PPC: It's Not Just About the Bid

Smarter ads really do save you money. Google rewards ads that get more clicks, and Google also makes a better profit from those high-performing ads, even when they arent sold at really high prices.

Here's why that is.

Example #1  How Companies (Accidentally) Blow Their Budget

Here are 4 easy steps on what not to do. We've seen countless companies come to us, burned after paying huge sums and tearing through online marketing budgets, all because their ad campaigns just were not being managed right. This is how it happens:

1. You bid $2.00 for every click on your ad, which is for a highly competitive keyword. Paying up front, you figure the extra cost of paying for more impressions (more people seeing your ad) is worth it.

2. You don't spend much on creative work, because your budget has mostly been spent on the high cost of the bid itself.

3. Because your ad is only mediocre  let's say you wrote it up before breakfast, without the help of an agency  it only gets a click-through rate (the amount of people who click on it, out of all the times it gets shown) of 1%.

4. Google takes $20 from you, for every 1000 times they show your ad (impressions). That means your ad has a $20CPM or cost-per-mille. For every 1000 times Google shows your ad, they know they're only going to make $20 from you, because only 1% of the people seeing it will click on it.

   So even though you're paying $2 per click, the impressions you'll require to reach that number of clicks are pretty high.

Example #2  Heres How Companies Bid Smart, Save Money, and Convert Way More

Now, heres how you do it right.

1. You start with smart research, and find a keyword where you're only bidding half that amount  $1 per click.

2. Thanks to some good creative work, your ad has a much higher click-through rate of 5%. That means Google earns $50 for every 1000 impressions, because a much higher number of people who see your ad are actually clicking on it.

3. You're paying just 50% in per-click costs compared to the other guy, but your ad is performing way better  and earning Google more money as a result. And they don't have to serve as many of your ads, either.

4. This is what Google wants  and if you can give it to them, they'll reward you for it.

The Elements of a Quality Bid

There are a few things you need to do if you want to be part of that second example above, saving money and seeing better results while doing it. You need three things:

• Relevant Terms: You need keywords that are going to actually perform. Relevant terms that people click on because they want to buy something terms that lead to actual conversions. Not big, generic keywords, or category ones either, already flooded with competition. How do you find out what these are? It's simple: research. And lots of it.
• Perfectly Adapted Ads: Generic ads that try and capture visitors who might be searching in your niche don't work. You need ads written specifically for the keyword you're targeting, ads written with proven marketing principles that work  and work consistently.
• Smart, Creative Marketing: Your budget should not be going towards big ad spends that don't do anything for your business. Instead, you want the highest-performing ads humanly possible, ones with quality scores that are through the roof. This is why having a team who knows how to create these kinds of ads is crucial.