How to Increase Sales & Reduce Cost

Many advertising campaigns are not profitable right from the start. In fact, some of our most successful AdWords campaigns lost thousands of dollars in the first few months of testing before we turned them around via optimization.

But I don’t consider the money “lost” or wasted during this testing phase. I believe it is an invaluable investment in market research because the data collected can be used to:

improve the campaign so it’s profitable (ideal scenario that we’re going to talk about in this article)
launch a new campaign in a different medium (i.e. test direct mail now that you know your conversion rates)
quickly change the business strategy before losing any more money (not ideal, but better to learn fast than to slowly leak money)

In this article we’re going to focus on how to improve a Google AdWords search campaign once it’s up and running. This is relevant whether your campaign is already profitable or not because the process of optimization is never complete. If you’re not continually improving your campaign, then eventually your competitors will sneak up on you and erode your profits.

AdWords optimization for a search campaign can be broken down into 5 core areas:

Campaign Continuity
Keyword Optimization
Ad Copy Optimization
Landing Page Optimization
Top Performer Isolation

1. Campaign Continuity

Before we dig deep into each component of the PPC campaign (keywords, ads, and landing pages), we need to make sure the experience for prospects is consistent from keywords to ads to landing pages to sales.

If there is any disconnect in the sales path, then there is no way to fully optimize the campaign. This is often overlooked and yet problems are usually obvious when you take a holistic view of the online sales funnel.

Here are some questions to ask to make sure you have campaign continuity:

What is the question your prospect is asking when she searches the keyword in your campaign and does it match the ad copy? (Note: there are different questions for each keyword)
Is the promise or claim made in the ad clearly visible on the landing page above the fold?
Are the facts in the ads clearly reiterated on the landing page?
Is the prospect 100% confident and there’s absolutely no doubt she is on the correct page after clicking on the ad?
Is the landing page laser-focused for one keyword topic and there are no irrelevant topics in order to use the same landing page for multiple keywords?

As you can see, the focus of the questions is to make sure the prospect has a consistent experience from searching a keyword to reading and clicking on the ad to reading and purchasing from the landing page. If this process is not consistent then there are no tricks or techniques to overcome these basic flaws in the sales funnel.

So if you answered YES to all of the questions above, then you’re all set and you can move on to the second core area below.

However, if you answered NO to one or more questions, then you need to first fix your campaign continuity so your prospects move smoothly from keyword to ad to landing page. You may need to edit ad text, break up keywords into multiple ad groups and/or create more landing pages to complete this step.

2. Keyword Optimization

Alright, now that we have campaign continuity, let’s move to the next step: keyword optimization.

The keywords are the foundation of every great ad campaign. At this point I will assume you’ve done your homework and started with a solid list of keywords from competitive research. If you haven’t done a good job with keyword research, then check out “How to Conduct Keyword Research To Launch Your PPC Campaign.”

The 3 basic functions of keyword optimization are:

Bid Optimization
Keyword Expansion
Keyword Elimination

Bid Optimization

There are many different bid optimization strategies and I don’t have time to go into all the details, but the basic concept is to find the optimum bid that will generate the maximum number of conversions at a target cost per conversion.

So naturally this requires you to have conversion tracking set up and if you have a complex sales cycle, then you’ll need to incorporate offline tracking in addition to online conversion tracking.

Plus, you need to know your target cost per conversion. If you’re selling a $100 product and you’re comfortable making $20/sale, then your target cost per conversion is $80.

Next, you can calculate the maximum cost per click for any particular keyword (Max CPC), which is the Conversion Rate multiplied by the Target Cost per Conversion. If we have a conversion rate of 2% and our target cost per conversion is $80, then we can pay up to $1.60 for every click.

Now keep in mind every keyword will have a different conversion rate so you have to run this calculation for each keyword separately. And to make things even more complicated, competition will dramatically change how much you pay for each click so you need to monitor these numbers closely.

Armed with your Max CPC, you can now adjust your bids accordingly.

Keyword Expansion

Keyword expansion is fairly straight forward. On the Keyword tab in AdWords, click on “See search terms” to run the Search Query Report. From here you can see exactly which keywords are driving conversions and add them to your campaign so you can optimize bids at the keyword level.

Keyword Elimination

While you’re on the Query Report, you can also sort by Cost to find keywords that are NOT converting. If a keyword hasn’t converted after 200 clicks, then I pull it out and use negative matching so my ads do not show any more for that keyword.

That’s all there is to it. Simply find keywords that are wasting money and eliminate them from your campaign using negative matches.

3. Ad Copy Optimization

Optimizing ad copy is an ongoing iterative process. At all times I recommend at least 2 different text ads rotating evenly so you can periodically check the stats to determine which ad is best. Then when you pick a winner, add another ad to try to beat the best ad copy.

So you’re probably wondering if there are any tips or tricks to writing great ad copy.

And the answer is yes, but unfortunately great copywriting takes a LOT of practice and education so don’t expect to create compelling ads on your first try.

Here are some quick tips to help you get started:

use abbreviations when ever posssible (i.e. with can be w/)
use symbols like &, #, %, etc
capitalize the first letter of every word
use the keyword in the display URL as a subdomain or subdirectory
test using quotes around your headline
use a call to action like “Act now” or “get free report”
use exact numbers rather than rounding
use proven ads rather than starting from scratch. For example, “Who else wants a ____?” is a proven ad headline and you can find many others by studying copywriting.

And finally, don’t try to sell in your ad. The number one goal of your ad is to get prospects to click through to your landing page. Your landing page will then sell the prospect to make a purchase.

4. Landing Page Optimization

Like ad copy, landing page optimization is an ongoing iterative process. There are many tools to help you set up split tests, but if you’re just starting out I recommend you use Google’s Website Optimizer. It’s easy and free to get started.

In my previous article, “8 Elements of Landing Pages That Sell” I explain the 8 key elements of landing pages. First, I recommend you include all 8 elements and then set up split tests to improve on each area of the page.

If you’re not sure where to start and/or you’re overwhelmed by all of the options, then start with your headline. The landing page headline is by far the most important element and it’s a big leverage point for improving conversions.

5. Top Performer Isolation

The final step in optimizing your campaign is to isolate your top performing keywords, ads, and landing pages. In every campaign, you’ll find that most of your sales are generated by a handful of keywords.

Eventually you’ll hit a limit to how much you can optimize and ad group with multiple keywords. When this happens, you can typically improve your campaign by placing your top keywords in their own separate ad groups.

This will allow you to optimize the ad text and landing pages specifically for each of your best keywords. When you’re ready for this step, read step 2 in the “4 Steps to Launch and Profitably Scale PPC Campaigns” which explains the “peel and stick” method.

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