Whether you’re new to the DA game, or looking to revise your strategy, it’s helpful to understand how Google’s Adwords platform spends your money before you dole out a lump sum of advertising budget. We know it’s hard to account for such marketing costs, so we’ll use the classic ice-breaker game Two Truths & A Lie to brief you. Ready, set, guess!
And that’s something you can totally control (with no minimum amount!) First, decide whether you’re aiming for clicks, impressions, or conversions. This is what will determine your advertising bid strategy by campaign.
For Clicks – CPC bidding
Cost per click (CPC) bidding allows you to pay only when your ad gets its desired outcome, a click. Your maximum CPC bid is the most you’ll ever be charged for a click, but the cool part is that you may end up paying far less. Dolla dolla bills, y’all!
Your actual CPC is the cost that was minimally required in that instance to hold your ad position in the search auction among competitors. So, assuming the expected impact of your ad (ie. extensions & other formats) is killer, and your quality score is top-notch, you only have to pay just enough to beat the next guy in order to rank a position higher.
For Impressions – vCPM bidding
If you’re aiming to increase brand awareness, you can pay per thousand viewable impressions (vCPM). This is an efficient way to control the visibility of your ads, given that the intention is for users to see it, not necessarily to click or respond directly.
For Conversions – CPA bidding
The Target Cost-Per-Acquisition (CPA) bidding model let’s you target an amount you’d like to pay for a conversion. Adwords uses historical information about your campaign to automatically find an optimal CPC bid for your ad each time it’s eligible to appear, and charges you based on your set target CPA. If it’s set too low, you may forgo clicks that could have resulted in conversions.
Regardless of whichever metric triggers spend amount, you’ll set a daily spend (which may fluctuate day to day, but Adwords promises it will never spend more than your daily allowance times 30.4, the average amount of days per month).
Don’t let your ads go dormant. Consider the seasonality of your business. Are potential guests searching for a vacation during a certain month? When is the hot time of year for your school’s enrollment? Adjust ad spend accordingly!
Of course, you can use ad scheduling, enhanced or automatic bid adjustments, maximum bid limits, and bid rotation options to maximize your objective. (Are hungry customers looking for dining at a specific time?) But never underestimate the power of seasonal tweaks and ongoing optimizations.
Not happy with your ad performance? Well, there’s more to the ad auction than bid amount. Before you attempt to purchase a higher ad position, remember money can’t buy you [Adwords’] love. In addition to bid amount, the ad auction weighs the components of quality score (expected clickthrough rate, ad relevance, and landing page experience). So, before you make any drastic decisions that might cost you, make sure your keywords match the intended search query, your landing page is keyword optimized and easy to navigate, ad extensions are enabled, and settings (including targeting, rotation, and bid strategy) are on point.
Particularly in a competitive market, it’s important to know how much you’re spending and for what kind of performance. Monitor metrics like average cost per objective (CPC, vCPM, or CPA) and return on ad spend (ROAS) to make sure you’re getting the right bang for your buck!