Your Default CPC Bid

Your default CPC bid is the maximum amount you are willing to pay for a single click through from your ad to your landing page.

There are several different philosophies about how to set this number. Before I get to that, please notice the second box which is an alternate Content Bid.

Your ad can be shown on two separate search networks. The first is just Search. This means when a person goes to Google and enters a search, your ad will show. This is absolutely where you want to be.

The second is Content. Content is the Google AdSense ads that display on many pages. Google looks at the page and tries to understand what the page is about. This is where the name Content comes from - they are based on the "content" of the page on which they are displayed. Then, with the page owners active participation, Google shows AdSense ads – the same as Sponsored Links – on the page.

My problem with content ads is my experience has been they have dramatically lower click through rates.

Now you may find you get your best sales results from content ads instead of Search ads. You will learn this by tracking results. (More on that later)

The important thing here is that you may want to set a different bid for content or you may want to disable content ads completely.

If you do not enter a separate bid amount for Content Ads here, the other CPC bid will be used.

If you do not go to your Campaign Management Tab and turn off Content Ads, they will be displayed.

Now back to how to set you CPC bid.

AdWords is an auction. You bid on the ad. If your bid is the highest, generally, you get to be the #1 result for that specific search. Each individual search is its very own real time auction. You can change your bids at anytime if you do not like you position.

Usually the CPC bid is higher than your actual average cost per click. The auction works like this…

• Your bid is the most you will pay
• This sets the price for the position above you
• The position below you sets your price

Bid Cost Example
• You bid $1.51
• Competitor “A” bids $10.88
• Competitor “B” bids $0.65

• “A” pays $1.52 – one penny more than your maximum CPC bid
• You pay $0.66 – one penny more than “B’s” maximum CPC bid
• “B” pays $0.05 or $0.10 – the minimum bid

If you go ahead and enter a CPC bid amount, Google will help you estimate the total daily cost and number of click throughs you can expect. This is a very useful guide. I have found it to be a high estimate on the average position my ad would run and low on the average number of daily click throughs – and therefore low on the daily cost. Neither by much, but some.

I use bids that do not end in 0 or 5. Instead of bidding $1.00 I will bid $1.03. I figure that most people bid in 5 cent increments so if I am slightly over I will win the bid.

What position do you want to buy? Two things to consider. The first is that the #1 position will get more click throughs. The second is that content ads and ads on other networks like AOL only display the first 4 results.

Google Search shows the first 8 results. So if you are result #5 you will not show on content often.

Some articles I have read make an argument for the 8th position being more valuable than the 5, 6 or 7 position. This is the idea that more people skip to the end than read the middle. This is probably true, but I always want to be #1, so I have never tested this.

I would always suggest you bid for the #1 spot. If it pays a profit to get people to your site, you want to get as many as fast as possible.

Your Daily Budget

If your ad is clicked on enough times in a 24 hour period then you will have used your daily budget. Your ad will stop showing until the next 24 hour period begins.

Here is an example:

1 - You set a Daily Budget of $25.00
2 - Your cost per click is $1.00
3 - Between midnight and 10 AM you have 25 click throughs on your ad.
4 - Your ad is taken out of the results at 10 AM and does not show again until midnight – or the start of the next day.

Think about this for a moment.

What action are you asking your visitor to take when they come to your page? Can they do everything they need to without calling you on the phone?

If the page your ad sends people to is designed to get those visitors to call you, do you want the ad to run when no one is at the phone to answer the call.

Ideally your online business will allow your visitors to become customers completely by actions they can take on your web pages. For insurance this would be get a quote, complete the application and pay you. If this is not yet true for you, then you will probably want to control the timing of the ad displays.

As of this writing you can only control this manually. But at least that is very easy. You can log on to your AdWords account anytime and “Pause” or “Unpause” your campaigns. The action you indicate becomes effective within minutes of your checking the box in your AdWords account.

Most beginner advertisers on AdWords have a natural fear of the cost. I suggest you start with a higher Daily Budget limit than the amount on which you first settle. Remember, you can pause your ad anytime and that stops all cost.

I think the most important thing for you to learn from your ads is whether they are paying off or not. I track these statistics on a daily basis in a spreadsheet:

1 - Page visits for the page to which I am sending the AdWords click throughs
2 - Number of Click Throughs
3 - Number of sales
4 - Value of sales
5 - Value of each click through. This is the value of sales divided by the number of click throughs. This will eventually become the maximum average cost per click.

Next to these daily numbers I make notes about any changes I made to the ads or the landing pages. I also note changes in the position my ads take and changes in who the other advertisers are that show for the same AdWords I am using.

This information lets me see what effect even small changes can have. But if I do not get enough visits, these numbers will not make a true sampling or provide useful averages. So I think that getting this information as fast as possible is actually more valuable in the beginning than the amount you spend per day.

The goal of your AdWords campaign is to make more money from sales than you pay for the ads. The sooner you learn the right combination of wording in your ads and wording on your landing page, the sooner you can begin making money – or decide that for you this will not work.

Once you can prove to your self that the revenue is greater than the cost of the ads, your daily budget becomes totally irrelevant. In my mind if I am making $2 for every $1 I spend on ads, my first goal is to figure out how to spend as much on ads as possible, not how to spend less.

Manage Your Budget and Set Your Bids for AdWords

The next page in set up for your AdWords account is Manage Budget. There are two separate but related inputs on this page.

Your Daily Budget is the maximum amount of click through charges you allow Google to bill you for in a single 24 hour period. This period runs from midnight to midnight for your local time.

Your Default CPC Bid. CPC stands for cost per click. This is the maximum amount you are willing to pay for any single click through. Much more on this in a moment.

Enter Keywords into Your AdWords Campaign

Once you have saved your ad text you are asked to enter the keywords you are willing to pay for to have you AdWords ad be shown.

Naturally, you should first use the keywords you used when you built the web page you are sending people to when they click through your ad.

There are three ways to enter the same keyword or words.

1 – You can enter the word with no “ marks or [ marks. This will mean that if the word or words you enter are anywhere in the search, your ad will be displayed.

2 – You can enter the word or words inside “ marks. This means that if the words appear only in this exact order in the search will your ad be displayed.

3 – You can enter the word or words inside [ ] marks. This means that only if these are the only words and in this exact order will your ad be displayed.

I suggest you enter each keyword each way. The reason is that AdWords wants to show the most relevant ads. AdWords considers the words in [ ]’s and in “ “’s to be more relevant that the plain entry. They consider the words in [ ] ‘s most relevant of all.

When you are more relevant you will be placed higher in the results.

AdWords has an excellent keyword suggestion tool. You can enter a keyword or two in the “Want More” box to the right of the keyword entry and AdWords will return a great many suggestions. While you may not want to use them here, they will definitely give you some ideas for more pages. These words are words that Google knows have been used for searches and feel they are related to your search topic.

Do not load up any single ad with lots of keywords. You need to remember that your strength is your narrow focus. If some of the keyword suggestions look promising you should consider creating a page, or group of pages focused on those keywords.

AdWords Ad Text

AdWords gives you 25 characters for your Headline and 25 characters for your next two lines of description.

Some Tips:

1 – Write your ads in a word processor first so you can spell check them.
2 – If you use any of the words that are used by the searcher, those words will show up in bold in your Sponsored Link when it is displayed.

The AdWords link can only go to one page. Think about what that page is about when writing your ad.

Your ad should never be misleading. There are two reasons for that. The first is ethical, the second is selfish.

Ethically, if you mislead people with your ad they will not trust your pages or you.

Selfishly, you are paying every time someone clicks on your ad. If you mislead them they are not likely to stay on your page or end up doing business with you.

Tip: If you say in your ad you are offering something for free you absolutely need to have that free offer deliverable on your page. The Sponsored Search companies are very sensitive to this. They will check your page and close you down if you mislead with free offers.

Use of words like “best”, “leading”, “cheapest” are not allowed. The automated editors that review your ad will tell you this and not allow them to be published.

An example of a possibly good ad if you are selling workers compensation insurance in Raleigh, NC might be….

Workers Comp Insurance
Get free online quote for workers
compensation insurance. Raleigh, NC

That is 22/33/35 characters. It will have the words workers, comp, insurance, Raleigh, and NC in bold if they are part of the search.

Here is the unfortunate truth about what makes a good AdWords ad. I never know in advance. Neither will you. Every time I think I have a great idea, I put it online and measure the results and I am wrong. Then I will try something I think is just stupid and it will have great results.

The good news is that AdWords lets you run multiple ads at the same time. They then let you see the results of which ads had better click through rates.

Your job is to keep tinkering with things and reviewing the results every day. You will find by trial and error what actually works best for you. In my experience a change of just one word can double your click through rate. You just have to find that one word. You can find that one word by testing and measuring the results.

Targeted Location for Your AdWords Campaign

I think you can target locations down to the zip code. I would suggest for insurance sales, since you have to be licensed on a state by state basis, that you target only the states in which you are licensed. For other industries that have similar licensing requirements, you should make the same choices.

Using insurance as my example, if I were in Raleigh, NC, I would probably start by targeting the entire state.

I would not limit my self to just driving distance from my office. I would like to make any sales I could anywhere that I am licensed to sell. Remember the Internet removes distance from your market place definition to a great degree.

Also remember, one of your goals is to make all the interactions your customer could have with you in person or on the phone available online.

Tomorrow I will cover Writing You Ad

Targeted Language for Your AdWords Campaign

Targeting customers by language will normally be limited to English. If you have web pages that are written in Spanish you should target the language to Spanish.

The issue here is not what country the search is from – that comes later. The issue is what the default language setting is in the browser being used.