Google AdWords has recently rebranded to Google Ads. Google Ads is a platform that allows you to pay money in exchange for the ability to appear at the very top of Google search results. You are only charged when a user clicks on your ads, unlike Facebook ads where you pay for eyes that may not have even been looking at your ad. Google auctions off keywords to the highest bidder.
Types of Google Ads
There are currently five types of Google Ads.
- Search
- Display
- Shopping
- Youtube
- Universal App
Search Ads are by far the most common. These are the ones you see at the top of the search results. They also display at the bottom of the search results, if you happen to make it there. We will be primarily focusing on Search Ads in our post today.
Display ads are the ones you see while scrolling around the internet and reading the latest Buzzfeed article. These are actually the least likely to convert.
Shopping ads show up at the top of the search results when a high commercial intent keyword is used like “Buy” or “price”.
Youtube ads are pretty common now, and you likely sit with your finger hovering over that “5 seconds left” button without really paying attention to the ad that is playing.
Universal App ads are the newest type of ad, and they only appear on mobile and link directly to an app download from the play store.
Google Ads fun facts
Paid Ads get 65% of all clicks on searches that have high commercial intent.
Businesses make an average of $2.00 for every $1.00 spent on Google Ads.
PPC (Pay per click) visitors are 50% more likely to purchase something than organic visitors.
In 2018, consumers were 27% more likely to buy something in store if they clicked on the Google ad before coming in.
There are 160+ billion searches on Google each month.
How does it work?
Your ad is only shown to people actively looking for your product / service. This is as hot as a lead can get. You only pay when a potential customer clicks on your ad. This allows deep insight into what customers are searching for and helps to quickly find what is working and what is not. Google auctions off keywords to the highest bidder like in the graphic below.*
Making Google Ads Campaigns Profitable
A lot goes into making Google Ads profitable, knowing your customer lifetime value (CLV) is an important part. You can calculate your CLV by multiplying the profit per customer per time-period. Put simply, CLV is how much profit the average costumer brings to you over a given amount of time.
Example: You do landscaping and you have clients you profit $30 a week to mow their residential lawn. You also mow public parks for $1,000 profit but it is a one-time fee. To “roughly” calculate the CLV for a year of a residential client it would be ($30 * 52) = $1,560 and the CLV for 5 years would be $7,800 for every residential client.
The point is if you know you are going to profit $7,800 off of +an average residential client even if it is spread out over five years, you should be willing to pay much more to market to the residential client than you would to market to a public park client.
If you have a higher CLV than your competitors, then you can confidently out bid them for greater market share.
Upselling can drastically increase CLV. By adding to your overall profit per customer, having upsells (preferably recurring revenue) can increase that CLV.
Having a professional website is also a wonderful way to increase profitability from your Google Ads. Your website is the first impression of your business. You can read more about it in our post about if you really need a website.
Making your ads lead to landing pages that fit are specific to the ad. This ensures that your user is reaching the information that they’re looking for.
Do not listen to Google recommendations when setting up your account. They care about making money for themselves, and not if your ads are making money for you. This is different from listening to their optimization tips.
Hopefully this post helps you with managing your Google Ads. If you would like a free Google Ads audit, or to discuss having a professional manage your google ads for you. Please reach out to us by phone at 321-522-8962 or email us at team@blueshiftwebservices.com.
