Google AdWords 102: Campaign Goal, Strategy and Cost


In last week’s post, I talked about the basics of Google AdWords and its uses for a small business owner. This week, we’ll discuss setting campaign goals and the strategies you may use to meet those goals as well as the costs that may be involved.

Setting A Campaign Goal

Before you start any advertising campaign, you should have a concrete goal in mind. Advertising can be very expensive. In addition, sometimes the products being sold are expensive, complicated, or both. Frankly, some products are just not cut out to be marketed online. This is the first question you have to ask yourself, “Does it make sense to advertise my product or service online?” Answering this question first will help you avoid spending unnecessary funds on a failed marketing campaign.

Once you determine your product has a chance online, it’s time to clearly define your campaign goal. A campaign goal could be making a sale as a direct result of the ad. Your goal may be for the ad respondent to call the store and ask for information or to visit your store. Before you start spending time and money developing your campaign, sit down with your team and come to an agreed-upon campaign goal.

Read Part 1: Google AdWords 101 — Paid Search vs. Remarketing

Depending on your product type and campaign goal, you may or may not be able to directly measure the result of your ads. Regardless you should be able to at least have some idea of the efficacy of your campaign. That might sound scary, but let me further explain the concept with an example. Let’s look at two fictional companies, ABC Cookie Company and DEF Car Sales:

Both ABC Cookie Company and DEF Car Sales are advertising online through Google AdWords. A box of cookies at ABC Cookie Company costs $19.99. When a customer clicks on the ad, they can learn about the cookies and then quickly decide whether or not to buy the cookies or not. Therefore if a person buys the cookies as a direct result of the ad, ABC Cookie Company can count that as revenue driven by the ads.

The average car at DEF Car Sales costs $25,000. Very few people will purchase anything that costs $25,000 online– at least not without testing it and knowing a lot more information. Does this mean that DEF Car Sales shouldn’t advertise online because they can’t directly relate revenue for ads? No. This means that the campaign goal of DEF Car Sales’ campaign will be different from ABC Cookie Company’s. While ABC Cookie Company may see success in selling cookies via Google Ads DEF Car Sales would see more benefit by using AdWords to build brand awareness. The person who saw their ad might click on it and be introduced to the product and other inventory, get information on the car being advertised, locate contact points for the dealership, and may even actually go to the dealership to purchase the car now or in the future.

As this example shows, even though the tools and methods being used are very similar, the two campaigns have completely different goals. Is one more effective than the other? That will depend on the performance of the ads. By defining the campaigns goals prior to launching, ABC Cookie Company and DEF Car Sales can make informed decisions concerning the efficacy of their ad campaigns and make adjustments as necessary.

Deciding on a Targeting Strategy

When advertising on Google there are two approaches you can take. I like to call these the shotgun approach and the niche approach.

If you choose to use the shotgun approach, you will advertise to as many people as you can without really researching or defining their interests. If you choose to use the niche approach, you will really try to hone in on exactly what your customers are looking for and try to serve them extremely targeted ads showing them exactly that.

Related: [Free eBook] Analyzing Google Analytics

For an example, let’s revisit ABC Cookie Company. If they chose to use the shotgun approach, ABC Cookie Company may serve ads showing a chocolate chip cookie to anyone and everyone who entered their website, regardless of the page they visited. If ABC decided to take the niche approach, they would serve chocolate chip cookie ads to people that have shown interest in that specific cookie — most likely indicated by visiting the chocolate chip page on their website.

While most companies would probably benefit more from the niche approach, the shotgun method may be a good choice when trying to build brand awareness and locate new customers.

Campaign Costs

Here we go — the question that is probably on every business owner’s mind — what is this going to cost me? The great thing about AdWords is that the answer to that question is up to you. Google allows you to determine the amount you want to spend and most advertising can be done for relatively low cost.

After you’ve created your campaign, Google will charge you on what is known as a “pay per click”, or PPC, payment structure. This means that Google only charges you when someone actually clicks on your advertisement (so don’t click on your own ad unless your testing it out). This provides another layer of performance tracking. If your ad is being seen by tons of people but not being clicked on, you may need to revisit your targeting strategy. If your ad is seeing a great click through rate (CTR) then you may want to replicate that type of ad for other products in your business.

I talked more about the bidding strategy and how Google prices their ads. If you missed that post you can read it here.

Google AdWords is another tool that small businesses should be using. If you think about it, Google is like your showroom floor. It’s where people go when they’re ready to buy and you need to be there when they look.

If you have questions about marketing your business on Google we can help. Click here for a 30-day free trial.

[latest_posts header=”More on Marketing” limit=”” category=”8″]

Ed Fox

Ed Fox

Ed Fox works closely with partnership stakeholders and product leaders on business strategic planning, as Director of Technology. Ed leads the product and technology teams, directing operations while working with clients to ensure a successful development process and, when appropriate, integration with existing platforms. Ed’s specialty is aligning technology vision and strategy with product and business direction, and converting strategic plans into platforms that can grow in the market.