Traditional brick and mortar retailers advertise in newspapers etc... Internet retailers advertise on the internet. Google Adwords is internet based advertising.
When you enter a keyword into a search engine, results are then displayed based upon your keywords. There are two types of results; natural results and paid for listings. The natural results are displayed in the main body of the page and the paid for results are displayed in a highlighted box at the top of the page and in the right hand column. Do a search in Google to check it out.
This article focuses on paid listings.
So you have an internet based retail business and you want to drive traffic to your site! The easiest and quickest way to do this is to sign up with google adwords. Your ad will then display in the paid for listings box in the goolge results for your particular keywords.
How it actually works?
The first thing you have to do is sign up for a goolge adwords account. It is free to open an account.
Next you determine which keywords best describe your product or service. We will use our business as the model. Thus our keyword list might comprise some of the following keywords:
domain name register
There are a lot of factors that go into the determination of the best keywords that describe your products. The discusion of good keywords is beyond the scope of this article. Please click here to read more about good keyword selection.
So now that you have a list of keywords, it is time to utilize one of the tools offered by google to determine how much money you will be paying for your ads. Unlike traditional advertising, google does not charge a fixed cost for their ads, instead it works with a bidding system. The highest bidders ad is placed in the top position within the paid ad results. The next highest bidder is below, and so forth. Keep in mind when using the google bidding tools, that all amounts are stated in US dollars.
Each time a person clicks on your ad, your account is charged with a certain amount of money. This cost is referred to as your cost per click (cpc) and is determined by your maximum bid relative to the next highest and lowest bids. Thus you will never pay more than your maximum bid and will always pay $0.01 more than the next bid lower than yours. E.g. if you set your maximum bid to $1.50 and the next maximum bid is $1.00, you will pay $1.01.
So what is the difference between being placed at the top as opposed to paying a smaller amount and being placed further down the page? Ad results that are placed higher up on the page, receive more clicks. The rate at which your ad is clicked relative to the amount of times it is displayed on the page is called your click through rate (ctr) and is calculated as a percentage. Thus, ads placed higher on the page have a higher click through rate.
Keep in mind that your ad will not display every time a person searches on your keywords. The amount of times that your ad is displayed within the keyword driven results is determined by your daily budget which is one of the parameters you set within your google account. A lower daily budget with a higher cost per click (cpc) will result in your ads being displayed fewer times. However, if you set your maximum cpc too low, you might land up near the bottom of the page and receive only a very few clicks and not utilize your full daily budget.
How do i determine how much to bid per click?
One of the most valuable tools that google offers, is the bid/position/click through estimating tool. Basically, you enter a maximum bid, and the tool then calculates your estimated average position within the search results and your estimated daily click through rate(ctr) based upon a combination of your specified maximum cpc and daily budget. By using this tool and plugging in various amounts, you can then determine where you will be placed within the search results and how much you will be spending in a day. This will then assist you in determining your daily budget.
What is the best bid and daily budget?
There is absolutely no good or correct answer to this question. Fortunately google offers some very useful reporting tools, from within your account control panel, that gives you information about both your keywords in general and all the cost information related to these keywords, as well as a historical record of all your cpc and keywords info. Using this info, you can then determine your best cpc and daily budget.
Targeting by location and language.
Most online retailers cater to a specific language demographic, as well as a specific country or region. When setting up your google account, you will be given the opportunity to select your language and region. This parameter allows you to display your ads in the country's of your choice. There is no limitation here, you can display your ad in search results throughout the world. Thus a person in the U.S.A searching on the word "domain registration" will view your ad, provided you have selected the U.S.A as one of your regions.
Keyword matching options:
Google also offer keyword matching options that allow you to more accurately target your keywords to very defined searches. This is achieved through adding additional parameters to keywords. We will use the keyword example of "domain names" to discuss this feature. Below is the list of available matching options:
* Broad match - this is the default keyword parameter. Anytime a person
enters the keyword "domain" or "names" into a search
engine, regardless of what other words are included or the order of these
words, your ad will display in the search results. E.g. your ad will display
for the search "buy domain" or "register names" or "buy
domain names" or "register domain names".
* Phrase match - your ad will display when a person searches on the term "domain names" in this specific order, along with other words. E.g. your ad will appear for searches on "co.za domain names" or "buy domain names".
* Exact match - your ads will only appear when someone types in the phrase "domain names". It will not appear when a person types in "register domain names".
* Negative match - you can also tell the search engine when not to display your ads by including negative keywords. E.g. If we set up the word ".com" as a negative keyword, then when a person searches on ".com domain names" or "register .com domain names", your ads will not display.
The result of utilizing these keyword matching options is a decrease in your overall spend and an increase in your ctr and return on investment (roi) as your keywords are now more targeted in relation to your product offering.
This is a brief outline of the google adwords system. Google offers many more tools from within the account management interface that will assist you in managing a successful adwords campaign.