Understanding Online Paid Advertising

www.SmallBizInternetMarketing.com.au 1

TARGET ADVERTISING

Only pay when it works.

Pete: In this session, I’m going to be talking about targeting advertising. I’m impatient. I

can’t wait months for SEO to kick in. I like to get my results today. So I want to talk to you

about how that can happen, how you can get your website on the front page of Google

straightaway. It costs money though. But if we manage it properly and we measure it, and

we then manage that measurement, we’ll be able to make some money out of it. I want to

talk about target advertising.

Google AdWords

Google AdWords program, for those of you

who don’t know the Google AdWords

program, basically when you go to a search

results page, the yellow section at the top

above the natural listings and the things

down the right-hand side are sponsored links.

So you can pay to get your website ranked straightaway for the keyword you want to

target. So this is a good way to fast track some of the testing things so that you have a

website that works before the SEO kicks in.

The big thing with Google AdWords is it’s pay-per-click advertising, not your traditional pay-

per-view advertising. In most traditional marketing, with radio, TV commercials, magazines,

you’re paying for the fact that people are going to view the advert, not that it works. If your

advert gets viewed by a lot of people but no one does anything, you still have to fork out

the $2,000 in media buy. With online advertising and pay per click, you only pay when

people respond to your marketing. It is the best form of marketing spend you can ever

have.


Why AdWords?

So just to reiterate. Why do AdWords? Firstly,

you get to target people who are actively looking

for your product and services. So unlike

traditional media where you are hoping to

interrupt people by buying a billboard or

interrupt people who are reading a magazine,

this is where you are in front of people who are

actively looking.

They’ve taken a proactive stance and they’re doing something, hopefully have their wallet

half open already, looking for the products and services you sell. So it’s much more

targeted, less wastage, which is a big thing.

As I said before, you only pay when someone responds. So your advertisement can be seen

by thousands of people. But if no one responds, you don’t pay a single cent. So you’re only

paying when material works, which is the best way to spend money. The other thing is you

get to pick the search phrases. So you go in and say, these are the keywords I want to target.

These are the keywords I’m targeting. These are the businesses and phrases I want to be in

front of. And you will go in and bid on that keyword. I will show you how to do that in a

moment. As I said again, it’s measurable which means it’s manageable, which means you can

control it.

How does AdWords work?

So how does AdWords work? From a pay-per-

click perspective, it’s an auction system. So the

price you pay is your maximum bid you’re willing

to pay for that keyword times a quality score. So

each cost is basically a keyword level. So you

don’t say, I want to pay $1 for every single click

for every keyword. It’s all based on individual

keywords and you pay differently per keyword.


So it’s the maximum bid, which is pretty straightforward, times three factors that make up

the quality score. Google has this thing called a quality score, which to them is a way to

just not give a person with the biggest wallet the best advert. It comes down to other

factors as well. These factors are click-through rate, which is the percent of people who see

your ad and click on it. So the more effective the ad, the higher people click through, the

cheaper your bid is going to be.

Relevance, how relevant is the ad to the keywords. If you’re bidding on blue shoes and

your advert says, we sell red shoes, it’s not that relevant. So Google penalizes you for that.

Also the landing page; it’s important that the webpages that your site has, the pages that

your ads are pointing to, match the keyword. So you have a website about red shoes or a

page about red shoes. You’re bidding on blue shoe and you send people who Google blue

shoe, who’ve seen an ad that says blue shoe, and land them on a page that says red shoes.

You’ll get penalized for that. Google will track that.

So it’s important that you build websites around different keyword phrases and each

keyword you bid on, point them to those relevant pages rather than just your home page.

I’ll go through all that in a moment as well.

How do you set up an AdWords account?

Setting up an AdWords account, I thought

again, let’s be interactive. Rather than me talk

to slides, let’s jump inside and set up an

AdWords campaign for somebody. It is really

basic, getting an idea of how it all works, and

then we can go deeper later on if we need to.

I’m not going to walk through setting up the account, registering an account. Just go to

Google.com/AdWords and then just follow the prompts. It’s literally put in your e-mail

address, put in your contact details, your billing details, all pretty straightforward. If you

can get here, you can set up an account.

Before I go into this, I’ve just logged into a Google account I already have open and we’ll

build a campaign for somebody. What are some niches? I want to get an easy niche that

everyone can understand. What are some business areas we can pick? Small business

service marketing. I’d rather do a product it just might be easier. Physio is more of a

business.


Basically, this is the face of your AdWords

interface and the management software. It’s

broken up into campaigns, ad groups and a

bunch of settings. So we’ll go through the process

of setting up a brand new campaign. That’s the

high-level. You have campaigns. And then inside

that, you have the groups and the adverts, and so

on. That will make sense as we go through this.

So we simply hit new campaign because that’s where we’re going to start. It’s simply a

wizard that you walk through. So first and foremost, we’re going to call this physio

campaign. As you do this more and more, you refine it.

The first thing you can do is choose its locations. Unlike SEO general search results, not

Google Local, just general search results, your listing will pretty much appear for anybody

in Australia who searches. With Google AdWords, you can target that. So if you’re a physio

in a particular area, you can say, I only want my ad to show when people in my area search.

So let’s do that. We’ll go state Victoria. We want to search one or more locations.

I want to limit this a little bit more, so we’ll go to search. What area are you in? Bayside

Melbourne. There, it’s given you an area of Bayside. So I’m just going to remove Victoria

and let’s just say Melbourne City. I’ll put in Hampton. So this is Hampton with a certain

radius around it. Let’s say within 15 kilometers of Hampton. So you can literally add this

area, you will receive very little traffic. Obviously, you’re not going to see as much traffic as

if you went for the whole of Victoria. But there is no point in your ad showing to people in

Bendigo. So it’s going to show your ad in those areas.

So yes, you’re going to get fewer search results as

it showed. But it’s going to give you a higher click-

through rate because if your ad showed for people

in Bendigo, they’re not going to click on that ad.

So that click-through rate is going to be low which

I said before, which is going to mean your quality

score is going to be low, which means you’ll pay

more for the click.

Question: Because you’ve got half the ocean there, can you move the circle across and maybe have a different centre, so it encompasses Hampton?


Pete: You can. The only issue there is no one can be searching in the ocean. So it’s not

going to get you impressions. It comes down to how many times your ad is shown. Your ad

is only going to be shown to people who search. So no one in the ocean is going to be

searching. So yes, you will be shown to people searching in Hawthorn and Burwood. Is that

too far for you?

Answer: Yes, probably.

Pete: So let’s go smaller. So let’s say we go out 10 kilometers around Hampton. Let’s just go

five kilometers and say that’s enough. Obviously, you guys get the idea of how that works.

So it’s just going to show the ad to people in that area. Obviously, you can play around

with that based on your own niche and you own business, and things like that.

So then let me move down to network devices. Let me explain it to you. Google has their

search results page, which is the first box. So you want your ads to show up on the Google

search network when people search. It’s pretty obvious.

There are also search partners which I prefer to turn off. Google license or rent, or lease

their search results to other pages. So other people who have search engines have built

search engines with the aim of showing Google’s results on that page, and they hope to

make money through other advertising and so on. I don’t want to waste my time and have

my ads showing on those pages.

The content network, I’ll take off as well. That’s something slightly different. The content

network is if I have a website about bungee jumping, just an information site talking about

my passion for bungee jumping or whatever it might be, I can run Google ads on my

website.

So Google crawls my site and sees what pages and what words my site’s about, and will

run ads on that site, and I’ll get paid if people click on it. So as the site owner, I will get paid

if people click on Google ads. That’s the content network. I tend to run a separate

campaign for the content network if I want. I’m going to take it off for this example.

Devices, again, really quickly. There are desktops and laptops, and there are iPhones. I’m

going to take off iPhones for this campaign. In your particular niche, people probably

would search for physios on Google on their iPhone. In the telco space, no one is really on

an iPhone saying they want to buy a phone system. It all comes down to your niche and so

on.


Now for bidding, there are a couple of different ways you can bid. I’m just going to go

manual bidding. You set the maximum cost-per-click bid in the next step. What this means

is that you choose the maximum amount you’re willing to spend per click per keyword. It’s

a much better way to do it. You’ve got a bit more control.

Then your budget. How much are you willing to spend a day on AdWords? My suggestion

is that you start with $100. Don’t freak out. You can monitor it the first day and see how

many clicks you get. But it’s just showing Google you’re willing to spend some money.

There are a lot of conspiracy theories out there that if you show Google you’re willing to

spend a bit more money, they’ll help you out. It’s just a conspiracy theory. I don’t buy into

it but you may as well spend $100 anyway.

You can do other funky things as well, which you can play around with later. You can do

scheduling and so on. If you want to run a campaign for a particular period of time, you

can set it with an end date. That MCG launch that I did recently had a specific end date. So

I set up my AdWords campaign for a particular date. And you don’t have to worry about

turning it off, it just turns off automatically. So if I forgot about it, I could have been

spending hundreds of dollars a day without realizing it.

There is ad rotation and so on, which we’ll talk about later on. And you can also do

demographic bidding as well where you say, I only want people who are between 25 and

30 to see my ad. Now it’s not that great from a Google perspective. People have to be

logged into Google with their Google account which obviously limits the users and that

sort of thing. So I’d leave that out.

So the first thing you do is create an ad

group. What you want to do is work out

what keywords are relevant. So you

might say, Melbourne physio, Bayside

physio, St Kilda physio in one group.

Then you might have back pain, fix

back pain in another group. So you

want to make sure that each group is really targeted. You don’t want to have one group

with every single keyword you want to target because the adverts you design are linked to

the ad group. So you want to make sure that is relevant. I’ll explain that in a second.


Let’s call it, the first one is location-based. The headline, we’ll call it Hampton

Physiotherapy Clinic. You only have a certain amount of letters so you can’t go any further.

What’s your value proposition? What’s unique about your business? Why would people

come to you over other people? Health care, fast results and personal health. Let’s just say

for example here, open seven days.

What you can do even if you just display your URL on your basic website, but your

destination URL can be a specific page deep into your site. So if you’ve got an ad group

about back pain, particularly about back pain and you have a page on your website about

back pain, you can make the destination URL/backpain.html, whatever that page is. So

when people click on the ad, they land specifically on the relevant landing page. So not

only does it help Google give you a better quality score, it helps the user. I want back pain,

I land on back pain. So it’s going to get you better bounce rates and better conversions.

Now keywords, this is where you throw in the actual keywords you want to target for this

particular group. Hopefully, as Dave mentioned before, you’ve done all this keyword

research which we’ll talk about a bit more. I won’t go too much into that now. You can

basically work out which keywords you want to target for this group. Let’s just for an

example call it Physiotherapy Hampton, Physiotherapy St Kilda, on and on for this

particular group because we are going to target the actual area.

There are a couple of different ways you can put your keywords in the group. There are

three ways. There is just what’s called broad, which is Physiotherapy Hampton. What this

means is that you’re telling Google, I’m willing to bid on any terms that you think are

relevant to physiotherapy Hampton, not that phrase exactly.

Google will say they think physiotherapy and chiropractic are the same. So someone in

Google says chiropractic services in Hampton, your ad might show up, even though you’re

not that specific. So I always say avoid broad. All broad means is putting the term in just

like this.

What you want to do is put talking marks around it. It’s what is referred to as phrase match.

What you’re saying to Google here is, I want my ad to show up anytime physiotherapy

Hampton is in the search phrase in that order. So if somebody searches the best

physiotherapy Hampton, my ad will show up, because you’ve got physiotherapy Hampton

in that order, physiotherapy Hampton and then a street name, maybe, it’ll show up.


If I put square brackets around it though [physiotherapy Hampton], what it’s basically

saying to Google is, I only want to bid when people search that exact phrase in that exact

way, physiotherapy in those unique words, no other variants around it. So if someone

searched the best physiotherapy Hampton, and I only bid on that word, my ad would not

show because it didn’t have best in it. So you always want to remove any use of the phrase

match otherwise you are going to get so many impressions that are irrelevant.

Question: How would you write it in if you wanted physio and physiotherapy? Is there a way that you can write physio in with a star or a wild card?

Pete: No, I would do this. I would go physio Hampton as a separate phrase. You want to be

as targeted as you can. Does this make sense so far? So I won’t dump in all the keywords I’d

do in this particular group. Technically if I had the time, I’d probably create different groups

for Hampton versus St Kilda. So you target the ad a bit more specifically as well. But just for

this example, we’ll just do this.

We can click estimated search traffic which is not a great level result. It’s saying here there

are not enough searches in that particular five kilometer radius for those terms to give you

some rough data. But again, it doesn’t really matter because if you only get five searches a

day and you rank number one in AdWords and you get four clicks, you’ve got a success. It’s

not about the most.

Question: Do you have to put them in talking marks or in brackets?

Pete: Yes, because if you leave it without the brackets, if I just put in the physio Hampton,

that’s what Google class as broad match. So they class them as three completely different

keywords. So broad match will show up for chiro Hampton, because broad is basically

saying, I’m being lazy. Google, you do the work for me. Google is doing this to make

money so they’re going to show anything they think is relevant.

If you put the speaking marks around it, it says this is the phrase. So it will show up for

anything with the long tail either side of that, and then the square brackets is the exact. So

you’ve got to put them in separately. If you just leave it broad, you’re going to get so many

impressions of irrelevant traffic. So don’t do that at all.

The only time I ever do that, just to give you a bit of a disclaimer, if I’m starting a campaign

for the very first time. I might, for two or three days, put in broad match just to see what

Google thinks my site’s about, what is relevant, see what other keywords are possible. With

the Analytics data, which you’ll see in the video I’ll send you guys later, you can track what

keywords are being searched.


So you can say, I’m going to bid on broad here. But then coming through Analytics data, it

might show you that you’re getting traffic for chiro Hampton. You can decide, do I want

that traffic or not. You can then turn it off or start bidding on it because it’s going to be

cheaper as well. Does that make sense?

Question: Let’s say you’ve got a website that is ranking in organic search rankings in the top three. What do you think is more important, to go for the top spot in AdWords or to claim some of the real estate on the right-hand side of the page by being ranked a little

bit lower?

Pete: I’m going to give you the weird answer. Again, it comes down to your niche.

Personally, I want to be number one all the time. I’ve got a big ego. It does work. It comes

down to testing. If you’ve got different phone numbers, what you can do is, you can test

how many calls did my AdWords get when I’m in position one compared to position three?

It will all come down to the bidding scenario, so it comes down to your particular space.

I know people who have e-commerce sites that aren’t designed to get the phone to ring.

So they sell e-books online or just video games and things like that. They get a better

return on investment being in position number four. They don’t get as much traffic, but

they get, for whatever reason, their bids are lower, the traffic is less but that traffic converts

better. It all comes down to testing again.

So the next thing we do is just work out what our maximum cost-per-click is. This is the

maximum price we’re willing to pay per click. Let’s just say I’m willing to pay 50c. We’re

going to have to spend 50c every time someone clicks on your ad. Is that a better spend

than paying $2,000 in a local Melbourne newspaper to hopefully get some impressions?

You’re paying 50c per click for someone who is interested. It’s the best ROI you’ll ever have.

So let’s save this as a group. So here you’ll see now, on the left-hand side you’ve got physio

campaign. You’ve got location-based and that’s the ad you’ll see here, and these are the

keywords we’ve got here. I’m going to let this run throughout the day. And if we’ve got

time at the end of the day, we’ll see if it gets any impressions and I’ll buy you some traffic.

What we also want to do, a couple of things from a testing and split-testing perspective

that I spoke about in the last session, like everything, you want to split test. If you click on

the ads tape here, it takes you back to the actual ads which are running in that particular

group. I always recommend, you want to run a couple of different ads at any given time to

work out which one is best. How do I know that ad is going to be the best converting ad?

Like the split test data, 4% to10% conversion rate, what would you rather? You’d want

more traffic.


So if we simply click here on new ad, and we can go text ad; I won’t bore you with all the

other possibilities. You’ll see a pending warning. Because what Google does is it goes and

vets it to make sure the ad doesn’t have any bad language in it and it is relevant, just a

baseline.

Let’s pick a different headline. Let’s say Physio Clinic Hampton. Open seven days. Even

sometimes the order makes a big difference. What street are you in? Hampton Street. Full

service plus rebates. I don’t know if you’ve got that Medicare thing.

Obviously, you know this better than I do once you know your business, but just play

around with this. Even to the point where you test things where the display URL doesn’t

have a www can make a difference, a significant difference. Just the conversion and the

click through, it’s very strange. But all these things can make differences, so you want to

keep testing.

So you’ll put in two ads and what will happen is, as the impressions come up, Google show

the ads evenly. So the first person, whatever the keyword might be, physio Hampton,

they’ll show the first ad. To the second person, they’ll show the second ad. And over time,

you’ll see which ad gets a better click-through rate. That’s the winning ad. So you can

delete the losing one and try again with another one, keep them making them race against

each other. There are some funky ways you can do it moving forward.

Let’s quickly add in another group of the ad groups. I’ll add in a second group here, just

using this campaign as an example. Let’s call it back pain. This is a quick example of how

you target different things. So that’s back pain, headline is: Got back pain? It’s all about

testing different headlines and things like that. Need a Quick Solution to Your Back Pain?

Visit us in Hampton.

Then if you had a page that was /backpain.html, you’d put in a destination URL so when

that actual back pain ad comes up, it goes straight to the relevant page. That page would

be saying, Hey, Have you Got Back Pain? We Can Fix It. Call this Number. You’d have a big

phone number, little video testimonial saying, I had back pain. I couldn’t stand up, got in

my car and drove home.

So the keywords here you would be going back pain, so you would put it in both options,

lower back pain. I know there are some typos here but deliberately, because people might

search lower back pain like that, lowr back pain, so you want each keyword is different.

Google treats every keyword as a different bucket.


Question: Why do you do square bracket and talking marks? Don’t they overlap?

Pete: The square brackets are the lowest model in terms of I want to bid just on this word.

If you bid on lower back pain with a square bracket, you’ll only show up if someone

searched lower back pain. So you’re right though, with the phrase match which is the

talking marks, it will show up for lower back pain which is the exact match, but also

anything either side of those words.

The reason you want to do it separately is technically, yes, one would pick up traffic from

the other one. Because you want to bid on them separately, you want to put them in

differently. Google will charge you differently for both ads. So if you’re more targeted, it

will be cheaper. So an exact match should be a cheaper click than the other because it’s

more relevant.

Question: So if you typed both of them in, you’ll end up being able to buy some of your clicks cheaper.

Pete: The exact match, which is the square bracket, will be a cheaper click because it is

more relevant to the person. You’re saying, I only want to target this particular phrase.

You’re being more targeted, so Google is going to reward you through their relevance

aspect of the quality score.

With a phrase match you’re being a little lazy and saying, I just want this and anything else

you can give me. If you have broad match which is no brackets, you’re being super lazy.

Google is going to say, well, you’re making us work. We’re going to charge you more.

You’re making us work more.

Question: Just a quick one. My main competitor who has Google AdWords, she seems to appear everywhere I go. I go into different directories and there is her ad. And I go into

some related page and certification body, and there she is again. How does she get her site in all those places?

Pete: It would probably be the content network that I ticked off before. Basically what can

happen is, these other websites about the industry, the way they make money, they’re

going to run ads on their site. They say, Google, I want to use your services to run the ads.

So basically as an advertiser, if you tick content network, your ads will show up when these

keywords are on the pages that people have the AdWords ads on. So if someone has a

website about lower back pain, and their copy and their website talks about lower back

pain, and they have Google ads running on their site as a way to make money, and this is

ticked with content network, this ad will show up on that page because that page talks

about lower back pain. Does that make sense?


Question: So that’s a pretty good strategy.

Pete: It doesn’t seem to convert as well. Again, it comes down to a testing thing. I keep

saying testing, but that’s what it comes down to. It’s not going to convert as well because

again you’re interrupting people. If people are searching, they’re actively looking. Ads on

the side of another web page, they’re not looking for the ads, they’re looking for the

content. You’re trying to interrupt them so it’s not going to be as high conversion rate, as

high click-through rate. Even the actual traffic you get when they click through doesn’t

seem to convert as well either.

Say for back pain, I’m going to pay $1.20 a click because back pain is going to have more

competitors than Hampton physio, so you’ll find you’ll probably have to pay a bit more for

the click.

Question: I just had a question with the location. When you set the radius before, how accurate is that? If their ISP is in the middle of Melbourne, will it pick up that?

Pete: That is a catch, it’s based on their IP address. It’s getting better. Google and the

internet is getting better. The IP addresses are becoming a little bit more not static but

they are coming on the fly. So you can work out where you are.

I can type, where is my IP, and see where it thinks

where we are. It thinks we’re in Preston. So it

knows where we are and I doubt that their server

is in Preston. So it’s getting pretty smart at

working out where you are. But you will find that

there will be people in the area, 5% to 10% of

people who are in that area searching, won’t show it accurately. It’ll think they’re

somewhere else. But it’s one of those things you are willing to lose that 15% of traffic and

impressions for the benefit you’re going to get not having to show your ad somewhere

else. I would say, yes, I’d happily take that.

Question: Pete, a couple of questions and an idea. For a retail bricks and mortar place or even non-bricks and mortar, putting the phone number in the ad is often a good idea

because they won’t click on the ad but you’ll still get the enquiry.

Pete: Yes, absolutely. We’ve tested in our business, it didn’t work for us. But again it comes

down to testing. A lot of people do it and this is where you have a separate phone number.

So you put a separate phone number as opposed to any other number in the advert to see

if it gets called.


That’s what we did and we found it didn’t get enough calls. It reduced the click-through

rate but it didn’t increase the calls enough. The end result was fewer conversions. Yes, you

might get more calls from it. But at the end of the day, if it lowers your click-through rate,

which means fewer people see your site, which means fewer people call you. At the end of

the day, it’s not a good thing.

Question: It’s fickle, isn’t it? Two Questions. What is the best? Because you’re manually keying in keywords. There obviously is a keyword generator. Is Google the best

or is there a better one that you would recommend?

Pete: There is a great tool from some Melbourne guys called Market Samurai. Basically, it is

a software package that does some amazing online research things. Basically it scrapes the

Google tool. It gets a starter from a Google tool but as well it has some locations. It does

some crazy algorithm math in the background. I won’t get into that but just Google or go

to marketsamurai.com. It’s a really good piece of software with a 30-day trial and that sort

of thing.

But what you can do, to give you an idea, if I

go to keywords, I’m just going to add some

keywords into this group as an example and

give you a way to do it. On the right-hand

side, because I’ve got some keywords in this

group, now I’m going back to add more

keywords to give you some ideas. On the right-hand side, Google is saying, here are some

other keywords that might be relevant and worth bidding on. So I can add in lower back

pain, lower back pain causes, and it throws them all in for you.

You can also go to the keyword tool, which is a sneaky little way and – do you know, a

competitor’s website? Brightonphysio.com.au. If you go in here, Sports and Spinal, you put

in the website enter, it’s going to go off and crawl their website and see what their

website’s about, try and work out what keywords their competitors are about. You can put

your own website in here obviously and it will pull up what keywords your website’s about.

But you hopefully know what you’re targeting. This will tell you what your competitors are

targeting. So that’s a way to grab some other keywords.

Question: My last question is, where I often fall down with AdWords is choosing the budget per keyword. You put in 50c on one, $1.20 on the other. Clearly, you might end up with a list of a hundred keywords each of which doesn’t need a dollar or a 50c. How do you

determine the optimal budget?


Pete: A couple of things. It is a management thing, so it’s continually looking at the

account and just regularly looking at it and seeing, ok where am I positioned. I’m position

number one and I’m paying 50c. I always regularly go into our accounts and reduce out

bids. Over time, you should be able to get cheaper and cheaper clicks. The higher your

quality score gets, the more click-through rate you get, the more traffic you get through

AdWords. You should be able to keep lowering your bid and not change your position.

Over time just keep going 5% here, 5% there, just lower your bids by 5%. Google has a tool

called the AdWords tool. Funnily enough, it’s a software package you can download and it

gives you a lot more management ability.

You can run reports like, I want to reduce every ad that’s positioned over the last 30 days in

position one. I want to reduce the cost per click by 5%. Click, it does it automatically. Free

software is the Google AdWords tool and you can do that magical automatic thing to

reduce your bids easily. You don’t have to go into every hundred individually. This comes

down to testing again. Like I said before, being number one might not be the best way to

get the best ROI for you.

So you’ve got to work out at number one I get this much traffic which converts at this,

which costs me this per lead. If I’m at position three for a couple of weeks, what is my cost

per lead? At the end of the day, it comes down to what you’re willing to pay per cost per

lead. It’s not cost per click. At the end of the day, you’ve got to do the math. It’s traffic, cost

per this, how many enquiries do I get, that’s my true cost per lead. Sometimes you might

find that doing a magazine advertisement might give you a better cost per lead. I doubt it,

but you’ve got to do the math. It comes down to that.

That’s basically how you go about setting up an AdWords campaign and going through it.

It’s a very introductory process and how to get that going. I just want to go back to some

management things as well. Are there any more questions about this from an actual setup

perspective?

Question: Just getting back to my ubiquitous competitor. She’s the only person in my industry I know who has Google AdWords. So the scenario I can imagine is that I get this Google AdWords campaign and then there’s the two of us up there, competing away madly. And she notices this and ups her amount per click. And then I up mine and she ups hers. And we’re just in this circle. Is there any way to manage that so that

you’re not out of pocket?


Pete: Decide not to bid for number one. Decide to be happy with number two. Try it.

Potentially, and this is another soapbox moment for me, she might be paying a third-party

company to do it. You have no idea. They may be bidding on broad phrase match things

and don’t really manage it properly. All these third-party companies who do it, they’ve got

a 21-year-old kid who doesn’t know anything about AdWords or running the AdWords

campaign.

We hired a kid a while ago who’s been with us for 12 months now who basically runs the

AdWords work and he came from a company where he did AdWords. He got told on the

job, we sold an AdWords client. He said, what’s that, and he was told I don’t know. Figure it

out. He had to basically create an AdWords campaign for a client just by working it out and

they’re charging a 20% management fee. Twenty percent of their AdWords spent every

month is management and he had no idea. It’s a disgrace.

Question: So how many slots are there in that top?

Pete: There are normally two or three at the top of the search results page.

Question: So if you’re second, you’re still up there.

Pete: Yes, so physio Hampton. There are three here. It’s showing one at the top and two at

the side. The issue here is, it comes down to how many people are bidding. The more

people who bid on the actual phrase, the more actual sponsored links are put above the

actual organic because it means more money for them. If there are only one or two people

bidding, what they’ll do, they’ll only show it on the right-hand side.

There’s nothing much you can do. You can’t do anything to control that unless you can

bribe the CEO of Google, and I don’t know anyone who has done that yet. There’s normally

about five or six down the side and a couple at the top. There are about 10 spots generally,

give or take. And it does change randomly, and Google just like to be mysterious and not

tell everybody. I’d be happy to be number two. Bid for number one, see if she counteracts

and work it out.

But it all comes down to what you’re willing to pay per lead. If you’re willing to pay $100

per lead, and you’re getting a 20% conversion rate on your site, so 20% of people who

come through, one in five, you pay $20 a click. Twenty dollars per click gives you five

people. One of those converts. It costs you $100 a lead.


In the US, in the mortgage market, terms like US mortgage and mortgage, $100 a click. It’s

just stupid money but obviously it’s profitable somehow because they’re making $10,000,

$20,000 commissions, whatever it works out to be. There are some spaces where you can

get clicks for 15c, 20c. Some it’s $5, $10, sometimes more.

Question: Is there anything in place to stop a competitor going and clicking on your AdWords a hundred times to cost you $100 for the day?

Pete: Yes, Google has an algorithm based on the IP address. So they will know if it’s the

same person clicking over and over, you won’t get bid. Google is smart enough to realize

that and it’s just based on the IP address. If they pay a bunch of Filipino people to do that

on different IP addresses across the world, you can’t do it. That’s why you want to get

targeted in certain areas. Say there’s a physio based in Brunswick, they wouldn’t see your

ad. That’s where targeting is good.

If you’re going Australia-wide, if your niche is Australia-wide, you’re going to have a lot

more competitors seeing your ad. And it just domes down to Google doing the right thing

by you. They don’t want to mess up their advertisers because that’s how Google make their

money. They’re like a multibillion-dollar company and 95% of their revenue comes from

AdWords. That’s how they became a big company, is AdWords. That’s it. Their best

interests are to make sure they don’t mess up the advertisers. They’re smart enough for

that sort of thing.

How do you manage AdWords?

Let’s talk about AdWords management and

managing this on a long-term basis. There are

three things you want to manage for. These are

the elements that make up the quality score.

The first thing is the landing page quality. One

little sneaky trick is that if you’re bidding for the

term Hampton physio and you’re already ranking number one in SEO for Hampton physio,

you can’t get a better landing page quality. Google already says in their other algorithm,

which is very similar to the AdWords algorithm, that this page is the best site they can find

on the web for the term Hampton physio. Otherwise, they wouldn’t show it number one.

That’s why it is number one, because it is the best page on the web.


So if you’re sending AdWords traffic to that, Google has to give you a 10/10 because it is

the best page they have on the web naturally, so of course it is going to be the best page

they’re going to show for pay per click. You always want to try and refine that so your

AdWords match the landing page.

You don’t want to bid for back pain, physio, chiro, hurt knee, hurt ankle and send them all

to the one page, because again, it is that one page, one purpose method from an SEO

perspective, from a conversion perspective, and from an AdWords perspective.

You want to target each phrase or each ad group to a particular landing page so that it

matches from a user perspective. If Google see that you’re bidding on a keyword, the

keyword’s in the ad somewhere and the keyword’s on the page, it will reward you for that.

That’s basically what the relevance thing comes into.

So split testing your adverts, having one or two adverts running at any give time is

important because it will help your click-through rate. One thing that we do which is a little

bit of a trick from a split testing perspective, not only for AdWords but also for split testing

even with direct mail and so on, we do an AAB split test.

So if we’ve got an ad group running, we’ll run

three different ads in that group. What we’ll do is

A1 which is the first advert. We’ll literally replicate

that exactly. So if we have a winning ad that’s

winning right now and it’s getting a click-through

rate of 10% or whatever it might be, we’ll run that

ad twice, identical in the same group.

Then we’ll run a B2 which is the competitive one. So what will happen over time, A1 is

going to get 33% of impressions, the identical one will get 33% and the last, B2 will get

33%. So all you’re doing is risking 33% of your impressions on a testing ad. You know this is

working, you know what sort of percentage it is getting. If you run two of these ads you’re

running, 66% of the impressions are getting the ad that you know works. You’re only

risking 33% of those impressions on an ad that my bomb and may be dead.

If you just go an AB, it’s 50/50, so half your impressions could be an ad that kills. Does that

make sense? If you want to get precise, you can go A1, A2, A3, B1. So you’ve got 75% of

your impressions are coming from the ad that you know that works and 25% is just to the

ad that you’re testing. So it’s just a way to reduce the risk of split testing and getting the

relevance right. You want to keep an ad that’s working up there.


You want to keep working on click-through rates. So by doing different ads, it’s going to

increase your click-through rate. And you want to keep you’re click-through rate high,

because the higher the click-through rate, the lower the cost per click. So out of the three

things that make up that quality score, the click-through rate is basically the most

important. The higher the click-through rate, you’re showing Google and the users that it is

more relevant.

What would Google do?

The theory behind this and the mentality you

should have in your mind as you’re going

through AdWords is the theory of what would

Google do. Basically, the three things when

you’re trying to split test ads, put keywords in

there, whether I’m going to go for a phrase

match versus an exact match, or a broad match keyword phrase, or how targeted my

group’s going to be, you go through this three-step process. What’s Google’s objective?

Their objective, as Dave said earlier, is to serve the most relevant ads possible to ensure the

user has the best experience.

They want, when someone searches Hampton physio, that all the results that person sees

relates to that person and is going to help them. They don’t want to show a physio in Mt

Eliza or Brunswick. They want to show one in Hampton, so they want to make sure it is

relevant.

So how does this situation relate to that? If I’m going to put in some keywords for migraines,

because migraines can be caused by back pain which you could possibly fix. So if you were

going to bid on migraines and you were bidding on the term migraine and you’re showing

a physio ad, Google is going to say, well, is that really going to help the user get the best

experience? If they want results for migraine possibly, but migraine in general is not that

relevant to physio.

You want to think from Google’s perspective. Are they thinking that migraine is a term that is

relevant to physio? They’ll probably say no. It’s not someone sitting there saying, yes, it’s

relevant, no it’s not. It’s a computer and algorithms, so it’s obviously not so much human

interaction.


Would Google penalize this or would they applaud and reward it? So if you’re bidding on

the term migraine, are they going to penalize you for bidding on migraine or are they

going to say, congratulations, you’re doing the right thing and reward you? Most likely

they’ll penalize you and charge you more because the quality score is not going to be

there because of the relevance and that sort of thing. They’ll up your bids.

Your maximum cost-per-click may be 50c like we put in before. You’ll probably pay only

30c a click. That’s your maximum bid. It doesn’t mean you’ll pay that. You’ll only pay 1c

more than the person who is number two.

If number two is only bidding 30c and you’re bidding 50c, they won’t charge you 50c.

They’ll only charge you 31c. It’s all that algorithm in there. People say, what if I do this, how

is this going to work? If you go through those three questions in your mind, that will pretty

much answer what will Google do. If you were Google trying to give the user the best

experience, would they reward you and reduce your click-through rate by having the right

keyword in the advert and on the landing page? Of course they are giving the user a better

experience. They’ll reward you and drop the cost per click. If you’re doing something a bit

shady, they’ll slap you.

If you, for example, bid on hotel reservations as an example and sent traffic to Hampton

physio, they’ll cancel that keyword and say it’s not relevant. They’ll let you bid on it for a

couple of days and charge you through the nose for it, and then say, sorry, you’re not

being relevant at all, and just disable the keyword and not allow you to bid on it, or charge

you through the nose and make you pay $5 a click because they don’t think it’s relevant.

That’s pretty much the AdWords overview. I hope that’s given you a bit of an idea about

how to get traffic to your site really quickly and you don’t have to worry about and wait for

SEO. It hopefully helps you test things. If you’re testing different landing pages and things

like that, it’s a great way to fast track it. You can get traffic today for particular keywords.

You might find that targeting back pain for physio, you might spend all this time and effort

and resources and money doing SEO for back pain physio, but it doesn’t convert for

whatever reason. If you put a page up there and send AdWords traffic to it, you can see

that page convert and make you money and get you leads before you worry about doing

SEO. I always say, before everything we do, we do AdWords first to see if it converts. Traffic

is irrelevant if it doesn’t convert. I want to get conversions first so I pay to make sure the

conversion works.


Then, yes, this is profitable, profitable AdWords. I’ll keep spending it but then I’ll go and

invest the time and resources and effort in doing the SEO because I know once I rank

naturally number one, I’m going to get more traffic. Number one in SEO gets far more

traffic than number one in AdWords. People are wising up to know the difference. Natural

listings will get more traffic so don’t waste your time SEO-ing something that is not going

to convert. You can test it through AdWords, so it’s a big reason why I say, use AdWords in

your business just to test things first and foremost. If it is profitable long term, keep it

going to help the business.

Thank you guys.

Business

Understanding Online Paid Advertising