Google AdWords – How It Works Presentation

How It Works - Google AdWords

This presentation was first given to local businesses based in Hampshire, UK in November 2015. Its aim being to raise awareness of Google AdWords, in terms of the possibilities, the pitfalls and some basic tips for anyone considering starting their own Google ads campaign.

The transcript from the video has been copied below. If you have any questions arising from this presentation, please get in touch. We're also running a Google Hangout on the 25th November 2015 to field any questions (see link after transcript).

Hi there. My name is Adrian Bold from Bold Internet. We’re a search engine marketing company based in the UK. I made this video to record a presentation that hopefully would give you some idea of how Google AdWords works and a few pointers hopefully that will set you off in the right direction. AdWords was started by Google back in 2000. It’s based on a pay per click model which basically means you only pay when somebody clicks on one of your adverts.
It’s completely flexible. You can actually set your own budget. It doesn’t matter if it’s a few pounds, a few dollars, whatever or whether you got hundreds to spend a day. Completely up to you with no requirements to spend a set limit in a monthly period. You can also set the amount that you're prepared to pay for a click. Clearly that term is determined to some extent behind your industry in terms of how competitive it is but you are in control of that.
It’s totally trackable. This is important. We see a lot of people advertising without implementing what we call conversion tracking. The tools are through either Google AdWords or through Google Analytics to set up so that you can record down to the keyword level how your campaigns are performing. That could be somebody signing up as a registration for a newsletter or whether somebody’s made a post on your site. It is all completely trackable.
It also accounts for the majority of Google’s revenue. To give you some idea back in 2014, the estimate is that Google’s revenue was $66 billion and 97% of that would’ve come from Google AdWords advertising. As with most things, there’s good news and a bad news stories to tell here when it comes to Google AdWords. The good news is, anyone can open an account. You log in, use a name and password, you create a billing information and you're up and running.
You don’t even need to activate a campaign to set up an account. You go in, get familiar, use some of the tools to do some research. You can do all that completely free. The bad news in this case is that not everyone should rush in and start advertising using AdWords. We sometimes see people that have had one of these 75 pound vouchers or whatever it might be. They’ve created a campaign. They spend some money and it didn’t work, or they perceived it didn’t work. The main thing there is that people rush in without implementing conversion tracking but also if you’ve already got traffic come into your website and you should know whether you have using something like Google Analytics.
If you're getting traffic come into your site from other channels, so let’s say for example organic search and it’s not working, the chances are if you pay for that traffic to come to your site, that also won't work. it’s worth understanding how people already are engaging with your website, what they do, how they behave. It’s good to know that before you start spending more money.
Having said all that, let’s give you a quick overview of how AdWords is structured. There are two main streams. There’s search advertising for people going into Google and actually doing a search for something like a product or a service and then there’s display advertising which is where people have seen another website that are carrying adverts that are fed by Google and they respond to that so they click on a banner or a text advert, whatever that might be and they come to your website.
There’s also shopping campaigns. If you're a retailer, you’ve got an online store, you're going to want to set up a Google Merchant Centre and upload your products, your inventory to there and then connect to your Merchant Centre to AdWords and then you can get your products shown in the shopping channel. There’s also video. Of course, Google own You Tube, the second largest search engine in the world, and those videos can be promoted with adverts as well using Google AdWords.
Then finally there’s remarketing which is a strand that runs throughout a search display shopping where you can actually promote your products, your adverts in other words to a specific audience that has been created by you using again either AdWords or Google Analytics. It might be somebody who’s visited a certain page on your site or somebody’s made a purchase or somebody that abandoned a basket.
Whatever it is, we can remarket to those people subsequently again using AdWords. Let’s cover some basic terminology before we enter into too much detail. In the very top level, we have an account. An account is where you've locked in your details and you create billing information. It’s also where you can control access to your accounts. If you work and you use a 3rd party such as Bold Internet, we would request permission to access your account and you grant permission but you always retain control. Please never give up your username and password to a 3rd party. There’s no need.
We have campaigns. Campaigns are responsible for setting the budget, how much we’re going to spend. They can also be responsible for setting geo-targeting, the area you want have your efforts seen in and also things such as ad scheduling. Do we want to go Monday to Friday or seven days a week or certain hours of the day? Within campaigns, we have ad groups. This is where we start getting really granular now. An ad group is made up of adverts and keywords that link to a relevant landing page and the tip here is that you need to be tightly related, tightly themed around this object. We have impressions. An impression is simply a view of your adverts.
When advert is seen, that is classed as an impression. It doesn’t cost you. Unless it’s display it can cost you but in search it certainly doesn’t. Then you have clicks. This is where you start paying money, spending money with Google. A click is over somebody’s click to an advert and arrived at your landing page or website in other words. Then we have click through rate. We refer to it obviously as CTR. We are very fond of acronyms in this industry.
CTR is simply your clicks divided by your impressions represented as a percentage and the basic tip is we want to get our CTR as high as possible to demonstrate our relevance. Of course, there’s no point having a high CTR if you're not converting but that is one of the measurements we tend to go for. We then have our cost per click or CPC. There’s actually two CPC’s that we refer to. There’s the default bit in that and then there’s the actual CPC that you pay.
As an example, that could be you are prepared to pay a pound for a click on an advert but the person who is also advertising that keyword is only prepared to pay 50p so the person below you is bidding less. You'll only pay a penny more, 51 pence in that example.
Conversions; really, really important. You don’t start advertising without creating conversion tracking. Basically it is reflected as a number of times that a successful transaction has occurred, whether that’s a purchase or a registration or assigning opposite lead on your website. Then finally, there’s keywords. Keywords we’ll only go into a bit more detail because this really is important that you understand how they work. Keywords are the bedrock of building a successful advertising campaign. What we mean by that is we really need to take the time to carry out research into what it is you're trying to promote. Google’s got its own keyword planning so there are 3rd party tools.
It’s important you do research and understand how people are currently searching for your products or services. You also need to understand keyword match types and in Google, we have this concept of match types and basically what it means is the first one is broad. One of the common mistakes people make, they don’t understand match types as they go with broad match and they spend a lot of money very quickly and they're not sure why.
The reason why is, typically, because with broad match keywords, you basically assign to Google these keywords can appear in any order but they can also be replaced with synonyms, words that Google’s system says are similar. Misspellings as well and plurals and all those factors will come in but basically they're very loose and not really to be used on any account unless it has been very well optimised with other factors that we’ll come onto.
A couple of years ago, a few years ago now, Google recognised that and they came out with what’s called a modified broad match keyword. Basically a word that would be prefixed with a plus sign and that you're telling Google there do not swap out with synonyms. Those words can still appear in any order but at least we know that they won't be swapped out.
Then we go on to what’s called phrase match. The next level of control. What that basically means is those words that we’re bidding on a phrase like “colour television.” Colour television would need to stay in order but it can be part of a longer search string. It might be Sony colour television or Toshiba colour television, that sort of thing. So again, you still need to do your research but you have a fair more amount of control.
Then we go on to exact. As the name suggests, that’s it. They’ve always been on colour television, that’s the only phrase for which my advert would appear. Now if you're starting out as a novice advertiser, that would give you the tightest level of control. Conversely, gives you the most restrictions so you'll be missing opportunities but it might be if you're in a very specific niche and you know exactly the phrases that your prospects would use to find you, start with exact match.
Now, we then have negative keywords. Negatives are to be used on all AdWords but basically the looser you guess, if you're using broad match or modified broad match, they're absolutely essentially but even with phrase match, it’s important we have negative keywords. What it means, they're basically words that we use to stop your adverts showing for irrelevant search queries. Let’s have a look at negative keywords in a little bit more detail. First of all, we connect the campaign level or an ad group level or even now we’ve got the ability to create what’s called a list, a negative keyword list in a shared library which means we can apply those keywords across multiple campaigns.
They're very often underused. One of the biggest failings I've seen when I'm asked to review AdWords accounts is often people that have set up an account on their own are completely oblivious to the idea of negative keywords. Let’s face it, why would anybody be aware of negative keywords? They’ll often be bidding on words or phrases, worst case scenario broad match keywords without any negatives to stop it. Basically, the advert is being show all over the place for all sorts of terms and that’s where the money gets drained.
What we tend to do is we do proactive keyword research upfront. We use Google’s Keyword Planner tool plus 3rd party tools to look at the phrases that people are using to find your type of product or service and then we’ll identify which ones are positive and which ones are negative. Then the negatives go into the account to stop the adverts appear in irrelevant terms.
We also do it retrospectively where we would look back on a daily or weekly basis, whatever it might be to see the searches that are happening on your account where you incur cost and then we go back in and try to identify which of those are negative, which are positive, and where it’s negative. Take the relevant words or phrases or the negative words and phrases out and add those back into accounts.
Over time, you can end up with hundreds if not thousands of negative keywords so you that your advert, as much as can be determined is only being shown at the relevant time to relevant searches. What we’re going to do now, we’re going to go on and do a search using Google, an imaginary search. Let’s just say in this example, I'm going to do search for the word printers. A single keyword, very generic and what could happen? In this example, somebody has searched for the word ‘printers’. As you see, this was done in 2015. You can see at the top of the screen, there are three ads. We got the advert and then we got the advert from HP and then we got somebody else doing reviews.
We got somebody that’s offering printing services. We got somebody that is a company that’s offering printers, as in the physical printers and then we got another site that’s advertising reviews. I don’t know if these accounts were working really well but what I do know is I very rarely see AdWords accounts working well where you are bidding on a single keyword. You'd have to be in a really, really niche sector for that to happen. Either that or you’ve got a lot of money to spend!
We can obviously where we got over on the right-hand side, you got pictures of printers that are being fed by Google shopping campaigns and then we got the organics listing and then some local sites further on down. There’s an example of AdWords based on a single keyword. Now, to just give you some context around this specific example and of course you have to be careful what you bid on.
To give some example, this is the Keyword Planner tool. Anybody’s who’s got an AdWords account has access to this under the talks menu. Here we’ve looked at the word ‘printers’ and we can see that just in the UK, it is estimated that there are 33,100 average monthly searches for that word, the word ‘printers’. Now although I skipped over it, the competition you can see there is high and I think the estimated cost for this particular example is 77 pence. You are bidding on a single keyword ‘printers’ and you haven't done the negative keyword research, etc., etc., your cost could soon mount on top. What I would do, is I would go a bit further and really try to understand the scenario and in this scenario less that we’re representing a printing company based in Hampshire.
One of the searches I might do is to look for Hampshire printers. Just add a bit of location reference there. Now here, over on the one hand side, you'll see it suggesting that we add 313. 313 what? These are all different keywords or phrases but Google is suggesting that are relevant to the phrase Hampshire Printers and here’s some examples, ‘printers in Southampton’, ‘Hampshire Printing Services’. You can see. Now clearly, the average monthly searches goes down dramatically for those phrases and the cost per clicks go up because we’re getting more relevant.
If you were a printing company based in Hampshire, this is the level of detail you would need to go to, to make it work for you. We’ve covered very quickly search advertising. Now I want to just give you an overview of display advertising. Again as a recap, this is where people have opted into Google’s AdSense program. They do a revenue share with Google so that they can display adverts on their websites.
In the same way that we have a Keyword Planner tool within the AdWords account area, you’ve also got the Display Planner tool. Now in this example, let’s say we’re representing a company that sells wedding stationery. One of the phrases we've done there is we’ve searched for wedding stationery. Again just for the UK market and it tells us there are 50 million to 100 million cookies basically. A cookie is basically used to record a visitor but, of course, Google recognises that devices, laptops, tablets, whatever are shared amongst family members. They now refer to those cookies but basically there’s a lot of inventory, to use their terminology, available on which to show your adverts.
Now, as with broad match keywords, just because there’s a lot, it doesn’t mean that’s a good thing. What we try to do and I'll show you some of the options later on is we try to identify relevant places to advertise our site. In this example, one that stood out to me, there’s a site there called “You and Your Wedding,” with 50-100,000 cookies per week. They're getting a lot of visitors and they seem relevant to the subject matter. In this instance, we might even go and have a look at the website. You’ll also see here under the individual targeting options that site there shows you the relevance of it and it also shows you other examples.
Again, if you're spending money on advertising, you may well want to go and visit those sites to think is it relevant to you and your sector? Is this somewhere where you'd want your brand represented? (We already covered up to 274 sites. Basically there’s a lot there). Now this is the example I was talking about just now with “You and Your Wedding,” and specifically a page that’s dedicated to wedding planning and stationery.
Now here we’ve got an advert for United Airlines. Chances are maybe I'm being remarketed to, I don’t know. There was an advert there for United Airlines but that could equally be an advert for somebody that’s selling a wedding stationery business. Not selling the business but selling the service of supplying wedding stationery and that could be an advert appearing on this page from a site that is relevant is receiving a lot of visits. There’s quite a lot of scope there but also needs quite a lot of research to get setup correctly in the first place.
When it comes to display and advertising, the equivalent with search advertising is when we talked about keyword match types in terms of getting tighter control, with display. What we have here are a number of options from targeting. There’s lots of options basically. We got here, we can advertise just on keywords. That’s where we’re trying to find keywords on a page. That will tell Google that, in theory, our advert is relevant to be displayed on that page, all those placements as in the previous example.
We can just target individual websites or even individual pages within a website. Then there’s topics. I don’t know if there’s a topic around weddings. I'd be amazed if there isn’t but there are hundreds of different topics that we can target our adverts to. Interests and remarketing with interest groups of people that have expressed interest in the subject matter.
Remarketing, we’ve already touched upon our audiences of data that we’ve gathered through out of the AdWords tag or through Google Analytics. Then there’s demographics, male/female, different age ranges, that type of thing. all of those can be used in isolation or better still they can be layered so you can get a very tight level of control over the type of audience that you would like to see your advert.
I just want to wrap up this presentation. I'm going to leave you just a few tips so that if you do go away and decide to build your own Google AdWords campaigns, at least hopefully these tips will set you on the right course. I must stress there are numerous resources out there. Google’s got a very good help section. This is just a few basic pointers, if nothing else. First of all, already mentioned it, make sure you use conversion tracking. Please do not spend money advertising if you haven't implemented some form of conversion tracking that will let you at least see where your money is being spent, hopefully successfully, and you can see which keywords are generating more business for you and which are just draining your budget.
Keep search and display campaign separate. They function in fundamentally different ways. People going on to search on Google and looking for your product or your services function in a different way to someone that happens to be on a website that sees an advert and then clicks on that advert almost randomly. Hopefully with the targeting options, they are relevant to your business but nevertheless they should be kept separate because the campaign stats, things like click-through rates, cost per clicks, those sort of things are different.
Make sure that you direct visitors to the most relevant part of your website. Particularly with search, we talked about creating Ad Groups with target themed adverts and keywords. They have got to work hand in glove with your landing page. There’s no point sending all of your traffic to your homepage and hoping people will search your site; they won't! Take people to the most relevant part.
Then finally, we’ve already touched upon keywords. I've done another video in the past where I go into Google AdWords match types in more detail. If you don’t understand AdWords match types, please don’t start advertising. If you haven't carried out your keyword research, you're likely to fail because your chances are, you're going to be bidding on a handful of keywords that pop into your head and they may be relevant to your business but they may not be totally relevant enough to make it work for you.
I gave the example earlier about the keyword ‘printers’. The average search string now is probably about five or six words. People very rarely buy on a one or two-word phrase search. Often they might start with a two word phrase search, realise it’s not relevant enough for what they're looking for and they’ll go back into a three or a four or a five word phrase match search and it’s those people that you want to be showing your advert to increase your chances of success.
I hope this helps in terms of giving an overview. If there are any questions of course, please just get in touch. We’re not a high-pressure sales company. We like to have conversations with people just to see if we can help. If we can work with you, that’d be great but if not, more than happy to field any questions.
Thank you very much for watching and good luck.

AdWords Overview Presentation

AdWords HOA

As mentioned above, on the 25 November 2015, we did a Google Hangout (HOA) to address any questions that may have arisen from this presentation as well as going into a bit more detail on some of the key points. You can watch the recording of that conversation here.

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