What is the one edit you can make to a Google AdWords campaign to get better ad position, cheaper clicks and more sales?
Did you know that was possible? I promise, this is not a trick question. You can literally reduce ad costs while at the same time improve your ad position and generate more sales with just one edit. In case you don’t believe me, I’ll even prove it with some basic arithmetic.
Here’s your first hint…
Google AdWords Does Not Rank Advertisers By Their Bids Alone
Contrary to what many people believe, the Google AdWords auction does not simply reward the highest bidder with the deepest pockets. In fact, savvy advertisers know that it’s possible to rank #1 in the AdWords results and pay less than the competitors in the #2 and #3 positions.
When you think about it from Google’s perspective, then it makes perfect sense. Let’s look at a very simple example where we have advertiser A who bids $5 per click, and each day his ads are clicked 10 times out of the 1,000 ad impressions. That means Google gets paid $50 per day by advertiser A. ($5/click x 10 clicks = $50)
Now let’s look at advertiser B who bids only $2. On the surface you may think Google should put advertiser A #1 in the results because he’s bidding much higher. Not so fast! AdWords is a pay-per-click network so Google only makes money when those ads are clicked on!
If advertiser B bids $2 per click, and each day his ads are clicked 30 times out of the 1,000 ad impressions, then Google would make $60. That’s $10 more per day despite the significantly lower bid by advertiser B. Clearly, it’s in Google’s best interest to give advertiser B the #1 spot to maximize their own revenue.
So again, AdWords does not simply rank advertisers by their bids. AdWords also looks at both the advertiser’s bid and their click through rate (CTR), or the number of times an ad is clicked divided by the total number of ad impressions.
This leads us to the following…
High CTR = Better Ad Positions
I just proved this in my example above. If your ads have a high click through rate (CTR), then Google will reward you with better ad positions.
This also means…
High CTR = Lower Ad Costs
Take another look at my example above. Advertiser A had to invest $50 in order to get 10 clicks (or website visitors). Advertiser B only had to invest $20 to get those same 10 clicks.
And finally, this means…
High CTR = More Sales
If advertiser A and B both have the same budget ($1,000) and the same sales conversion rate (5%), then advertiser B will generate more sales because of the higher click through rate:
- Advertiser A: $1,000 budget = 200 clicks = 10 sales (200 x 5%)
- Advertiser B: $1,000 budget = 500 clicks = 25 sales (500 x 5%)
OK, can you guess the answer now? What edit will give you better ad position, lower your costs and generate more sales?
Drum roll please….
The answer is…
Edit your ads!
Your ad copy has the biggest impact on your click through rate, which you now know will lead to better ad position, lower costs, and more sales. So make sure you’re constantly testing new ad copy in your campaign to improve your CTR. This is the one area that can have the biggest impact on the performance of your campaign.
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