Google's net income for 2016 increased by 19% to $19.5 billion. For many years, the main source of income for the company has been contextual advertising on a network of its own and partner sites.
Contextual advertising Google Adwords without a doubt is one of the most popular ways to attract customers to the site, especially for online stores. And such incredible amounts of profits for Google Corporation are only possible because advertisers highly value the advertising capabilities of Adwords and invest a significant part of their marketing budgets in this advertising service.
But the popularity and availability of such a tool leads to the fact that in many niches competition between advertisers is increasing. And since contextual advertising is built on the principle of an auction, following the growth of competition from year to year, in almost every field of activity, the cost of a click also grows.
Regardless of the state of the economy, the ever-increasing cost of a click will sooner or later eat into the profits of any company. This is what happens in many businesses. As a result, the profits of site owners are declining, while the profits of Google Inc. are growing.
The StarMarketing team has been working with Google Adwords on a daily basis for more than 7 years. Every day we optimize dozens of accounts, thousands of campaigns and ad groups, hundreds of thousands of keywords. During this time we have accumulated enough experience, knowledge and expertise.
In addition to being an official Google Adwords Certified Partner, our team has also become a Google Analytics Certified Partner. This certificate confirms that Starmarketing clients receive not only well-tuned contextual advertising, but also professionally configured analytics for all important KPIs to track the results of the advertising itself.
Recently, site owners have been increasingly contacting us regarding the audit of their advertising account in Google Adwords. We have conducted hundreds of audits of various advertising accounts, both from freelancers and from top agencies in Ukraine and other countries. And what we found shocked us greatly.
It turns out that the real reason for the decline in profits in many businesses is not at all increased competition, not a decrease in purchasing power, not a collapse in the exchange rate of the national currency. Although these reasons have an impact on the profitability of advertising, but this is not the main thing.
The real reason is the lack of professionalism and ignorance of the possibilities of contextual advertising by many specialists in contextual advertising. In how mindlessly responsible advertising professionals leak their clients' marketing budgets into context.
And these are not unfounded statements. All this is based on our considerable experience. After all, what does an inexperienced specialist do when a customer requires him to increase sales? That's right, it goes the simplest way - it increases the cost of a click, which leads to an unjustified increase in the cost of an attracted client.
According to our calculations, on average between 20% and 60% of Adwords spending is wasted.
Such misuse of the advertising budget often results in advertisers suffering such losses in the first months of advertising, from which not every business will be able to get out.
Google Adwords is undoubtedly an incredibly powerful sales tool that is unmatched in the entire advertising world. But you have to be able to work with him.
Let's look at the most popular mistakes that most often lead to misuse of the advertising budget. Let's start in order with the most important mistakes that we have identified over 7 years of intensive work with Google Adwords contextual advertising.
1. Low number of points of interaction with the target audience.
In highly competitive niches, a large number of advertisers leads to an overabundance of advertising, which leads to information overload and the effect of advertising noise. This means that there are so many advertisements that it is very difficult for the average potential client to absorb anything among them at all.
On the other hand, potential customers gain experience by using previous versions of products (such as in the niches of computers, mobile phones, home appliances) or due to the availability of articles and reviews on the Internet about any product of interest. This is the reason why people are becoming more demanding and looking at offers on more than one site before buying.
As a result, it is not enough for an advertiser to appear to a potential client once in order to successfully convert such a user into a purchase. The average number of such interactions in competitive niches grows to 7 or 10. The more diverse this interaction is and the more targeted the advertising message is, the higher the probability of a successful purchase by a user from your target audience.
Based on this popular mistake, we come to the conclusion that when planning advertising, it is necessary to consider how the total number of touchpoints (or the number of “touches”) can be brought up to at least 7.
So we came close to the second most important and most popular mistake.
2. Not using all the effective features of Google Adwords.
From what we can see, most of the advertising strategies in Adwords are very superficial and stupidly simple, like memes in classmates. The meaning of such strategies lies in the maximum position on Google search for all thematic keywords and "nightmare" site visitors with their banner remarketing.
We single out the following very important advertising tools in Adwords:
- advertising on the Google Search page
- remarketing on the Google Search page (to those who have already been on the site)
- banner ads on the display
- banner remarketing in the display network
- advertising in Gmail (the attractiveness of this type of advertising increased after all Russian mail services were blocked in Ukraine and a considerable part of people switched to using Gmail)
- video ads (mainly on YouTube)
- video remarketing (mainly on YouTube)
- displaying ads on different devices - computers, tablets, phones (even showing the same banner or video to the same user on different devices, you achieve a different memorability effect due to different circumstances in which each device is used)
- dynamic remarketing for online stores and other e-commerce projects
To this should be added some more special features of advertising.
By targeting certain keywords on Search and Display Networks, you can target early decision makers, decision makers in the final decision making process, and your competitors' customers.
With the help of remarketing on Search, you can be shown to a site visitor for a variety of queries.
For example, imagine that you are selling apartments in a new residential complex in Sofiyivska Borshchagovka and use Google Adwords to attract new customers. But you have a very competitive topic and one click from Google Search costs an average of 30 to 70 hryvnia. Advertising around the clock for all requests is extremely expensive and there will not be enough budgets.
Therefore, an excellent strategy would be to show the most targeted and “delicious” queries, for example, “buy an apartment in a new building sofiyivska borshchagovka”, around the clock to all users. And for such queries as “new buildings in kiev”, “apartments from the developer kiev”, for which clicks are much more expensive and there are more non-target people, they will be shown only to those who have already been on your site and return your visitor to you by adding another point of interaction with this user.
If you use all the features of Google Adwords listed above in your advertising, then you will significantly increase the number of “touches” from your target audience, which will undoubtedly lead to an increase in sales and a decrease in the average cost per conversion.
And from search remarketing, let's move on to banner remarketing in the Display Network, or the third popular mistake in Adwords.
3. Poorly configured and unbalanced display banner remarketing.
Have you ever experienced situations where you were followed by annoying advertisements for a product that you already bought or no longer needed? I'm sure not even once.
Such excessive and unbalanced banner advertising in remarketing leads not only to a large overspending of money, but also to the loss of those sales that you could get if you directed these funds to a more “hot” audience.
Will explain. The error in setting up remarketing lies in the fact that most specialists set up remarketing in a very unpretentious way - they collect an audience of all site visitors and target ads to them, showing ads over 10 times a day to a unique user for 30-60 days without reducing the frequency of display.
About 5-6 years ago, when remarketing cost a penny, it could still work. But now this strategy is very unprofitable and leads to losses.
In most segments, the decision-making and reflection cycle can be several days or even weeks. But despite this, according to Google Analytics statistics, after going to the site 60-70%, those who are ready to buy make a purchase on the same day of the visit. More than a day, usually 4-6% visitors are needed, 2 days already 2-3% users are needed, and so on in descending order.
The key for us is the fact that the more days have passed since the last visit, the less likely it is to buy from that visitor. This undeniable fact is confirmed by the screenshot from the analytics below. Note that in this example, just over 64% purchases (nearly 8,000) were completed on the day of the first visit to the site. The rest of the buyers need more than one day from the moment they visit your site to make a decision. Moreover, a falling trend is noticeable in the share of sales among these users over time.
And if you show remarketing ads equally often to all site visitors within 30 days of their visit, then you are unreasonably draining some of your money on those who most likely will not buy anything anyway.
An effective remarketing setup is to properly reduce the frequency of impressions over time. That is, in the first few days after visiting the site, you need to be shown more actively. Then, after 3-5 days, the frequency of impressions should be reduced. If in the first days the average frequency of impressions can be more than 5 per day per user. Then after 2 weeks it makes sense to show up no more than 1 time per day. And after 30 days - just 1-2 times a week, as if unobtrusively reminding the departed visitor to your site "If you still need our products or services, then we are here, just click on this ad."
Article author: Vlad Sidnev