LogoGardenPhotoPaid search marketing is an effective way for small companies to generate sales leads and e-commerce revenue. Whereas organic search marketing (SEO, for the most part) takes months or years to bear fruit, paid search marketing gives companies instant search engine visibility; an immediate opportunity to increase revenue.

While there are many types of paid search marketing, this article will focus on PPC (pay-per-click) advertising, and specifically Google AdWords, the most important, and most popular, and usually most effective type of paid search. Nevertheless, many of the ideas presented here apply to other forms of paid search such as Bing Ads and retargeting.

The Anatomy of a Google AdWords Campaign

Google AdWords campaigns have four levels:

  1. Account Level — The highest level, which is basically your account setup, used to manage billing and communication with Google.
  1. Campaign Level — The totality of keywords targeted in the campaign. These are selected based on the number of products and services to be promoted, keyword research that determines volume and conversion potential, and budget. (Keywords are the phrases people use when performing search queries.)
  1. Ad Group Level — A segment of Campaign Level keywords that apply to a given product, service, or group of products or services. Ads are connected to Ad Groups, and it is usually most effective to tie landing pages to Ad Groups as well.
  1. Keyword Level — The individual keywords that are targeted in the campaign.

It’s important to organize and think about keywords in this way. When you track clicks and conversions from your campaign, you need to know which keywords and ad groups produced them; otherwise, you will not be able to effectively adjust and optimize your campaign as time goes on.

 Campaign Setup

  1. Keyword Research — Identify the most promising keywords to target based on your budget. Google AdWords is a bidding platform. You will be bidding on keywords; if your bid is accepted, your ad will display when a user conducts a search for that keyword. The more popular the keyword, the higher the cost.
  1. Ad Creation — Ads must be relevant and persuasive; in addition, they follow a strict format. This recent article provides in-depth guidance for writing Google AdWords ads.
  1. Landing Page Creation — When users click on your ad, they should be taken to a landing page specifically designed for conversion; i.e., a page where they can phone you, submit an inquiry form and/or place an order. Learn more about why PPC advertising without a landing page is a waste of money.
  1. General and Advanced Settings control a number of variables, including the geographic area where your ads will display, what type of devices your ads will display on, your daily budget, and specific times of day or week when your ads will display.

Campaign Monitoring and Continuous Improvement

As you track the results of your campaign through Google’s AdWords platform, you will see certain keywords outperforming others. A great feature of AdWords is you can make adjustments to your campaign quickly, enabling you, for instance, to bid more frequently on high-performing keywords and eliminate non-performers. In addition, you can optimize in other settings, such as displaying ads only on days that produce the most clickthroughs.

Speaking of clickthroughs, the three most important metrics for evaluating your campaign are:

  1. CTR (clickthrough rate) — If an ad displays 1,000 times and 20 users click on it, the CTR is .02. You want to continually increase CTR.
  1. CPC (cost per click) — If you spent $2,000 to generate 20 clicks, your CPC is $100. You want to continually reduce CPC.
  1. CPL (cost per lead) — If you spent $2,000 to generate five leads/sales, your CPL is $400. You want to continually decrease CPL. (Note: You must validate leads in order to calculate CPL accurately.)

The most common technique for optimizing campaigns is split testing. For instance, you might test one ad offer versus another; the ad producing the most clickthroughs or conversions becomes the new standard. Other common campaign elements to test include landing page copy, and days or times when ads display.

Besides optimizing campaign settings and split testing, improving your Google Quality Score is another crucial factor in improving campaign metrics. The more relevant your ads and landing pages are to the targeted keywords, the better.

As a final note, give your campaign time to succeed; six months to a year is a good test period. What matters is not how you start, but how your key metrics improve over time. Most campaigns pick up steam as they go, since predicting customer behavior is not an easy task — as any small businessperson well knows!

Brad Shorr is the B2B Marketing Director of Straight North, an Internet marketing firm offering PPC Management Services to middle market companies throughout the U.S. You can read Brad’s work on PPC Hero to learn more about paid search.