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Robert Skelton
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How Personas Play a Major Factor in Your AdWords’ Success

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In AdWords, not everyone can have their ads in the #1 position, no matter how desirable it might seem. Have you ever wondered why ads end up in the position they are in? Ultimately, the personas of the account owners/managers are a factor.

Before we delve into the details, let’s take a brief moment to dissect the very nature of AdWords.

AdWords is an auction

For non-virtual products out in the real world, auctions tend to have many bidders trying to purchase single items. The highest bidder wins, and usually they pay a price that they believe is suitable. The other bidders don’t lose anything except for their time and effort.

AdWords is also an auction, but because the product isn’t physical, everybody wins! The more you bid, the higher your ad position.

In AdWords, higher ad positions equate to higher numbers of visitors, but at a higher cost per click. It is very hard to determine the value of each position until it can be analysed with enough data. Most bidders will never analyse the data – at least not properly.

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AdWords is like gambling

In sports betting, bookmakers use all of the bets they receive to determine the most likely outcome. The aggregated opinion of all the bettors is usually pretty accurate, and over many events, the number of winners and losers will be roughly 50/50.

AdWords is just like sports betting, but instead of collectively determining the score in an event, they are determining the value of a lead.

It is more complicated than that, because each website in the auction will convert to a lead differently – but this knowledge is not public.

So when Google’s keyword planner says the suggested bid for “car crash lawyer” is $80, roughly speaking that is the value (multiplied by their lead conversion rate) that industry believes a lead is worth.

If they typically convert clicks into leads at a rate of 20%, then a lead is worth $400.

When you see that suggested bids for “whiplash lawyer” is $40, the implication is that it converts worse.

Winners and losers

Every business has different costs and margins. For one lawyer, a $400 lead will be a bargain, and such leads will provide healthy profits. For another, who has higher rent and poorly trained sales staff, $400 a lead could be a recipe for bankruptcy.

Because the $400 lead value has been collectively determined by averaging out bids, that suggests there are some who are getting $300 leads from their bidding, and there are those who are receiving leads costing $500. Therefore, for every winner there is a loser – just like in gambling.

Personas

From auditing and working on hundreds of AdWords accounts, I’ve determined some personality types regarding ad positions.

If there is no reasoning behind how much you bid and your consequential ad position, then you could be losing money.

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Those who are really winning:

  • Big brands and industry leaders. Either they are just killing it because they are better in general, or they are allocating ad spend to brand awareness because they are measuring its value.
  • Loss leaders. Their ad competitors just sell widgets. The loss leader sells widgets cheaper than everyone else, advertises the price, bids high and gets the click-through rate. He loses money on selling widgets, but every second customer buys a hover-board as well, and they make him lots of profits.
  • Regular businesses who understand data. Every conversion is tracked. Their entire AdWords account is measured, analysed and optimised. Not a single keyword runs at a loss.
  • Great copywriters writing great ads. Higher CTR equals lower CPC equals lower costs per lead. One killer ad can be as valuable as hour upon hour of tedious optimisation.
  • Day-parters. They have worked out when (or where) their ads convert best, and don’t run them at other times or places. This can be the difference between winning and losing, and you can’t tell from looking at their ad copy and landing pages if they are doing this.

Those who really are losing:

  • Big brands and industry leaders. Because of the difficulties of measuring brand awareness, they keep running ads at a loss (lead-wise) regardless.
  • “I want to be in #1 no matter what”. This could be due to pride, or to show their competitors who is boss, or it is just the mindset that drives all of their business decisions.
  • Not tracking conversions. I would say roughly 50% of advertisers either have no conversion tracking, or it is incomplete or poorly implemented. Without accurate data, there is no way of telling if your ads are performing profitably for you.
  • High-level analysis. Say to preserve margins, the most you can afford to pay for a lead is $400. If half of your leads come from keyword A and cost $300 and half come from keyword B and cost $500, then the average is $400. Yet you are really losing from half of your keywords, because all you are looking at is the account-level average.
  • Set and forget. You’d be surprised how many accounts are untouched for years on end.
  • Bottom feeders. These advertisers feel compelled to advertise, no matter what. As a result, they are bidding low so that it doesn’t cost them so much. But even the lowest bids can be unprofitable.

How to succeed with AdWords

Given that half of advertisers will have a negative ROI, the first step is to find out if that is you. Properly implemented conversion tracking and detailed analysis are critical.

Once you know your ROI from ad spend, the next step is to keep optimising your account to improve your ROI. This takes time, so make sure you include your time as an expense when determining ROI.

And finally, consider outsourcing the management of your campaigns. A third-party manager will change that ad copy that you are proud of, but doesn’t convert. And on top of all of their skills and optimisations, they will have more experience – that means the type of knowledge that can only come from working on dozens of different accounts.

Interested in getting your AdWords campaign ranking high and reaping success? Contact the team at WME today.

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By Robert Skelton


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