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Understanding Online Paid Advertising


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This transcript is from the third session of Small Business Internet Marketing Workshop. It focuses in understanding online paid advertising, particularly Google AdWords. Some of the topics included in the session are an overview of AdWords, how it works, and when does it fit for your business.

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Understanding Online Paid Advertising

  1. 1. 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.
  2. 2. 2 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.
  3. 3. 3 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 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.
  4. 4. 4 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?
  5. 5. 5 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.
  6. 6. 6 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.
  7. 7. 7 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.
  8. 8. 8 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.
  9. 9. 9 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.
  10. 10. 10 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.
  11. 11. 11 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?
  12. 12. 12 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.
  13. 13. 13 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 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? 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?
  14. 14. 14 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?
  15. 15. 15 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.
  16. 16. 16 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.
  17. 17. 17 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.
  18. 18. 18 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.
  19. 19. 19 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.
  20. 20. 20 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.