One of the most powerful and useful advertising mediums available for the average business owner today is Google AdWords.  Why?  Before someone looks through a phone book to find a plumber, they are more than likely going to ‘google it’ on their smart phone, or iPad, Laptop or Desktop, or whatever Internet connected device is nearby and whoever comes up near the top and fits what they are looking for is probably going to get the call.

Increasingly in the local market.

Because of this fact, that I hereby decree Search Engine Marketing to be absolutely the best place your advertising dollar can be spent these days.  Period.

Now, I don’t like to include too many overly sappy superlatives when I write for HalMarketing, but seriously, let’s look at a few statistics that my friends over at KoMarketing Associates gathered recently that will back up that last sentence.

1.  The top spot on Google drives as much as 34.5% of all traffic for a particular search term.  That means that if you add up all the traffic from results 5 through 20 of a Google search, that will equal the same number of traffic as the single link in the top spot.  It’s a great example of nature’s 80/20 rule in effect.

2.  Google regularly accounts for nearly 70% of all search traffic in North America according to Market Research giant Comscore.  Of course this means the other major players in the search market, Yahoo! and Bing are both little fish in the growing pond of Internet search now.

3.  The Digital Marketing Association reports that nearly 4% of all traffic generated through paid search results in a ‘conversion’ or a sale.  Which is obviously why smart companies are spending money on it…

But let’s pause here on this statistic: 4% seems kind of low doesn’t it?

I mean, let’s look at your own numbers for a second.  Pick up a calculator real quick and let’s take a good hard look at your business… what advertising medium do you have that converts 4% to customers or sales?

Or even better yet… how do you know that 4% is converting?

You see, there is no other medium other than digital marketing or more specifically, a medium like Google Adwords that allows you to track numbers like that.  How much did you spend on your Yellow Pages ad this year?  What percentage of people that saw your ad actually bought?  Wait… you don’t know?  Ok, fair enough, it’s impossible to track yellow pages ad conversions.  How about traditional broadcast media?  What percentage of people that heard your ad on the radio actually bought?  What?  You can’t measure that either??  Alright, last one… let’s talk about traditional print media.  What percentage of readers of your local newspaper read your ad and brought an order in?

Again, impossible to measure.

Well, I shouldn’t say they are impossible to measure… there are some creative ways to measure results from traditional media campaigns… using a ‘code word’ when a customer calls in to order, or having a special extension for a Yellow Page ad.  Business owners got smart on this long ago.  But they can only measure number of sales, they can’t measure what percentage of people heard the message.

It is impossible to measure my original question with traditional media: what percentage of people that hear or see your message are actually buying?

Unless you can measure the input, you can’t properly measure the output.  And unless you are doing digital marketing and or Pay Per Click you truly can’t measure the input.  You can only rely on pseudo-measurable statistics such as those produced by the Neilson ratings or your local newspapers ‘distribution’ (which, by the way, has absolutely nothing to do with the number of people that actually read your ad.

So… where does that leave you, my dear reader and business owner?

Well, let’s look at that last statistic a littler further.  On top of an average conversion rate of 4%, the average CPC or cost-per-click of a Google AdWords Ad is $3.79.  So let’s do a little math here.  If you can spend $379 to get 4 customers… what does that mean to you?

Well… a lot.

Let’s start with your sales.  What is your average order size?  What is the value of a new customer?  What value will they have to you over the long run?  If you are in a business where any customer that purchases at least $50 at a time, and they are likely to become a repeat customer… you my friend, are in a great business that will likely be a good candidate for a Google AdWords Campaign.  Why?

Well, if you purchase 100 clicks for $379 (this is just an example) and just 4 of those clicks turn into customers with an average order size of $50… you have now done two things:

1.  You’ve figured out exactly how much money you need to spend to get customers to buy your stuff, and….

2.  If you do so much as increase your conversion rates by 1 or 2 percent, or lower your cost-per-click (a remarkably easy task once you have a solid understanding of how Google AdWords works) you are now easily profitable, and you can ramp-up or ramp-down your new customer acquisition just as you see fit.

Because you now have statistically proven, cold, hard data, that tells you that when you spend $379 for example you will now have 4 new customers that are worth $400 at least, if not more if you capitalize on following up and having them as a repeat customer.

Being an excellent AdWords advertiser is so very easy to do.  All it takes is a little smart work.  Once you get your conversion rates up and your cost-per-click down, Google AdWords can now be your own little push-button customer generating machine.

Now, one caveat: don’t think that you are going to just waltz over to Google AdWords, slap down your credit card and start having streams of paying customers piling into your doors ready to buy.

You’ll blow through your ad spend faster than a snow bird at a slot-machine in Vegas.

Nope, it ain’t that easy.  But sadly that’s what so many people do when they are new to AdWords- they think simply buying the traffic to their site is going to turn in to sales. When in reality they end up paying what I like to call the ‘Google Stupidity Tax’

Traffic is just one part of the Digital Marketing ‘Triangle’… the other two parts are Conversions and Economics, which I’ll talk about in a later post.

While I can’t recommend Google AdWords for your business enough, make sure you have the conversion and economics piece in place first.  If you’d like more info on how to do that, please ask me.  I can help.

Have a great Labor Day Weekend!

Hal