23 Jun 2011

3 Reasons Why Your Business Is Not Getting The Desired Return From Its Paid Search (Google Adwords)

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Most businesses have either tried paid search or they have heard about how effective (or not) it has been for others.  There can be a list of reasons why a paid search campaign works or fails, but here are three questions you should ask yourself to make sure you’re going in the right direction.

Firstly, is paid search relevant to your business?

A fundamental characteristic of paid search is that for it to work, people have to be looking for your product or service online or looking for a related issue/product/service that has a logical connection with your business. In other words, if no one is searching online for anything to do with your, say, industrial widgets or speciality services, then no one will click. In that case, for the most part, gaining a profitable ROI from paid search is going to be tough. Your paid search campaign must use keywords that are searched for in sufficient numbers online to generate traffic to your website that is made up of prospective customers.  If it doesn’t, consider putting your marketing budget elsewhere.

Secondly, what is your average profit per sale?

Assuming that your market/product is searched for in sufficient numbers online, then how much profit are you likely to generate from each sale? Will you spend more on clicks than you could ever make back in sales?  This might seem like an obvious question, but unfortunately there is no shortage of businesses making a loss on their paid search campaigns.  It’s worth doing the simple sums…

For example, if you need an average of 25 paid search clicks to generate one enquiry, and it takes an average of 10 enquiries to make a sale, that makes 250 clicks per sale. Could you then make a profit if you were paying £2 per click?

Obviously all ratios and click costs are different for different businesses and industries, but doing some simple sums upfront could save you money down the line.  In fact, it’s not uncommon for a business to adapt a product or service’s pricing so that it does generate sufficient profit to fund a paid search campaign.

Thirdly, is your campaign being managed with ‘intelligent common sense’?

For want of a better term, the phrase ‘intelligent common sense’ is one I coined a few years ago in attempt to try and describe the approach businesses should take towards their marketing strategies and messages. For paid search, it means using the intelligence you can gain from tools such as Google Adwords and Google Analytics regarding how people are finding, clicking on and using your website, but then importantly, applying some common sense as to how you use that information.

For instance, Adwords might be telling you that certain keywords are gaining a healthy click-through rate, so now is a great time to sit down and use your common sense; what new/related keywords can you add to the list that perhaps Google’s own keyword tool has missed? Or, can you update your advert text so it grabs the prospective customer’s attention but also stands out against the other adverts appearing alongside yours? But remember, keep applying that common sense – you don’t just want as many clicks as possible, you want clicks from good quality prospective customers, so the text should also be balanced to gain the right mix of volume and quality. This aspect of constantly using the data/intelligence and interpreting it with common sense is critical for you to ultimately improving your enquiry numbers.

This is the first of several paid search posts I will be adding, so check back for the next article.

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Marketing and business growth specialist.
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