Those of you who offer products or services online might be familiar with the term AdWords. It is a useful tool developed by Google to help online businesses reach a wider audience. While browsing the web, you will come across plenty of valuable resources about the subject.
But despite the array of information available on Google AdWords, advertisers find it difficult to optimize their account for maximum visibility at the lowest cost possible.
In this article, we will discuss Google AdWords and explain the key terms to get a basic understanding of the topic. We will also discuss the different types of keywords and some cost-effective bidding methods that will reduce your advertisement costs. Finally, we will walk you through various methods to optimize your AdWords and help you develop an efficient campaign strategy for your business. In this blog post, AdWords optimization implies reducing the CPC (cost per click) for maximum conversions.
To better comprehend the content of this post, here is a digestible breakdown of the topics that we will cover in the following sections.
- Google AdWords
- Basic AdWords Terms
- Keywords types and groups
- Strategies to reduce your CPC
Table of Contents
What is Google AdWords?
Online shopping has become a common practice among millions of people around the world. According to Statista, more than 2 billion people are expected to buy goods and services online in 2020. As more and more people continue to shop online, advertisers have come up with new ways of advertising. One way to reach shoppers online is by using Google AdWords.
According to Wikipedia;
“Google AdWords, also known as Google Ads, is an online advertising platform developed by Google, where advertisers pay to display brief advertisements, service offerings, product listings, video content, and generate mobile application installs within the Google ad network to web users.”
The ads appear on Google’s Search Engine Results Page (SERPs) and show up when users type a search term related to what an advertiser offers. In contrast to the traditional advertising methods like newspaper and radio, the advertiser is charged only when a user clicks on their ad.
Google AdWords allow advertisers to decide the amount of money that they are willing to pay for each click (PPC) on their ad. The rank and position of the ad on SERP depend on the price an advertiser is willing to pay and the Quality Score.
Below, we present a summary of these terms and other similar terms that will make you sound smart with Google AdWords.
Basic Google AdWords terms:
It is important to understand the terms and acronyms associated with Google Ads to get more clarity about the tool. You may not need to use all these terms, but a little knowledge about them can help you choose your options wisely and reduce your CPC.
- Impression: Impression refers to the number of times your ad shows up on a user’s screen for a certain search term
- CPC: CPC is short for Cost Per Click. It is the amount of money an advertiser pays for every click on the ad. The total price paid for total number of clicks is defined as the cost of the ad
- CTR: CTR or Click-through-rate is a ratio that shows how many users end up clicking the ad after seeing it. It is represented as a percentage and can be calculated as:
CTR = Total clicks on ad / Total impressions
- CPM: Cost per impression or shortly CPM refers to the amount of money you pay for every thousand views that your ad gets. You will have to pay the amount regardless of whether or not an action is taken by the viewer
- Quality Score: The Quality Score represents the relevance of the ad and the keyword for the user. It can influence your CPC as well as your ad position in SERPs.
- Campaign: Organizing a specific group of goods and services for ads is defined as a campaign
Now that you have got a general idea about the basic terms, let’s dive into the details about the keywords that you will use in Google Ads. It’s necessary because in most cases, a little tweaking with keywords can result in significant reduction in CPC.
In practical terms, using AdWords is similar to participating in an auction. Ad auction is an automated process in which search engines determine the validity and relevance of ads that appear in the SERPs.
Advertisers bid on specific search terms, called keywords, that users might type when looking for products and services relevant to what the advertiser offers. The amount of bid determines the ad position and the number of clicks it receives from users.
Types of keywords:
Generally, keywords can be divided into several categories, but for the purpose of AdWords, we will consider the two types of keywords. They are:
- Positive keywords
- Negative keywords
Positive keywords are those search terms that will trigger the ad, while negative keywords prevent the ad from showing up for specific search terms. In the later section, we will talk about the different categories of positive keywords and how you can incorporate negative keywords to lower your CPC and overall ad expenses.
Categories of positive keywords:
Positive keywords can be divided into three distinct categories. Each category or ‘keyword match types’ allows the advertiser to control who is seeing the ad. Hence, marketers can prevent their budgets from being used on ads for the wrong audience. The various match types are:
- Exact match: In the exact match option, the search term must exactly match the keyword to trigger your ad. This is the most selective option that can lead to profitable results.
For instance, if you own a digital marketing firm, a possible keyword for your business can be ‘SEO services.’ A user has to search for the exact same keyword to view your ad. We will use the same keyword to come up for phrase match and broad match variants.
- Phrase match: The phrase match option allows advertisers to be a little less specific about the users who can view the ad. Your ad will show up for the specific keyword but also for certain phrases that contain the exact keyword. An example of phrase match can be ‘best seo services’ or ‘seo services near me.’
- Broad match: In the broad match, your ad will appear not only for search terms that match your keyword but also for terms that closely matches it. This includes common misspellings, synonyms, and longer phrases that contain the keyword. An example of a broad match keyword can be ‘seo for financial advisors ’.
Managing keyword matching options for a lower CPC:
The keyword match that you need to focus depends on the type of service you want to advertise and the type of audience you want to target. Since exact match delivers the best results, maximum amount of your ad budget shall be dedicated to this option.
Bidding for phrase match should be around 75 percent of your Exact match because these searches will not be as specific as those generated by Exact match. Finally, your broad match bid should be the lowest because you do not want your ad to show up for poorly matching keywords. Hence, make it 25 percent of the Exact match amount.
Using negative keywords to lower your CPC:
You can significantly reduce your cost per click by adding negative keywords to your Exact and Phrase match ad groups. Negative keywords make sure that your ad does not pop up for irrelevant search queries or terms. This lets advertisers display their ads to users who are genuinely interested in their product or service.
For instance, you might have an Ad Group that includes keywords like ‘Leather Jacket Store’ and ‘Online Leather Jacket.’ You might also want to prevent your ad from showing up with certain terms like ‘Cheap’ and ‘for girls.’ The negative keywords will make sure that your ad does not show up when a user types search query like;
- Cheap leather jackets
- Online leather jacket for girls
Moreover, you will also prevent other variation of the search terms that includes negative keywords.
Include long-tail keywords variations:
The average CPC for your ads can become very expensive, especially if you are operating in a niche with fierce competition. One way to reduce your cost per click is by using long-tail keywords. Research already shows that long-tail keywords are responsible for 80 percent of organic traffic.
Brands with massive ad budgets can afford to go after competitive keywords and still rank higher in search engines. But small businesses or those who have just started their marketing journey lack the time and resources to break into the search engines and compete with big brands. The strategy can backfire and even make it hard for novice marketers to keep their business afloat.
Therefore, avoid bidding for the head keywords that large businesses go after. Instead, review your strategy and add long-tail and less-competitive keywords to your Ads Group. These keywords may not have a high search volume, but you can be certain about the quality of clicks. Additionally, you will pay much less for each click and generate quality leads.
Improve the Quality Score:
Every marketer who knows a little about Google AdWords, know that Quality Score is a crucial factor for determining your CPC. Google uses QS to assess the relevance of keywords, ads, and landing pages. Consequently, it calculates the position of your ads and determines the price that you will pay for each click.
It has been shown that AdWords accounts with QS of 6 or higher see a 16 to 50 percent decrease in CPC. On the contrary, those with QS of 4 or lower see a 25 to 400 percent increase in CPC.
Given the massive influence of the Quality Score on CPC, we share a few tips that can significantly improve it.
- Craft better ads: Use symbols and exclamation marks to improve your ad texts. This will increase your click-through without any extra spending.
- Use ad extensions: Google offers tools like sitelinks and ad extensions that magnify your ads, so users have more places to click.
- Manage your AdWords account wisely: Organize your ad groups properly and make sure they represent a clear theme. Don’t simply add keywords; instead, break it down into smaller groups so that they can be easily managed.
Lower your bids:
A simple way to lower your average CPC is by lowering your bids. With lower bidding, you will incur a lower cost for every click that your ad receives. This may also drop your ad position a bit, but you can still manage to get quality clicks for a lower budget.
Currently, Google allows you to choose between two types of biddings.
- Automatic bidding
- Manual bidding
Automatic bidding means that Google handles your bid monitoring, adjustment, and your CPC for each keyword. For beginners or those who have numerous tasks to focus on, automatic bidding is the right option. Google optimizes your AdWords and provides maximum value for your budget.
Manual bidding, on the other hand, gives you the freedom to tailor your ad campaign to your business needs. You control your budget and how much you want to spend on your keywords. Manual bidding is best for expert marketers whose strategy is constantly generating great ROI for their business.
Optimize your ads for location and device:
Smart marketing goes beyond the use of keywords. It focuses on demography, location, device, and the hours that drive maximum leads. Hence, consider the following factors to lower your CPC.
- Which day and hour generate the most traffic and leads?
- What devices are mostly used to view the ads?
- Where is most of the traffic coming from?
If you discover that a particular day or hour see lower conversion, you can stop the ad campaign for that day or hour. Similarly, you can increase your budget to make your ads more visible on days that drive maximum sales.
With geotargeting and other effective tactics, your ads will display only in areas where most of your potential customers reside. Hence, you will improve your CTR and Quality Score, thereby lowering your Cost Per Click.
Lowering your CPC is key to remain competitive in your niche. Now that you have all the tips at your hand, it is time to apply them to your ad campaigns and let us know about the results. Moreover, if you have other tips that we might have missed in the article, share them in the comments.
Mary Warner is an enthusiast blogger. Her compelling research and communication capabilities exchange offerings that have value for the reader. Her passion for writing has been an ever-evolving affair. She loves to share her views related to latest trends in marketing, technology, ecommerce, and the like.