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Can google adwords make money for my business?


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Google Adwords should be an effective channel for almost every business in Australia today. Unfortunately too many business owners end up paying the Google Adwords stupidity tax, the lucky ones for a month or less and (these people stop their accounts), others unfortunately have paid it for years and just don’t realise it.

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Can google adwords make money for my business?

  2. 2. Google Adwords should be an effectivechannel for almost every business in Australiatoday. Unfortunately too many business ownersend up paying the Google Adwords stupiditytax, the lucky ones for a month or less and (thesepeople stop their accounts), othersunfortunately have paid it for years and justdon’t realise it and those that, get how Adwordswork are achieving excellent returns and haveunlimited budgets.
  3. 3. Business goals – what do you want to achieveWhen you Find Your Ideal Customer – what is lifetimevalue of this client worth for your businessMeasures of Success – how will you track andmeasure performanceCompetition – how do your prices, services & USPstack up in the market?Can your business make money from Adwords?Once you have answered the above questions, youwill know whether Adwords is the right fit for yourbusiness. If you would like to understand more abouteach of these key points above, subscribe to our(members only section).Have a plan:
  4. 4. Once you have defined what clients are worth toyour business, you need to balance out short termand long term concerns.You might decide that an average client is worth$20,000 to your business over 2 years. As a rule ofthumb working on 20% cost of acquisition, you arewilling to pay $4000 for every new client. Thatincludes costs of salespeople, cost of marketing andcost of administration.There becomes a balance for many small businesses,in managing cash flows. To win a new customer willonly net $850 per month, yet cost up to $4000 toattain. This model is only scalable to cash flowlimitations in your business.Let’s take it to a deeper level.Know your targets:
  5. 5. Talk with most sales people, they will tell youthey close all of the good leads and the restwere tire kickers. If you are doing your ownsales, and you are honestly assessing yourperformance, you might convert 20% of (nonreferral or repeat clients) into sales. This willrange between 10-25% at the higher end.If you don’t measure sales performance,start doing it! Buying leads from onlinemarketing are very different to referral leads,the ROI is what counts here.Sale performance:
  6. 6. 10% of your leads turn into salesBusiness is already cash flow positive and canfund growthWilling to pay up to $4000 to win each clientThe business has capacity to service 4 extraclients per monthThe Adwords average cost per click is $10 andyour market is big with 100,000 searches permonth – to learn more about assessing marketsize, refer to article on Google Adwords keywordtool.Lets then work on simpleaverages for this example:
  7. 7. 40 leads are neededMaximum cost per lead is $400 per leadYou allocate a budget for up to $16,000 permonthWhat is needed:
  8. 8. Average market share from Adwords will be2-3% – not aggressively biddingThis suggest you could spend $20,000-$30,000per month @ $10 per clickAverage conversion rate from click into leadis 1-2% = $200-$400 per leadWhat should you expect: Onaverage
  9. 9. Based on $850 per month income from each client – 4new clients = $3400 per monthMonth 1 = -$12,600 ($16,000 -$3,400 new income)Month 2 = -$9,200 ($16,000 – $3,400 new income + $3,400previous month)Month 3 = -$5,800 ($16,000 – $3,400 new income + $6,800previous month)Month 4 = -$2,400 ($16,000 – $3,400 new income +$10,200 previous month)Month 5 = $800 ($16,000 – $3,400 new income + $13,600previous month)Month 6 = $4200 ($16,000 – $3,400 new income + $13,600previous month)How this will impact cashflow:
  10. 10. Hit profitability in between months 4-5 –$30,000 cash required approx.Cash flow requirements:
  11. 11. The average results quoted above includenovices and dedicated professional teams withsignificant differences between either resultsmaking up the averages. Unless you are skilled inrunning lead generating campaigns thereremains the chance (in the above example) ofblowing nearly $100,000.Working with a professional Online Marketingcompany with the above example should costbetween 15-25% of your budget.Budget on 20% to Agency for $10,000 per month= Pay the Agency $2,000 – advertise with$10,000. The services should include GoogleAdwords Management & Landing Pagesdesigned for conversion.How to get above averageresults:
  12. 12. Boosting conversion rates from click into leadfrom 1-2% towards 5% will be game changingReduced wastage on campaignCost per click optimised with ideal Adwordsquality scoreCorrect tracking of leads to precisely measurecost per leadAn experienced Adwords consultant or Adwordscompany should be able to deliver 20-30%improvement to any average Adwords account.When combined with boosted conversiondesigned landing pages the potential scope forimprovement is significant.Likely Outcomes:
  13. 13. This is a typical example of many businessestrying to run Adwords account themselves.If you would like to discuss your ideas forgrowing your business , we suggest ratherthan just jumping in feet first, talk with one ofAustralia’s most experienced AdwordsManagement team about what we deliverfor clients businesses just like yours.Think about the time andstress you will save yourself.
  14. 14. We welcome you to join our series Find YourIdeal Customers – via Online Marketingwhere our team will provide tips used by thePro’s that will reduce your Adwords StupidityTax.Find Your Ideal Customers isexempt from paying theGoogle Adwords StupidityTax.
  15. 15. CALL US AT: 1300 76 00 84OR VISIT US AT: Your Ideal Customers is anew start up Digital MarketingAgency that is now offeringservices to the market.