Category Archives: Adwords

7 Insightful Tips for Super-Effective Local PPC

Have you spent hours lamenting over your local ad campaigns? Have you struggled to understand why your local PPC efforts aren’t delivering the ROI you had hoped?

Yeah. Me too. I’ve been there.

My epiphany came when I stopped trying to be BIG. I was too proud to say that my local markets were the only thing that mattered. I wanted to be national. I mean, everyone needs PPC or SEO. Why not get the whole market? That was my mentality.

Local PPC tips nationwide map

Budgets can be a rude awakener. Days into the national market, a realization hit me: I just don’t have the capital to spend thousands upon thousands on PPC. I couldn’t compete at the national level.

The “ah hah” moment came when I realized that, while these big companies with IPOs and massive budgets might be able to win the national war, they wouldn’t be able to win a local battle. They don’t know my neighborhood. They don’t know all the little things that makes my area so special.

And guess what? Those same big companies you’re going up against? They don’t know your local market as well as you do, either!

It’s time to wipe the dust off that local PPC campaign and turn the notch up a little.

Here are 7 tips for local businesses doing PPC.

1. Take a Look at Your Books

Every PPC budget has a limit. As a small or local business, that limit is usually reached pretty quickly. With that being said, it is essential to spend money only on our most profitable products or services.

It’s such a basic principle, but we even find ourselves guilty of promoting all our services, instead of just focusing on the most profitable ones for our PPC campaigns.

Take a moment and call your accountant, make sure the books are setup to identify which products or services are generating not only the most revenue, but also the most profit.

2. Hey Google Search Console, Meet PPC

Have you been running an SEO campaign? Take a look at your best-performing keywords. What searches give you the most impressions?

As an action item, identify those keywords that are getting the most impressions using your Google Webmaster Tools, now known as Google Search Console. Next, compare those terms with your books. If you are getting a lot of impressions for a keyword that is also a profitable service or product, but not getting clicks for that keyword, it might make sense to create an ad group specifically for that term.

Local PPC tips ad groups

It’s about search engine positioning, not just search engine optimization.

3. Ad Groups and Copy Based on Cities

There are hundreds of ways to organize your PPC campaign, but we have found that the more locally relevant you can be with your ad groups and copy, the better. For example, let’s say you run a local business in Orange County, CA, and you have a limited budget.

If you want to make the biggest impact for your spend, usually you create a campaign for Orange County and then an ad group for each set of keywords while focusing your efforts on the entire county.

While that is good, what if you could create a campaign for each city that you do the most business in already? With this approach, we would make a campaign for Irvine and then each ad group would have keywords and ads specifically for that city. The goal here is to be as locally relevant as possible!

What does this mean for you? Higher Quality Scores, higher click-through rates,, and higher conversion rates.

It pays to be local!

4. Make Call Outs and Site Links Local

Ad extensions, as you probably already know, are a great way to take up more real estate for your advertisement and increase conversions. Unfortunately, most local businesses only rely on their address or their phone number extension to show their local swag.

Let’s beef those ad extensions up and start leveraging the power of being local. While your area code and address are great, let’s add our location to both our callout extensions and site links. We can then make each unique for the city ad groups we just created.

Local PPC tips use callout extensions

Local PPC tips use callout extensions

Yay for local PPC!

5. Zip Code in the Ad Copy and Display URL? Yes, Please

Using numbers alone is a great way to make your ad pop, but take it further and add your zip code. Imagine you are a plastic surgeon in Beverly Hills. What better way to show off that you are exactly the surgeon someone is looking for then adding that prestigious 90210 zip to your ad?

Two great places to add your ZIP code or city name is in the text and the display URL. Check out this sample ad below demonstrating the usage of both:

Local PPC tips include zip code in ads

6. Talk About Stuff Only Locals Know

If being truly local is something you desire, simply talk the talk. I love to surf, and one of my favorite spots to surf is San Onofre State Park. We don’t call it that though. We call it SanO.

If you want to really reach out to the local surf community in San Clemente, CA, don’t just use the term beach, ocean, water, etc. Talk about SanO, Trestles, T-Street or Lost Winds.

If you don’t know what any of those are or what they mean...perfect! You aren’t the target market.

Including price in your ad copy isn’t the only way to exclude bad clicks. Your target market has its own local dialect. Recognize that and write your copy in a way that resonates with your community.

Here is a sample of what an ad for the Rip Curl shop in San Clemente could look like:

Local PPC tips use specialized language

It’s time to start leveraging all that local lingo and relevance to your advantage. Talk the talk and your customer will be more likely to walk the walk.

7. Distance is No Obstacle

Is convenience, travel time, or location relevant to your audience? If so, let’s use that to our advantage.

Ever seen this ad before?

Local PPC tips coffee shop ad

Here’s how we could add some local flavor to this advertisement:

Local PPC tips improved local coffee shop ad

All we did here is combine potential business goals, more customers, with locally relevant information. The more relevant the merrier.

Whether you are a local business or a national brand, it’s time to think beyond location extensions and start to harness all the tools at our disposal.

Garrett Mehrguth is the CEO of Directive Consulting, which provides local SEO services for small to mid market companies. Garrett also teaches and speaks multiple times a month on SEO, content, and PPC throughout Orange County and Los Angeles, CA.

 

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International PPC: 3 Reasons You Can’t Afford NOT to Go International

We live in an increasingly shrinking world, and it’s become easier than ever to be an international vendor. Depending on what threshold value you use to calculate “ecommerce” there’s between 110,000 and 24 million ecommerce sites in the world, but only a fraction of them truly serve an international audience.

international ppc markets

What does it mean to serve, as opposed to take orders? It means:

  • Having landing pages that are in the native language of the market targeted.
  • Ensuring currency is easily convertible and you’re able to see the clients’ true value (and they’re able to have a seamless experience).
  • And most importantly, a smooth process of going from prospect to customer (this includes site speed, check-out, and shipment expectations).

Serving a non-domestic market can take a lot of work, but you can’t afford to leave the money on the table. Here’s why:

Lower Costs per Click

Distilling the perfect maximum cost per click (CPC) for your products (whether in Search, Shopping, or the Google Display Network) is an expensive endeavor as there will be flux in CPA while you’re finding that magic number. International markets come at an inherent discount, so the flux in Max CPC isn’t as prominent. Not to mention, once you find your magic Max CPC, you’re looking at a significant discount: the average CPC in India is $0.32 but the average CPC in the US is $1.65. Granted, these are averages, and not all clicks will be conversions, but if you can get an 80% discount on your clicks, can you afford to leave them on the table?

Loyalty and Average Revenue

The average “breakeven” CPC on US ecommerce is $2.56 (this factors in the client being a client for three years and spending $100 on their first purchase). With these metrics in mind, each customer is delivering you 55% ROI. By contrast, the “breakeven” CPC in Australia is $3.53 with the same first time purchase value, which means the ROI comes in at 114%. Yes, there might be more overhead associated with catering to that market, but given that the average CPC in Australia is $0.85 for every $1.00 spent in the US, profit is still possible. (Figures via the Lifetime Value Calculator.)

Not all international markets are price-point bargains, but they make up for it in their consumer loyalty. For example, Germany is one of the most expensive international markets, but once you earn the business, you likely have it for life.

Less Crowded Markets

Nothing drives up the price of your CPC like a crowded market-place, and the US is a very crowded market. With well over 1 million advertisers on Google and 699,000 advertisers on Bing, it can be hard to cut through the noise without paying a pretty penny.

bing vs. google markets

Many of the international markets have a fraction of this advertiser base, which means there’s time to test account structure and cement your brand’s dominance once you’ve proven out the economics. You’ll have more room to scale. Conversely, if you see your competitors advertising abroad, there’s a good chance you can be profitable too – not to mention entering a market will drive up the cost of clicks of those already there, so you’ll win on both fronts.

Webinar: Going Global in PPC

Ready to take the plunge? Register now for our upcoming Going Global Webinar, co-hosted by SEMrush and WordStream, for tips and tricks to ensure your international advertising is on the path to success. It’s next Wednesday, 5/27/15, at 10 AM Eastern. Have specific questions you want answered on the webinar? Leave them in the comments!

How Much Does Google AdWords Cost?

“How much does Google AdWords cost?”

It’s a reasonable question, and one we hear all the time, especially from newcomers to paid search. After all, those new to PPC are probably most interested in how much they’ll be expected to shell out to advertise on Google, and whether they can even afford it!

Unfortunately, there’s no easy, one-size-fits-all answer. The most common (and infuriating) answer is, “It depends.”

The cost of AdWords depends on several variables. In this post, I’ll explain how these variables will impact your ad spend, and demystify the concepts you’ll need to understand in order to set a realistic budget for your ad campaigns.

Here's a high-level, TL;DR preview of what you'll learn in more detail in this guide:

  • Google AdWords is based on an auction system that rewards businesses who have high-quality ad campaigns with lower costs and better ad placement.
  • You can exercise tight control over how your AdWords budget is spent using tactics like ad scheduling, geotargeting, and device targeting.
  • The average cost per click in Google AdWords is between $1 and $2 on the search network. The average CPC on the Display Network is under $1.
  • The most expensive keywords in AdWords and Bing Ads cost $50 or more per click. These are generally highly competitive keywords in industries that have high customer lifetime values, like law and insurance.
  • Giant retailers can spend up to $50 million per year on paid search in AdWords.
  • The average small business using AdWords spends between $9,000 and $10,000 per month on their Google paid search campaigns. That's $100,000 to $120,000 per year.

Now, let's examine these points about AdWords costs more closely.

How Does AdWords Work?

Before we dive into the figures and start talking cost, it’s vital that you know how the AdWords platform actually works.

One of the biggest misconceptions about AdWords is that whomever has the most money to spend has the most influence. While a bigger ad budget never hurts, AdWords is actually a more level playing field than many new advertisers realize.

Google AdWords functions in essentially the same way as an auction. Let’s take a look at how this process works.

The Ad Auction

The ad auction begins when a user enters a search query, after which Google determines whether the query contains keywords that advertisers are currently bidding on.

How much does AdWords cost Google ad auction

If advertisers have bid on some of the keywords in the user’s search query, the ad auction begins. The purpose of the auction is to determine Ad Rank, or where each ad will be positioned. The auction determines the inclusion and placement of ads according to the Ad Rank formula based on two main factors – maximum bid and Quality Score:

 How much does AdWords cost Google ad rank formula

Note: We won’t go into the specifics of the Quality Score formula in this post, but if you want to learn more about how Google determines the Quality Score of your ads, we’ve written extensively on the topic. Check out these resources to learn more:

So, back to how AdWords works. Once your Quality Score and Ad Rank have been calculated, Google uses this data to determine how much you’ll pay each time someone clicks on one of your ads. This formula looks like this:

How much does AdWords cost how much do you pay per click

Notice how Advertiser I can pay less for a higher position due to their better Quality Score?

This is essentially how AdWords works in a nutshell. There are variables that aren’t covered here, such as alternative bidding methods and ad formats, so if you want to learn more about how AdWords works, check out the full infographic here.

Now we’ve brushed up on the fundamentals, let’s dive into the numbers.

How Does My Google AdWords Budget Get Spent?

A common scenario that many newcomers to paid search find themselves in is when their advertising budget gets spent much more quickly than they anticipated.

Understandably, this can be quite a shock. Advertisers might assume their ad budget will last them for a month, only to discover that they’ve blown through their budget in a matter of days. This can lead to yet more misconceptions about paid search, namely that it’s prohibitively expensive. However, this isn’t necessarily the case, and is more often than not the result of a misunderstanding of how budgeting works.

PPC Budgeting Basics

You can think of ad budgets in the same way you would about any other budget. You start with a core figure that will represent the majority of your ad budget, and allow for a little leeway in case things change or something goes wrong. One way to start budgeting a PPC account is on a per-campaign basis.

Each campaign has its own unique settings tab in AdWords. This allows you to control specific parameters of each campaign independently of other campaigns in your account.

Each campaign should have its own daily budget. If you’re running several campaigns simultaneously, you should think about which campaigns have priority. For example, a campaign advertising your best-selling product may be more important to your business than another campaign promoting content to prospective customers at the top of the funnel. In situations like this, you might want to allocate a larger daily budget to the product campaign.

If you’re planning a monthly PPC budget, all you need to do is calculate the breakdown of daily budgets for each campaign, and allocate your funds depending on the priority of each campaign.

How Daily Budgets Get Spent

How much does AdWords cost daily budget

Let’s say you have an ad with a CPC of $0.25, and that you’d like to receive 300 ad clicks per day. Using these figures, you can calculate an estimated daily budget:

.25 x 300 = $75

In this example, 25 cents is the most that you’d be charged if 25 cents is your maximum CPC. However, the actual amount you could be charged per click can change, depending on the variables of each individual ad auction.

Just remember that, if you set your maximum CPC at 25 cents, you’ll never pay more than that for a click – but you might end up paying less.

Sounds simple enough, right? Well, there are several factors you should consider that can impact your PPC budget, the first of which is dayparting.

Dayparting

Also known as ad scheduling, dayparting is the practice of specifying when you want your ads to appear to prospective customers. Although your ads will still have to go through the ad auction process, you can tell Google when you want your ads to be displayed.

How much does AdWords cost ad scheduling settings

This is especially useful for local businesses that want to drive customers to a physical location through their ads. If you run a bakery that closes at 7 p.m., for example, you may not want your ads to be shown outside your normal business hours. Alternatively, you can specify that your ads run continually throughout the day, but allocate a greater portion of your daily budget for hours during which you want increased visibility.

To learn more about dayparting and ad scheduling, check out this guide.

Geotargeting

Just as you can allocate more of your budget to certain times of day, you can also spend more of your budget on certain geographical areas. This technique is known as geotargeting.

How much does AdWords cost geotargeting local PPC

Geotargeting allows you to prioritize the display of your ads to searches coming from specific areas. These areas can be as large as a state or province, or as small as a three-block radius from your store.

Geotargeting can be an excellent way to capitalize on growing mobile traffic trends and on-the-go shopping habits of today’s consumers, and it might factor into how you allocate your daily ad budget. For example, you may want your ads to appear alongside relevant searches in a particular state, but you could also allocate more budget to searches conducted in a specific city or even neighborhood.

To learn more about geotargeting and local PPC, check out this guide.

Device Targeting

Long gone are the days when prospects searched exclusively from desktop browsers. Today, consumers are searching the Web across numerous devices (often at the same time), which means you need to pay attention to where your most valuable leads are coming from. This is where device targeting comes into play.

How much does AdWords cost device targeting

Let’s say that you want to appear on results across both desktop and mobile searches, but that mobile traffic is more valuable to you. You could specify that a portion of your budget be used for desktop, but a greater portion be allocated to mobile devices. You may even want to devote more money to traffic coming from specific types of mobile device, depending on what you’re advertising or your ad copy.

Setting a daily budget and understanding how it will be depleted are the most important aspects of budgeting for PPC, but it pays to be aware of how advanced targeting options can affect your ad spend.

How Much Does a Typical Click Cost in AdWords?

Once you know what PPC is and how paid search works, it makes sense that your next question might be, “How much does a typical click cost?” As I mentioned earlier, though, this is not an easy question to answer.

In some ways, you can think of PPC advertising roughly along the same lines as traditional print advertising; you’d expect to spend more on a glossy full-page ad in a national magazine than you would for a classified ad in a local newspaper. In digital marketing, the distinction isn’t in the format of the ad, however, but rather the commercial intent of and competition for the keywords you’re bidding on. Some keywords are significantly more expensive to bid on than others, depending on how competitive the market is, and it’s important to realize this before launching a PPC campaign.

In the US, if you average across all different types of businesses and keywords, the average CPC in AdWords is between $1 and $2. That's on the search network. On the display network, clicks tend to be cheaper, and the average is under $1.

However, in super-competitive markets, clicks can get much pricier. Let’s take a look at some of the most expensive keywords in AdWords and Bing to give you an idea of how much a click can cost if you've got deep pockets.

The Most Expensive Keywords in Google AdWords

As Google owns the largest paid search platform, we’ll focus on AdWords first.

How much does AdWords cost most expensive keywords Google

Listed below are the most expensive keyword categories in Google AdWords, and the average cost-per-click of each. It’s worth noting that these are keyword categories, not actual keywords themselves – in some cases, the CPCs of keywords within each category may be higher than the averages stated:

  1. Insurance - $54.91
  2. Loans - $44.28
  3. Mortgage - $47.12
  4. Attorney - $47.07
  5. Credit - $36.06
  6. Lawyer - $42.51
  7. Donate - $42.02
  8. Degree - $40.61
  9. Hosting - $31.91
  10. Claim - $45.51
  11. Conference call - $42.05
  12. Trading - $33.19
  13. Software - $35.29
  14. Recovery - $42.03
  15. Transfer - $29.86
  16. Gas/Electricity - $54.62
  17. Classes - $35.04
  18. Rehab - $33.59
  19. Treatment - $37.18
  20. Cord blood - $27.80

You can check out the full infographic and learn about the methodology behind the data here.

The Most Expensive Keywords in Bing Ads

As Bing is growing in market share, we decided to conduct a similar study to find the most expensive keywords in Bing Ads.

How much does AdWords cost most expensive keywords Bing Ads

Listed below are the most expensive keyword categories in Bing Ads, as well as the average cost-per-click for each:

  1. Lawyers - $109.21
  2. Attorney - $101.77
  3. Structured settlements - $78.39
  4. DUI - $69.56
  5. Mesothelioma - $68.95
  6. Treatment - $67.46
  7. Annuity - $67.31
  8. MBA - $62.78
  9. Phone - $53.94
  10. Insurance - $53.14
  11. Diploma - $52.73
  12. Rehab - $49.67
  13. Cloud - $49.52
  14. Accounting - $44.82
  15. Exterminator - $44.66
  16. Mobile - $43.04
  17. Business - $40.75
  18. Repair - $39.80
  19. Plumber - $36.97
  20. Podiatry - $29.89

You can see the full infographic and the category breakdown here.

Of course, these are just some of the hundreds of thousands of keywords that businesses all over the world are bidding on, and costs can vary widely depending on a wide range of factors. Even if you’re in an industry with high average costs-per-click, such as insurance or legal services, it doesn’t necessarily mean you’ll be forced to pay these amounts for each click on your ad.

Furthermore, it's important to take ROI into account. These industries can afford high CPC's because the average lifetime value of a customer is so high.

Long-Tail Keywords

People sometimes like to point at the grand, show-stopping keyword categories above as a definitive example of how expensive PPC can be. The reality, however, is that these keyword categories only make up a small portion of total search volumes. Long-tail keywords actually account for the majority of Web searches.

How much does AdWords cost long tail keywords

Let’s take another look at the list from Bing Ads above. See the keyword category “Exterminator”? This category has an average CPC of $44.66. While some users may indeed perform a search for “exterminator [their town]” if they discover their house is infested with pests, other users may opt for a different approach – one that yields opportunities for the smart advertiser.

What if someone performed a search for the long-tail query, “How to get ants out of my kitchen”? They could be looking for do-it-yourself advice on how to rid their kitchen of ants, but they might also be open to seeing an ad for an exterminator (and if you’ve ever tried to keep ants out of a kitchen, this scenario suddenly becomes a lot more plausible).

This is the kind of opportunity that long-tail keyword targeting presents to advertisers. In addition to making up the vast majority of searches, long-tail keywords are also often significantly cheaper than shorter keyword-rich queries and can have as much – if not more – commercial intent.

Learn more about long-tail keywords in this guide.

How Much Do Typical Businesses Spend on PPC?

Usually, once someone has asked about the average cost-per-click of a PPC ad, their next question will be how much do “typical” businesses spend. Unfortunately, this is another question without an easy answer. However, that doesn’t mean I can’t tell you a little bit more about how much a “typical” business spends on paid search. First, we need to look at overall spend data by industry.

If you look at the average CPC data above, you’ll see that the most competitive terms are found in the insurance, financial services, and legal industries. WordStream looked into the overall spend of these and other industry verticals, and we saw there was a degree of overlap between the average CPC of a keyword category and the total spend in that industry:

How much does AdWords cost total spend by industry

As you can see, companies in the financial and insurance sectors spend the most by a significant margin ($1.2 billion), with retailers coming in second. Individual companies in these industries often spend $40 to $50 million a year on Google AdWords. For example, Amazon spends over $50 million per year. Clearly, they're getting good ROI on that spend!

Of course, this data is interesting, but it’s not terribly useful to a would-be advertiser who’s still on the fence about AdWords. For one, a handful of major brands dominated each individual category – businesses that likely bear little resemblance to those who are considering getting started in AdWords (check out the full infographic here). The remaining $14 billion that makes up Google's ad revenue comes from a number of smaller businesses with smaller budgets. You don't need to spend millions on AdWords to make it work!

How Much Do Small Businesses Spend on AdWords?

With this in mind, I asked Erin Sagin, one of WordStream’s Customer Success Managers, about how much the average WordStream client spends on PPC per month.

As you might expect, Erin told me that the amount that our clients spend on PPC varies widely. Some only spend around $1,000 per month (and I say “only” purely for the purposes of context – that’s still a lot of money to many small businesses), whereas others spend upward of $30,000 per month, such as PPC management agencies.

However, Erin told me that the average WordStream client (mostly small and medium-sized businesses) spends $9,813 per month on PPC advertising. This average is derived from the entirety of WordStream’s client base, including the very smallest mom-and-pop businesses right through to mid-sized PPC management agencies.

Overall, the average CPC of keywords across all industries typically ranges between $1-2 – significantly less than the averages from AdWords and Bing listed above.

What Other Costs Are Involved in PPC?

Your ad budget will always be the largest, most direct cost associated with your PPC campaigns. However, while your ad budget is important, it’s not necessarily the be-all and end-all of your paid search efforts. There are other potential costs you may have to consider, depending on your business, marketing goals, and individual situation.

Agency Costs

Some small businesses opt to have an agency handle their PPC work for them. This approach offers several benefits, such as minimal personal investment of time and effort in actually managing your PPC account. Agencies can also boast many years of experience in PPC account management, making them trustworthy partners who can offer expert advice and guidance.

How much does AdWords cost Mad Men agency

Just another glamorous day at a PPC agency.

However, agencies don’t come cheap. Even smaller boutique agencies will take a percentage of your ad spend, regardless of ROI. Some agencies may guarantee a threshold ROI, whereas others won’t. Agency cuts typically hover around the 10% mark, though this varies from one agency to another.

Obviously it’s in the agency’s best interests to deliver results (to reduce churn and retain clients), but even if your ads don’t result in any conversions, you’ll still have to pony up and pay your agency unless it’s explicitly stated otherwise in your contract.

PPC Management Software

AdWords is a great advertising platform. It offers advertisers a high degree of control over the precise variables in their accounts, and can be extremely powerful in the right hands. The biggest complaint we hear from our clients is that, for all its power, AdWords can be intimidating – especially to new advertisers. That’s why many businesses opt to use PPC management software.

How much does AdWords cost PPC management software

Some business owners opt to manage their PPC accounts manually, and I get that. Times are tough, and every penny counts. However, if you’re pushed for time or aren’t sure what you’re doing (or both), investing in PPC management software is a great way to save time, reduce costly mistakes, and get on with actually running your business.

PPC software (like WordStream Advisor) is typically licensed, rather than purchased. This means that if you want to use software to manage and automate the legwork in your AdWords account, you’ll need to factor in subscription costs. WordStream offers six- and 12-month contracts as well as an annual prepaid option, which makes budgeting for PPC software easy, but if you’re looking at another platform, be sure to understand the terms of the contract before you sign anything.

The Price Is Right

As I’ve stated throughout, there are numerous factors that can have a significant impact on the cost of running a PPC campaign, but remember: almost any type of business can make AdWords work for them! If you’re not sure about anything I’ve covered in this guide, or you have specific questions, leave a comment and we’ll answer them as best we can.

 

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