2 variations of ad copy to searches.  By measuring conversions in our data, we will begin to find that one version of our ad is working better than the other.  Of course, we need a statistically valid sample of data to do this.  Once we have a clear winner, we pause the poorer performer and create a new competitor for the winner. Often this involves making a small change to the strong performer.  Then we “rinse and repeat”. 

Over time our marginally unprofitable keywords become profitable and we crank up pur budget to capture as much traffic as we can.

Landing Page Optimisation

The next step we can take in optimisation is to apply the same concept we just applied to our adverts to landing pages.  Incidentally, a landing page is a page we send visitors to when they click our ads.  They can be designed specifically to make a compelling offer or request some information.  This makes landing pages particularly powerful.  Anyway, we can create 2 variations of a landing page and test to see which performs best.  It’s sometimes called A/B Testing and here’s how it works…

Two variations of a landing page are created and visitors are sent to either one or the other.  Over time a winner emerges and we will be able to tell with confidence that one page works better than another.  At this point we replace the poorer performer with another page to compete with the winner.  Rinse and repeat.

Develop a Re-marketing Campaign

About 90% of visitors to your landing pages and web site will not take the action that you want (e.g. contact you).  Perhaps they are not ready yet, or maybe they were distracted or possibly they’re still shopping around to see what others have to offer.  Regardless of why they leave, you’ve already gone to the cost and effort to get them there.  It’s a shame to lose them now!

We can develop a re-marketing campaign to display your ads to these same people when they visit other web sites.  In effect we can follow them around when they visit other web sites and if the web site allows us to place an ad, we can do so.  This is a great way to keep reminding people about your business, products and services and these campaigns typically have high conversion rates.

There are many other tactics we can employ to continuously optimise your campaigns for better profitability.  What will happen if you were to continue this process over say 12 months? 

If you continued optimising, you would eventually create a dominant position for your business in Google.  Think about it.  When you KNOW what works and what doesn’t from months of testing and optimising, you will command better marginal profitability.  Imagine what happens when a new competitor begins advertising without knowing what you know.  They will find it extremely difficult to muscle their way in because they are not optimised and will be wasting money.  Many don’t know how to measure properly and will just give up.

I don’t know how many times I have heard people say “I tried Google Adwords and it was too expensive”.  It’s mostly because that are competing with professionals and established players.

Having said all that, it’s always possible to break into a competitive market.  Sometimes it takes patience and persistence and some investment in learning what works and what doesn’t. However, it can be done and we’ve proven it many times over.

In Summary

The Google Adwords tool is a powerful platform for driving traffic to your web sites.  With highly optimised campaigns and continuous improvement, you can achieve outstanding results.  You can also create a “barrier to entry” for new competitors.  It just makes so much sense.

If you would like to discuss this in more detail, please contact us and we’ll assess the possibilities for your business.  You never know, you could be sitting on a very profitable opportunity.  Contact us now!

Get the Free Worksheet

I have created a Microsoft Excel worksheet to help you estimate the potential in your particular circumstances. It’s just a guide but I think you’ll find it interesting.

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