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Google AdWords Explained: Growing Your Small Business with this Cost Effective Marketing Tool

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Google AdWords Explained: Growing Your Small Business with this Cost Effective Marketing Tool

By Caron_Beesley, Contributor
Published: March 24, 2010 Updated: November 9, 2011

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.

There are many tactics for optimizing your PPC advertising campaigns, read *Targeting your Search Advertising for Success by Carrie Hill of *SearchEngineWatch.com, for more tips.

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.

About the Author:

Caron Beesley


Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley


Adwords can be very helpful to a small business but like other posters have said you can't go about it in a haphazard fashion.Your first consideration is what are you trying to achieve with Adwords. Getting 'more visitors' isn't it. More visitors is just more visitors, businesses need more qualified visitors. Visitors that you can convert. Once you have a good idea of what type of visitors you need then you can go about researching keywords to use in Adwords. There is a ton of free information available on optimizing Adwords and developing quality ads.Also, in regards to cost you can limit your spend in Adwords. So to make a blanket statement that Awords is a waste of money is wrong. You can spend as little as $5 a day on Adwords or thousands of $ a day but first thing first is having a clear goal and plan of how to get there. Mark Stewartwww.theadnerd.com
I totally agree of all information above. I have several small businesses online and I experienced a lot of problems before but now I am in a good progress using Adwords. You must remember to use it in a proper way so that you will have good traffics and you will earn a lot from it. Learn more about weight loss menus at fastestwayweightloss.com/. Thank you! -- This post was edited to remove a commercial link. Read our discussion policies for more Community best practices.
I completely disagree with Jeff Yablon. The reason AdWords doesn't work for most small businesses isn't the price. The reason is that they don't know what they're doing, basically. We are Certified Analytics IQ specialists, and we have run many many successful AdWords campaigns for both small and larger business. We have run campaigns for as little as $50 / mo that generated dozens of qualified leads, produced sales, and seen a positive Return on Ad Spend. But the whole Pay Per Click system has gotten quite complex, so much so that you really need a specialist to manage this for you. Most SBOs aren't experts in Internet marketing. They have fallen under the delusion that it is simpler than it is and so they want to DIY. We have a homegrown, tested and proven approach to AdWords management. We have built it over much time, trial, experimentationn, error and success. If anyone is interested, DM me.
More businesses have found benefit from spending initial marketing dollars on Search Engine Optimisation and improving the readability of their website. In the least businesses should spend time looking at how they can maximise the interactions between the organisation and the customer. Pay Per Click advertising is most effective when there is a compelling offer and the company can drive people through to a definite purchase. Service providers and people that offer something that can't be easily 'categorised' will struggle to find great value in PPC advertising.--This post was edited to remove a commercial link. Read our discussion policies for more Community best practices. Message Edited by NicoleD on 02-05-2010 09:43 AM
Google is really making big money from this adword of a thing. But the good thing is that you participate in this huge money via adsense ____________Buy Biometric MonitorsMessage Edited by NicoleD on 01-25-2010 11:43 AM
Google is really making big money from this adword of a thing. But the good thing is that you participate in this huge money via adsense ____________Buy Biometric MonitorsMessage Edited by NicoleD on 01-25-2010 11:43 AM


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