We all want our business to be the best. And it’s in our nature to think that first is the best position we should be aiming for. But when it comes to AdWords bidding, being number 1 is not necessarily going to be the most profitable option.
Let’s use the Estate Agency sector as an example. Selling and letting property is a highly competitive market. Traditional high street branches are being disrupted by online only models such as Purple Bricks, which have lower overheads and are in a better position to invest money into their digital marketing.
This means that the disruptors can buy the number 1 spot in Google AdWords and squeeze out the competition.
Estate agents need to have deep pockets if they want to compete. Companies bidding on property keywords related to ‘London’ could be paying in excess of £70 per click to be in first position. In comparison, the number 2 spot would cost less than £10 per click – a fraction of the cost. Maybe that number 1 position isn’t as desirable as you first thought, once the cold, hard economics kicks in.
What about performance? There is very little difference between the two positions. In terms of behaviour, when has it bothered you whether you are clicking on the first, second or third advert in Google? It’s not the position that sells but the offer that is enticing you to click.
Not being number 1 can actually cost you less and generate higher quality leads, provided you have properly planned out your campaign.
Business owners – and particularly those in highly competitive industries – should focus on ways of out-thinking their competitors rather than losing sleep and money over the top spot.
START WITH THE END IN MIND
If you’re already familiar with Fountain and our approach you’ll already know that nothing is more important than this when it comes to planning any Digital Marketing campaign.
‘I want more traffic to my website’ is not the question you should be asking. Your question should actually be ‘How much am I willing to spend in order to get one new paying customer?’. Reframing the problem by starting with your desired outcome means that when it comes to running your AdWords campaign you will know whether it is performing and, more importantly, if it is profitable.
When it comes to planning out how much to spend on your campaign you need to know the answers to the following questions:
- What is your cost per acquisition?
- What is your cost per click?
- What is your conversion rate required?
This framework will determine how much you need to spend on AdWords and therefore which keywords and position you will be competing for. In addition, if your boss is questioning why your business is not at the top these numbers will prove how profitable your campaign is.
If you aren’t familiar with these terms this article by Rachel Murray explains the 3 numbers that will make your Digital Marketing more profitable.
THINK LIKE YOUR CUSTOMER
Marketing isn’t done in silos. Your adverts and landing pages exist in an eco-system of other adverts and online activity, all of which are competing for attention. You need to understand your customer and make their interaction with your business as smooth as possible
Your copy needs to be simple, identifying how your product serves them. There needs to be a clear call to action, so that they are encouraged to take the next step. And ensure that any possible blockages to conversion are removed or reduced on your landing page. Something as simple as having one less field on a form can have increase the number of leads.
The only person that matters is your customer.
Don’t rest on your laurels. However well you have researched and planned your campaign, there will still be lessons to be learned once you go live. From the start of the campaign closely monitor performance and see how your customer interacts with your ads and landing page. A/B test different copy, imagery, headlines and even the call to action. Once you have a winner start on another test, and continually look for improvements.
HAVE THE HIGHEST CONVERTING WEBSITE IN YOUR INDUSTRY
There is no point in sending traffic to your website if it doesn’t convert. If you read Rachel’s post on 3 numbers that will make your Digital Marketing more profitable you will know that your Cost Per Acquisition, Cost Per Click and Conversion Rate Required are linked.
Increasing the Conversion Rate of your website will reduce your Cost Per Acquisition. Here is an example:
Conversion Rate CPA at £1.00 CPC CPA at £2.00 CPC
1% £100 £200
2% £50 £100
3% £33 £66
4% £25 £50
5% £20 £40
You should be thinking about conversion before you think about traffic.
Conversion Rate Optimisation is the most under-utilised tool in the marketing play book. With the top performing site in your industry you can buy all of the traffic.
- Conduct a gap analysis: look at who is competing already for the keywords that you are targeting. Then look at your landing page versus your competitors. Print out the core pages of your competitor websites and see what your competitors are doing. Spreadsheet the things that your competitors are doing to increase conversion.
- Look at previous website iterations: the Way Back Machine is an internet archive. You can use it to look at all the previous examples of a competitor website. You can also use a plug-in to see whether they have conducted any A/B testing. Use the data to guide your decision-making rather than just gut instinct.
GET SMART WITH KEYWORDS
High volume keywords can be expensive and often have a low conversion rate.
But, it’s not always obvious what the best keywords are for conversion.
People aren’t always that imaginative when it comes to searching online so starting with a broad range of search terms, and then focusing on the best performing, will give you a better chance of achieving your target Cost Per Acquisition.
Going back to my earlier point, you need to think like your customer. What will they be searching for? In terms of buying or renting houses the keywords you choose may be related to house prices, how to rent my house out, school catchment areas etc. For companies competing with large national brands you could go local and use your local knowledge to target lower volume keywords.
If you are competing with large companies for the number 1 spot in Google it’s time to re-think your strategy.
By bidding on the 2nd, 3rd or 4th positions in AdWords you could save yourself a significant amount of money. If you ensure that your ad copy and landing page are relevant, with a simple call to action, you can convert those lower costing clicks into genuine customer leads. When you have a campaign that works, and you have the highest converting website in your industry bringing the profit it, then it’s time to dial up your budget and let your business flourish.
24 July 2018
By Terri Westgate