Google AdWords Explained: Growing Your Small Business with this Cost Effective Marketing Tool
by Caron_Beesley, Community Moderator
- Created: March 24, 2010, 12:03 am
- Updated: November 9, 2011, 12:02 pm
Pay-per-click advertising has been around for many years now, and is the mainstay of Google's revenues--earning the leading search engine over $20 billion in 2008. There's a reason why Google AdWords has been so successful. AdWords, the "Sponsored Links" that appear to the right of your main search results on Google, offer small businesses in particular a relatively low cost and flexible way to pitch their wares and generate traffic to their Web site. This post briefly explains pay-per-click advertising based on the Google AdWords model - how it works, discusses ways you can determine if it's right for your business, and offers lessons learned from other small business owners.
How does Google AdWords Work?
Essentially, the Google AdWords pay-per-click (PPC) advertising service allows you to create your own ads, after paying a $5 account set-up fee. The ads then run in the "Sponsored Links" column alongside regular search results. You pay when someone clicks your ad and gets directed to your Web site. In addition to charging for clicks, Google has adopted a bidding process, which lets you allocate funds for, or "bid" on, the keywords that you want to trigger your ad - much like bidding for an item on EBay. The more funds you allocate to a particular batch of keywords (or in Google language, "the higher you bid"), the more likely your ad is likely to appear at the top of the "sponsored links" column. Learn more about the *Google AdWord pricing structure.
You can control spending by setting a spend limit per day. But bear in mind that if you are using a highly competitive keyword, you will quickly blow through your budget. Once up and running, your ads will only appear when someone searches for the specific keywords or phrases that you have selected to be associated with your ad. Google AdWords offers a *Keyword Tool that can help you choose and assess the relevance and popularity of your chosen keywords. The more specific and targeted your choice of keywords is to your particular niche, the more relevance your ad will have. Local businesses can also "geo-target" by selecting to have ads appear only in certain metro areas, regions or countries - which can help keep the cost-per-click low.
Do Google Adworks Work?
Yes, but only if you use them properly. As with all marketing tactics, you will need to monitor your metrics and make changes as you go. Keep refining your keywords and monitor the results. Google provides performance reporting that includes data on where your ads appeared, conversion rates, cost, and so on. This data is your best friend because it lets you see who your ads run up against, what searches they are appearing in, and whether you are really getting your money's worth from those clicks.
Are Google Adwords Right for Your Company?
Google AdWords and other PPC advertising services are not right for everyone. For example, if you offer a product or invention that is relatively new to market - consider whether potential consumers would even know to search for it?
But for most businesses - the sky is the limit when it comes to PPC advertising and when monitored and optimized regularly it really can complement your online marketing activities. I love PPC advertising when it's used locally. For example, if I need to find a plumber or organic pet food store in my area - I drop my usual cynicism about online advertising and appreciate the speed and directness that PPC advertising offers in delivering the right result without scrolling through pages of search results.
Lessons Learned from Google Adwords
If you are interested in using PPC advertising such as Google AdWords, read *Real-Life Lessons in Using Google AdWords. This New York Times article by Darren Dahl offers insights from small business owners about their experiences with Google AdWords and lessons learned that have saved them money on PPC advertising campaigns while increasing conversion rates.
Follow the Rules of the Road
Last but not least, if you plan to advertise online - whether you're buying ads on search engines or direct marketing through e-mail - you'll need to understand some basic government rules and regulations. SBA.gov explains these in its Guide to Online Advertising Law.
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