I wrote this article a few years back after picking up a key insight into optimising Google Adwords campaigns. It still applies today. Here it is, for all customers who run their own Adwords:

I recently had a client who we were running a large Google Adwords campaign for where the client had an abundance of different categories and words which we were targetting their ads at. We had done broad keyword research, setup around 17 categories with ads all worded and targetted at these categories. The client was spending around $100 per day on adwords and we were easily filling this my mid morning as the breadth of their keyword list and categories was huge, and some of the terms being targetted were quite broad also (this customer was targetting the home improvement market – with a consumer audience).

Ok, on to the point: The client pressed me to experiment with a drastically lower CPC than we were using. We were targetting positions 2 – 4 on average and paying around $0.50 – $0.60 per click for website visitors, and it was converting nicely at around 28% (their conversion actions were fairly easy for users to take hence the high conversion ratios). I was convinced based on various prior experiences that lowering the CPC, would of course lower the ad position, and that with less people seeing the ads, and seeing them buried down a long list of advertisements, the conversion ratios would surely plummet and the overall cost / conversion would go up – making their campaign less effective.

Boy was I wrong!

OK – so there was a drop in conversions, but it didn’t go from 28% –> 5% or even 28% –> 15%….their conversion ratios only dropped a little to around 25%. Their cost per click however COLLAPSED!! They went from paying around $0.55c on average per visitor to paying around 0.25c per visitor, and with conversions holding their ground, their cost / conversion also COLLAPSED!

The results:
a) Visitor traffic doubled.
b) Cost per conversion almost halved.
c) Volume of conversions per day doubled!

The moral of the story:

While the client was spending a lot of money on adwords, I should make it clear from the start, that this approach really works best where you have a limited daily budget to spend on Adwords each day / month and which is being easily filled each day by clicks. If you have a very small but lucrative market you are trying to reach, and a big budget, you may be in a situation where you are bidding big prices in order to win the clicks of a small group of people, so lowering your cost per click (and ad positionining) in this scenario may not make sense.

IF however you have a very broad keyword inventory, and you’re easily filling your daily click budget – I would strongly encourage you to do the following:

1. Download the adwords editor from Google which can be found here
2. Copy and paste the campaign or campaigns you are running and create a LowCPC variant of these which you can run side by side with the higher CPC campaign.
3. Lower your bid prices – halve them, go even further…..drop them to the minimum bids.
4. Sit back and watch carefully.

If you have your conversion tracking setup properly, then you should be able to clearly observe the variation in conversion %. From my experience now in trialling this approach for over 6 clients in the last few months, I predict that you will see a lowering in conversion, but in most cases not as far as you think and you will likely also see a drastic increase in the visitors, and conversions you are achieving within your limited budget. If you suddenly find you are underspending you daily click budget, then perhaps tune up the Max CPC / bid a little until you comfortably fill your budget, and observe the change in cost per conversions.

if you are in the situation described above, where you have a small budget you are spending Google Adwords each month, and a broad market you are targetting, this is highly likely to drammatically improve your return on ad spend, and potentially transform Google adwords as a channel to market for your business.

Clicks achieved in lower ad positions don’t necessarily convert at a lower rate!! As with everything in online advertising….don’t hold on to past prejudices about what you think works – just try it out and see what happens!

This article, was written by Phil Baddock, Salsa Internet’s Search Marketing Director. If any of this didn’t make sense, or if you need help doubling your sales with Google Adwords, Phil can be contacted on phil@salsainternet.com.au.

First thing to mention, is that it’s not often I see a business succeed with little or no money invested to get things started.  However it usually takes someone at least one try to learn this truth – and hopefully this Blog post will help save some time and pain in that learning process.

I always recommend engaging a professional agency (like us) to help execute a web project, as it’s often an important part of getting a new business up and running successfully.  This article is aimed at those that don’t want to spend that sort of money, and instead are looking for a cheap & nasty solution to help get them started.  Salsa doesn’t provide these services, but here is what we’ve learnt over the years.

Sorry I know it sounds cynical.

Once you’ve taken care of the paperwork (register a business name – https://online.justice.vic.gov.au/cav/br-home, and register your domain name – Google “cheap domain names”), you need to get a website built.

If you have $1,000 – $2,000 to spend on a website.

The cheapest way to get this done is to use a pre-existing Content Management System (CMS) such as WordPress, or Joomla, or Magento or OSCommerce for an eCommerce website.  You should then look to download free, or buy a template for the site, instead of paying for a custom design.

Some places to get templates from:

WordPress – http://wordpress.org/extend/themes/

Joomla – http://www.joomlashack.com/

Magento – http://www.silverthemes.com/

www.templatemonster.com is also a source of hundreds of themes, but the quality is inconsistent.

Once this is done, you need to then get someone to build it for you.  www.nachomedia.com.au can help put together a template website at low cost.  Or if you know a freelance developer, have them do it for you – should be around $1,000 for a WordPress/Joomla site, and $2,000 for an Magento/OSCommerce site.

They can probably help you with hosting also.

Credibility is important – so perhaps set up a 1300 number if you can – and have it direct to your mobile phone or land line – makes you look more professional, and doesn’t cost much.

If you have nothing to spend on a website!

Try setting up a Facebook page.  It costs nothing. See this post on how to do that: http://lazarus.salsainternet.com.au/2010/06/howwhy-to-create-a-facebook-page/

Take a look at Twitter also, if you have the time.

You can also redirect your domain name to your facebook page if you want to advertise the domain name, instead of the facebook page in your marketing collateral.

Get people to find you.

Once you’ve setup some sort of online presence as above, people need to find it.  To be honest, this is often the hardest part.

First, you should run a Google Adwords campaign (ads on the right side of a Google search results screen), as this is relatively low cost, and works instantly – you can setup a campaign, and get it running in a couple of hours – gets traffic to your site immediately.  You can check keywords, etc  at https://adwords.google.com/select/KeywordToolExternal

You can also read about how to setup a campaign here: http://www.salsainternet.com.au/adwords-explained.html

Once you’ve proven the model works online, you can start to work on getting the site to rank well in the free/organic listings in Google (left side of Google search results screen).  There are 3 things that make this work – Structure, Content & Links. More info on how this works here: http://www.salsainternet.com.au/search-engine-optimisation.html

You also want to put your web address on your business card, flyers, email signature, etc to help get the word out.

As mentioned, this approach in my opinion is speculative at best, but costs very little, so maybe it’s worth a shot for those that haven’t tried before.

Good luck!