Google AdWords – Can You Afford It?

As I speak with entrepreneurs about the most effective way to bring new qualified visitors to their websites,  the top question about AdWords I receive is around cost.

It seems at one time or another everyone has been burned with spending too much on advertising without seeing a return.

Having managed as much as $100,000 in Pay-Per-Click budgets per month, I can definitely see how it’s easy to “blow through” a few hundred or even a few thousand dollars on Google. And, I have also worked with clients who are spending as little as $10 a day on AdWords. In both cases, there was a strategy for selecting the budget, and more than one checkpoint to make sure the investment (whether $10 or $10,000) generates a return.

So instead of asking “Can I afford AdWords?” I suggest you ask yourself:

  • How many people are currently visiting my site per month?
  • How many visitors, leads, or sales per month do I want?
  • What is the main reason people are coming to my website? What can they buy, sign up for, or experience that will be of value to them?
  • How much is a new lead or customer worth to me? what is the average order size on my site?

These questions will help you get clear on your website strategy goals. For example, you may decide you need 500 additional unique visitors to come to your website every month, in order to reach your sales goals.

You will also know that for every 500 new unique visitors, for instance, you can expect $500 in sales. (this is just an example, your numbers will depend on your business).

Next step? Set your Google AdWords budget. You will probably want to at least break even on your AdWords campaign, so if you expect to make $500 back, I recommend you plan your budget to be under $500.

Armed with this information, you can log in to your Google AdWords account and put a few checks in place:

  • Your maximum pay-per-click bid should be at $1 or just above, on average. This way you can get 500 visitors (or “clicks”) for around $500.
  • You can also set your daily budget to around $18/day (which works out to approximately $500/month).
  • Set an End Date for your campaign (30 days out) so Google does not auto-renew on your behalf.
  • Install Google’s Conversion Tracking code on your website so you can track the sign-ups and sales your campaign generates.

Then, you can turn your campaign on and relax, knowing that you are in control of your AdWords spend.

At the end of the campaign, compare the actual results against your projections (500 visitors, $500) and adjust your future AdWords strategy accordingly.

There are many nuances to AdWords, and staying focused on your business will help you control your cost and ROI.

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