When you're putting aside budget each month to spend on a Google AdWords campaign, you're always hoping to see a positive return on investment. The aim of the game is to get more money out than you're putting in but there are countless variables that can affect the outcome of your campaign.

In this article we demystify the process and take the guess work out of using Google AdWords. Put yourself on the right track to making your investment a good one with our simple 12 step process that can help you make money with AdWords.

1. Spend money to make money.

As the old adage goes, "you need to spend money to make money" and if you're looking at AdWords then you already know this is true. Not everyone has tens of thousands of dollars in budget to spend on a Google AdWords campaign each month and potential clients will often approach us with "how much does AdWords cost" but it all boils down to one question: "How much business do you need per month to make your business profitable?"

Let's say you're in the wedding decoration industry and you need to convert three enquiries per month to keep the business running. A proposed spending budget of $2,000 per month would cover the cost of your keywords at roughly $64.51 a day. Jumping straight into the deep-end for a whole month may not be possible but putting any less could mean your ad spend will be gone before 9 AM! If you can't afford the cost for a whole month, you can trying breaking it down into a single $450 week. It may not drive enough enquiries for the amount you have to spend, but it will give you a good amount of data across all days of the week. This data can be of great value to you as you discover what you can get for your dollar.


Source: Make Money in Life

2. The formula

A campaign is profitable if the amount of money you spend directly through AdWords translates to a greater amount of money received through your offered services. Continuing with our wedding industry example, if we price a standard wedding at a cost between $16,000 -- $25,000, this is how it could go:

With the data gained after a one week trial of $450, we've established that there is a conversion rate of 1.7%. The $2,000 per month spending is projected to bring approximately 500 clicks that converts into 8.5 enquiries per month. It is then the business' goal to convert these eight enquiries into three jobs.

The cost per enquiry is now estimated at $235.29 which makes spending $2,000 on Adwords profitable exercise as it is bringing in $45,000 profit from three jobs per month.

3. Campaign setup and bid strategy

The campaign setup is how we would like the monthly reporting to look like. It should be setup in such a way where we can pause an Ad group without affecting the performance of the whole campaign. Segmenting the ads by services and location is a good way to start.

A mistake lots of new AdWords users do is to setup a campaign with 'Broad Keyword Match'. These broad keywords are very expensive and yield lower results - this will chew through most of your budget with minimal outcomes.

Your keyword bidding strategy can be setup either on automatic bidding or manual. Some keywords are more competitive than others, and this will take a little while to find out.

We have to keep in mind that your competition may be monitoring your activity closely and will counterbid some of your keywords, especially if they are converting very well.

4. Automatic bid adjustments for maximum reach

Competition is often higher during the peak times of day such as the lunch break which corresponds with more expensive keyword bids. We suggest trying to tap into smaller market segments for competition is lower but offers a greater return on investment.

For example, some users may not have enough time to browser during lunch and after dinner, but they may be doing research before bed or early morning at 5AM. Reducing your bids during the day and only focusing on the night time traffic can produce more cost effective results.

6. Location targeting

If you want to make money with AdWords, you'll want to eliminate any unnecessary spending on when you know you can't convert. In our example, let's say the wedding company operates from Perth Metro to Margaret River, so anyone inquiring outside these areas would represent wasted budget.

Google AdWords will let you refine your location targeting through optimisation of country, city, region or postcode. Be as accurate as possible with your audience filtering to avoid wasting budget on unnecessary users.

7. Conversion optimisation

Simply put, keywords with no historical data of converting are more likely not to.

There is now an option in AdWords to "Focus on conversions" using CPA bids (Cost per acquisition) but this can become a very expensive setup that chews through most of your budget. Make sure the advertisements and the keywords are highly relevant to the AdWords campaigns you are running.

The landing page also plays a big role in the conversion rate and should be heavily optimised for the best results. You want users to leave a name and email for you to contact so make it as easy as possible for them to do so.

8. Branding positioning

As sneaky as it sounds, you want to target some of your direct competitors and make sure your ads are sitting next to theirs in the SERP (Search Engine Results Page). If this particular competitor is killing the monthly sales and attracting lots of interest online, you can create your Adwords campaign in a way where the name of your company is positioned next to theirs.

In this case we are not aiming for higher conversions but greater impressions. At some point, users will become more familiar with your company name so when they see your advertising elsewhere they may then convert at this later time.

10. Negative keywords

When adding keywords to any campaign, it is an absolute must to have their respective negative keywords added. There is a list of "must be added" keywords such as; free, cheap, nude or torrents - the list is long but you get the idea. You're not going to make money with AdWords if people are searching for "free" services.

If you're in the industry of wedding decoration then you may want to include related negative keywords such as 'civil wedding services'.

11. Remarketing using display advertising

Remarketing is a great way to track back users that have already looked through your website. They are genuinely interested in your offerings but possibly haven't converted due to external distractions or time requirements. With remarketing, you can leave 'cookies' on your visitors computers so once they visit your website, you can track them across other websites with display advertising.

Source: 360 PSG

12. Reporting using multi-channel funnel

This is the cherry on top of the reporting cake. The multi-channel funnel tool in Google Analytics allows us to track the movements of our users. You will be able to find out how your advertising cross-platform works.

A user could have clicked on paid advertising at one point, then came back to the site organically at another time but still didn't convert. After browsing another site and seeing your display advertising image, they then clicked on it and landed on a dedicated landing page where they finally converted.

While you can monitor your spend across different platforms, multi-channel funnel reporting in Google Analytics allows you to see where another medium has played a key role in conversion.

Source: Tentacle Inbound


At the end of the day, pay per click management is a numbers game and with the tools available, you can make the numbers work for you. If you want to make money with AdWords but you're having trouble getting it off the ground, try these steps above.

We wish you the best of luck!

Bam Creative offers pay per click advertising services that can help you take a profitable share of the market. Let's get talking!