It’s important to make clear that paid search is not a replacement for anything, but should instead be used to compliment other strategies. It takes a lot of time and effort, a lot of resources, and a lot of management, and it’s something you really need to invest in.

Let‟s take a look at some of the useful things you can do with paid search.

  1. Landing Page (A/B) Testing
  2. Finding new keywords that users are actually searching for
  3. Get above the fold on SERP where your competitors are beating you
  4. Establish your company as a leader in your industry by increasing your presence on search engines with paid search campaigns.

How Paid Search works:

Keywords, Ads, & Landing Pages

managing, matching, and optimizing keywords, ads, and landing pages

You start out by giving Google a list of keywords, which tells Google to display your ads on the results page when people search for those keywords. You then design your ads to be shown for these keywords, and your goal is to make them both relevant enough to the search query and attractive enough to get the searchers to click on them. Then, when viewers click on your ads, the ads direct them to your landing pages. The goal of your landing pages is to get the visitor to convert in some way – by buying your product, downloading an offer, etc.

Pay-Per-Click (PPC) Bidding

PPC, which stands for pay-per-click.

You don‟t pay for your ad to be displayed, and you don‟t pay when viewers roll over the ad with their mouse – you pay when somebody actually clicks on your ad. PPC is a much smarter choice than CPM (per impression) in most cases.

Google uses an auction-style bid to set their prices. For any given keyword, you have the top bidder – let‟s say they bid $5 for someone to click on their ad. Then you have the next highest bidder who values a click at $4.50, another at $3.75, another at $3.00, and so on, all the way down to the last person who says that they value a click on their ad for that keyword at, let‟s say, $2.25.

Google Ad Auction example screenshot

Now, these are not the prices you actually pay for each click. Instead, the lowest of these bids is used as the price for the least valuable (least visible) spot on the results page, and then each spot going up in value (more visible placements) is priced at an incremental dollar value higher (we‟ll use a $.05 incremental bid for this example). So in this case, the top bidder ends up paying only $2.50 per click, even though they bid at $5.00.

Google ad auction example 2

Quality Score

While your bid does play a large role in determining whether or not your ad is served for a given keyword, Google also uses something called „quality score‟ in making these decisions. Quality score is an algorithm that scores each of your ads for relevancy – it looks at how closely your keyword relates to your ad and how closely your ad relates to your landing page content.

If your competitor bids on a keyword at $5 and has a quality score of 4, and you bid on that same keyword at only $3 but you have a quality score of 7, Google may give you the top position for the price you bid because your ad is more relevant.

Quality score can also help you determine what keywords are cost-efficient for you to use.

If you find that you have a low quality score, it may indicate that the content on your site is not relevant enough to compete in that space, and it‟s not a cost-efficient channel for you.

Show Google how tight you can make the relationships between the keywords you‟re bidding on, the ad copy that you‟re displaying, and the landing pages you‟re directing to.

Keyword Match Types and Paid Search Strategy

When it comes to when your ad is displayed, you don‟t just want to pick a certain group of keywords and have the ad shown only when those keywords are entered into the search engine. Since there are an infinite number of ways that people can actually search for one term, Google has 3 keyword match types that you can use to give them more specific instructions for when to display your ads. These are: exact match, phrase match, and broad match. 

exact match will only display your ad if the search term includes that exact keyword, with the words in that exact order.

Exact match keywords are surrounded in brackets

The value of setting keywords to exact match is that you can target a very specific search audience. However, if you‟re only bidding on exact match keywords, you‟ve very narrowly defined your target, which sharply limits your reach, so chances are you‟re not going to get a lot of traffic.

phrase match will display your ad if the search term contains the same order of the words, but it can also contain additional words.

Phrase match keywords are surrounded in quotation marks

broad match will display your ad when the search term contains any or some combination of the words in your keyword, in any order.

Broad match keywords are not surrounded by anything

a popular strategy is to start with all keywords set to broad match, which opens up the floodgates to traffic. Now, a high volume of traffic may be a good thing, but you have to make sure that it is qualified traffic.

it‟s extremely important, if you set your keywords to broad match, to closely monitor what search queries are coming through. Don‟t forget, you can use negative match to add negative keywords when necessary.

A good keyword strategy is to use broad match and phrase match to drive traffic, then use the Search Terms report to find the keywords that convert well and make sense for your business, and set those to exact match, because they‟ve been proven to work.

Account Structure

The structure of your actual account in Google AdWords is critical to the efficiency and success of your paid search campaign. So you have your keywords, you have the list of keywords that you’re buying, and then you have the ad that you want to show when somebody types in one of those keywords. Now I want to group together the keywords for which I want my ad to be displayed, so that I can create highly relevant ad copy for these keywords and increase the likelihood that the searchers are going to click through.

I can do this by creating a grouping of related keywords in what is called an “ad group.” So let‟s say I have the keywords „tennis shoes,‟ „best tennis shoes,‟ and „shoes for tennis.‟ I can create a „Tennis Shoes‟ ad group, put those keywords in the ad group, and create an ad that is closely targeted to those keywords. Then if my company also sells other kinds of shoes, I can set up more ad groups, maybe for „Walking Shoes‟ or „Running Shoes.‟

Google lets you structure your account on one more level as well, and that is by “campaign.” So I can take all of my ad groups for shoes and put them in a „Shoes‟ campaign, then create another campaign for „Shirts,‟ with its own ad groups, keywords, and ads.

Campaign, Ad Group, Ad (Account Structure)

It’s important that you structure your account in such a way that your keywords and your ad copy are tightly woven together. Then you can use your ad groups and your campaigns to keep them nicely bucketed together and better organized.

Setting Your Budget

You set a daily budget on the campaign level. So for each campaign, you can dictate how much money Google can spend on those ad placements per day. I can say, I want to spend $300/day on my shoe campaign and $200/day on my shirt campaign, and Google won‟t exceed those amounts.

Google also offers a feature that allows you to request that your budget be spread out throughout the entire day.

Optimizing Ad Copy

Your ad copy is critical to an effective PPC campaign. When it comes to creating your ad, there is essentially a formula for it, since Google limits the number of characters you can use. The four numbers you need to remember are: 25, 37, 35, 35.

Ad copy key image

You have 25 characters for the title, which is displayed in blue text as the first line of the ad. Then you have 37 characters for the display URL (also called the „vanity URL‟), which is not the actual URL to which your ad directs viewers, but is simply for display purposes.

The URL to which you actually direct clicks to your ad is called the destination URL

Then you have two description lines of 35 characters each. You‟ll notice in the sample ad above that there are actually two calls to action there. The first line informs viewers that they can use blogging to generate leads, a more general piece of information, whereas the second line is a call to action for a specific offer.

This is the typical format of a paid search ad, but Google has been doing a lot of testing, so if your ad is displayed at the top of the search results, it may look more like the one below. Here, Google consolidates the title, URL, and the first description line into a banner format.

top of SERP banner ad

Measuring with Metrics

the only way to optimize your campaign is by using the metrics and reporting that Google provides.

Defining the 4 Basic Metrics

An impression is a single instance of your ad being displayed when someone types in the search keyword for it. So you can consider the number of impressions to be roughly the number of people who look at your ad, or at least the number of viewers to whom the ad is served.

A click is an instance of a viewer actually clicking on your ad once it has been displayed. This is distinct from the number of impressions because it requires that the viewer actually clicks on your ad, not just that your ad is displayed.

A conversion is an instance of a viewer that saw your ad, clicked on it, and took the action you intended for them to take once they got to your landing page. This action could be downloading an offer, purchasing your product, etc. When you set up your account, you put some tracking code on your website that lets Google know when someone has completed an offer or bought something, so they can keep track of conversions.

Spend is simply the amount of money that you have spent on your campaign so far.

These 4 basic metrics are important to track, but the analytics that will be the most critical for optimizing your campaign are actually derived from combinations of these simpler ones:

  • CTR = Clicks/Impressions- Click Through Rate (commonly abbreviated as CTR) is the percentage of impressions that turn into clicks. The more this percentage goes up, the more efficient your campaign is.
  • Conversion Rate = Conversions/Clicks is the percentage of clicks that turn into conversions. This is also a metric that denotes increasing efficiency as it goes up.
  • CPC = Spend/Clicks- Cost Per Click is the amount of money you‟re spending on each click. You can find the average CPC by dividing the total spend by the total number of clicks. This is a cost metric, so improving efficiency means decreasing this number as much as possible.
  • CPA = Spend/Conversions- Cost Per Acquisition is the amount of money you‟re spending on each conversion. You can find the average CPA by dividing the total spend by the total number of conversions. Again, this is a cost metric, so you want to keep lowering this number.

Just remember – the higher your percentage metrics and the lower your cost metrics, the more efficient your campaign will be. It‟s a good practice to set goals for your campaign performance in terms of these metrics. As you continue optimizing your keywords, ads, and account structure, monitor these metrics closely and use them to measure the performance of your campaign as you work toward reaching your goals.

Here are a few important take-aways to remember:

  • Paid search is based on a pay-per-click (PPC) model.
  • Account structure is critical. Organize your campaigns, ad groups, keywords, and ad copy appropriately.
  •  Aim for high quality scores to increase performance and reduce costs.
  • It‟s easy to waste money, so be careful how you choose to spend it.
  • Use paid search to compliment your inbound marketing. Focus on mastering inbound marketing first – blogging, driving leads, understanding search engine optimization, etc. Find out what keywords are directing traffic to your site from organic search results, and use these to inform your choice of keywords for paid search.
  • Always be optimizing! There‟s never a shortage of ways to improve your paid search campaign. Keep making improvements so you can drive your performance up and your costs down and ultimately run a successful PPC campaign.