Setting Up Google Adwords - Standard Edition

The initial setup for the standard edition is very much the same with 2 key differences.   During the stage at which you setup your target area you can define your advertising to work in an area defined by a map point (i.e. 10 miles from XYZ).   If you want to laser target your audience this is useful.  The second key difference is that you can actually define how you want to spend your budget.

The key difference is you will define how much you are prepared to pay per click during the setup phase.  The way that pricing works in Adwords is that it’s a competitive auction, the more people that are competing for a keyword the more expensive it is.  Which if you think about it makes perfect sense.  Let’s imagine another scenario (using the example of what is a very expensive keyword), DUI lawyer.  Now, because the lawyer knows a potential client could spend many thousands of dollars, he’s prepared to pay quite a lot for a potential lead.  So the actual process is as follows.  Let’s say he needs to pay $10 for each visitor and let’s say from every 20 visitors he gets an enquiry (remember, it’s a very targeted keyword so people searching for it are likely to have some interest in getting a lawyer).  So each enquiry costs him $200.  Now, let’s say he turns one in 5 enquires into a client.  So each new client costs him $1000.  Now that sounds like a lot of money, but assume each clients spends $10,000 in fees – that doesn’t sound like such a bad deal.

Each business will have different costs per acquisition of a new customer.  So for example, in a plumbing business it might cost you 50 cents per visitor and you might get an enquiry for every 20 visitors.  So each enquiry is costing you $10.  Now if you convert a high percentage of these enquiries and again you should because these users are looking for what you do, then you will eventually start getting a feeling for how much each customer costs you.  What you need to add to the mix is the lifetime value of each customer.  So, I call you up because I’ve got a problem with my plumbing and on the first visit you are going to have to offset the cost of acquiring me as a customer against your charge.  However, if we start a business relationship and next time I have a problem I call you again – then you’ve now potentially got a customer for life.  If you’re in a business where there is a potential for repeat business then you should factor this in to what you consider a reasonable cost per new customer is.

Hopefully, you can see that you owe it to your business to setup an automated customer generation machine.  If you were reading this 5 years ago, it would be more reasonable for you to feel that this was a pie in the sky concept.  Adwords is now a proven system and it explains why Google is the largest brand in the world that helps businesses of all kinds to find people looking for what they offer.  You’ll probably find that your competitors are already doing this, but in any event better to join the party late than not at all.

What you waiting for, do something good for your business today and your business will do something good for you.