There is ONE central idea that you need to understand to work with Google AdWords.
If you understand, you are going to be able to turn your time into gold, because:
- Google is going to literally reward you and you'll see the price of your clicks fall.
- With the same budget, you are going to get more visits and your customers are going to be the ones rewarding you for the second time. As a general rule, more visits means more sales.
On the other hand, if you don't understand Google's philosophy, you are going to pay way too much for your clicks, your competitors are going to swallow you whole, and using Google AdWords is going to be really hard on your wallet!
THE thing to understand is that, for Google, relevance is the only thing that matters.
To get a better idea of how Google works, let's go back to 1998.
At the time, the big search engines were Alta Vista and Yahoo. Nobody would have guessed that Google would pass them all up in just a few years, with no marketing budget and no advertising.
The Google philosophy was to build a search engine that would give people exactly what they were looking for, as quickly and accurately as possible. If you were searching for "wood chair", they wanted to give you the best and most popular site on the first page of results.
With a bit of sarcasm, we could say that the other search engines had the same philosophy: but that's not exactly true. The results from the other search engines were simply pages that contained the words "wood chair".
So, how did they do better?
By going in a new direction because, at the time, all semantic techniques for analyzing page content were the same.
They wanted to index pages containing sought after keywords by adding a popularity rating in order to better index them: the ever-so-famous Page Rank.
Ideally, to rate the pages, they would have used real data based on site activity (statistics relating to the visits a site receives), but this wasn't possible.
So, they decided to see which sites were "desirable". How? By starting with the 100 or 1000 largest sites in the world (that everyone knows), given that they are already accepted and popular, and by going to see who they are linked to! And that's something everyone can know.
Google analyzes web pages to give them a rating that reflects the relevance of a page for the keywords in a search.
The more the page in question is referred to on the web (the more it's linked to other sites), the better its ranking.
This is basically how they did it: Starting from this simple idea based on a factual analysis of things.
Let's get back to something more concrete and take a look at how Google applied this same type of principle when they started to sell sponsored links (AdWords, advertising links) on their results pages. In particular, let's take a look at why, contrary to what everyone believes, it's not the person who pays the most who is first in the list of advertisements (Yep, you read that right. It's not the guy who pays the most who comes in first)!!!
What fundamental facts should you know about AdWords?
* What does Google sell to people like you who want to buy AdWords? Advertising space.
* How does Google get paid? By billing you for the click when they send a prospect to your site.
And now "THE THING" to understand:
Google puts the AdWords ads that bring in the most money first (obvious?).
Why would Google take a site that's willing to pay £1 per click and put it in first position on the results page for 100 searches, but that is so irrelevant that it is never clicked on (and therefore, Google makes no money), rather than putting your ad in first position, who's content is so relevant that 5% of the people who see your ad click on it and pay £0.10? They wouldn't! Your ad will bring in £0.10 more than your competitor who wants to pay £1.
Clearly, it's more profitable for Google to put the ad with the highest results in first place using this formula: "click through rate x price of the bid".
How does this work in concrete terms?
Actually, in the beginning, when you're new in the system, Google AdWords "gives you the benefit of the doubt" and gives you the same click through rate as your competitors and then lets the visitors do the work. The more visitors who run searches and click on your ad, the higher your click through rate will be and the higher you'll be in the list.
In other words, Google rewards you for your relevance and the people who search on the Internet vote for you. If your ads get a lot of clicks, that means they are relevant. If they're ignored, then they're not. It's as simple as that.
The higher your click through rate is, the less you'll have to pay for the position you want. But if you write crappy ads, Google's going to make you pay more to put them up because they won't bring in very much money, or none at all.
It's the Darwin effect, a natural selection that weeds out the bad ads and helps the good ones grow. This is good for Google users, good for Google and good for you!
What you need to get out of all of this is that your ads and your content need to be relevant and filled with the keywords you're bidding on. Your message needs to match what people are searching for.
I know what you're probably thinking now. You're probably telling yourself "This Marc's a nice guy. Ok, he got me to understand that THE thing to do to pay less, he got me to take a first step I didn't even think existed, but now I have to take the second step: I need to find out how to write a relevant ad."
Don't worry, this is why there is A series of posts about Google AdWords!
The good news is that Google is going to give you a tool for finding the right ad!
In the next post, we'll take a look at how to divide the price of your keywords by 2, 5, or even 10!
Till next time,
Marc
PS: Remember one thing: I said you were going to turn you time into gold. I didn't say that you won a lottery ticket. AdWords only rewards good old hard work!
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