Tip #2: Know your budget
If you want to make your AdWords account more efficient, start here. It may sound obvious, but a former AdWords employee agrees that few people really understand their AdWords spending.
To set up a campaign you have to specify a daily budget. Oftentimes, individuals make the mistake of setting their budget high thinking there’s no way they’ll reach it. Think again. By setting a budget, you’re agreeing to spend that much per day.
I like to shape my budget by considering the profits earned on the average customer. Hypothetically speaking, let’s say the average customer spends $100 on a tour, of which $75 is profit. I’ll then set my budget to some multiple of $75, which could be $75 per day or $150 per week. Aligning your budget with the applied profit value of your average guest provides an easy way to determine the success of your campaign.
In other words, if you spend $75 per day on AdWords and generate an average of one new customer per day as a result of the campaign, you’re breaking even. If you’re generating less than one customer per day, perhaps AdWords isn’t a profitable strategy for your business, or you should make adjustments to your campaign.
It should be noted that you do not have to spend the profit number you come up with as a minimum daily amount. If $75 is your per person profit number, you can spend $150 per week on AdWords and if you generate two new customers in that week, you broke even.
Of course, for these calculations to work you need Google Analytics to keep track of your site’s conversions. If you use booking and marketing software to manage your business, you’ll be able to see which online bookings come from AdWords in your “Multi-Channel Funnels” module.
In addition to setting your daily budget, you’ll also need to set bids for the different keywords in your campaigns. The higher you bid, the more likely your ad will appear for that keyword. But this also means you’ll burn through your daily budget quicker. Google AdWords can provide you with keyword bid estimates, as well as how visible your ads are at a given CPC bid (e.g. you might show up in 30 percent of searches when you bid x for the keyword “zip lines”, but you could show up in 70 percent of searches if you raised your bid to y.)
Now that you’ve figured out your budget, let’s find ways to make it go further.
Tip #3: Understand Google’s Quality Score
The best way to extract the most from AdWords is to make Google trust you. Google’s job as a search engine is to provide its users with relevant results, and that includes AdWords ads.
Many sorry marketers know the perils of unscrupulous AdWords strategies. As Evan Tipton, owner of 3 Rivers Marketing Group, puts it, “When it’s not done right, AdWords is a great way to waste a lot of money.” But when executed properly, AdWords can be a meaningful marketing tactic. The key to success lies in your ad’s Quality Score.
