Is Google AdWords a Good Opportunity for YOU?

I recently read a comment in an online discussion where someone said you need $5,000 – $10,000 to even consider AdWords. In that same thread, another “expert” proclaimed that AdWords doesn’t work anymore because the costs are too high. With all this conflicting (mis)information flying around it’s no wonder there’s a TON of confusion and fear around how to get started.

If you’re considering a Google AdWords campaign, then follow the steps below to see firsthand whether or not AdWords is a good opportunity for you.

Do Your Homework FIRST

In college, I spent several summers on campus and my friends and I loved to go to several swimming holes. One in particular was a river flowing about 40 feet below a bridge. Of course, that meant the main event was jumping off the bridge. We actually did very little swimming when I think more about it.

Like most sane people, I did not run to the edge of the bridge and take a leap of faith. I did a little homework first. I checked to see where the river was deep enough so I wouldn’t hit the bottom. Plus, I watched some other experienced jumpers to see if I could use their already perfected technique.

And I recommend you do the same thing when it comes to Google AdWords. I know AdWords is scary and I also know it gives you a similar feeling to jumping off a bridge. It’s exhilarating, but also dangerous if you don’t plan ahead.

Keyword Research

With AdWords search advertising, the first homework assignment is to go use Google’s Keyword Planner tool. Go to http://adwords.google.com/keywordplanner. Then search for keywords you think your prospects would type into Google to find your product or service.

If you do not find any relevant keywords, then AdWords search advertising is not a good option for you. Likewise, if there are only a few relevant keywords and they are only searched 10 times per month, then there’s not enough search to justify an investment.

However, if you do find relevant keywords and there’s a good amount of search volume each month, then AdWords could work for you. While you’re in the Google Keyword Planner tool, make sure you also check the cost per click (CPC) of each keyword. We’ll use that data in a minute.

Check Competitors

I mentioned earlier that before I jumped off the bridge for the first time, I watched a few veterans. I noted where they jumped, how far they jumped out, and their body position entering the water. No reason to go through my own trial and error when the risks are so high. Might as well copy what’s working.

Same is true with AdWords. Before you launch your first campaign, take a look at what your competitors are doing for the keywords you found above. Review their ads, their landing pages, test their webforms, and even give them a call to hear their phone scripts. If they have been advertising for more than 3 months, then chances are pretty good they’ve figured out a thing or two. I always recommend you borrow what’s working for your competitors rather than start from scratch.

Run the Numbers

The final step in this process is to run the numbers. During your keyword research, you identified the cost per click for each of your relevant keywords. Then you checked your competitors and figured out a sales path that seems to work in your market. Now we want to see if the numbers make sense.

For example, let’s say you found keywords that will cost $5 per click. And based on competitor research, the sales path that seems to be working is to get prospects to click on your ad, then complete an online form to schedule a free in-office appointment. Then during the appointment, you’ll convert the prospects into clients/customers.

Now that we have the sales path and the cost per click data, we can run the numbers:

$5 cost per click
100 clicks on your ads
$500 total ad spend (100 x $5)
5% schedule an appointment (you’ll have to estimate this number)
5 prospects (100 x 5%)
20% convert into paying clients (again, you’ll have to estimate this based on past experience)
1 new client (5 prospects x 20%)

Based on the numbers above, you would invest $500 to generate 1 new client. The big question mark is your client lifetime value. If a new client is worth $2,000 in this example, then AdWords probably makes sense. If a new client is only worth $200, then AdWords doesn’t look like a great option. In the latter situation, I recommend you focus on increasing customer value and see if it’s possible to increase the conversion rates from visitor to appointment and from appointment to client. Those are the big leverage points.

By following the steps above, you should be able to assess your particular opportunity to advertise in Google AdWords. Remember, do not dive in before you’re sure it’s safe!