As many of you know, this past October we celebrated our 15 year anniversary. Over those 15 years Internet marketing has changed considerably. The year after I started Digital Solutions we experienced the dot com bust and subsequent recession. A year later we witnessed the September 11th attacks and the following year Google found a way to actually make money and released AdWords. Last year of the $55.5 billion in revenue that Google reported, $50.5 billion (91%) was from AdWords. AdWords is the reason there is a Googleplex, Google Maps, and Google cars mapping the earth.
In traditional advertising, advertisers are accustomed to paying for impressions. Ads are bought and sold on a basis of CPM or cost per thousand impressions. AdWords and pay per click marketing differs from traditional advertising in that advertisers only pay when ad viewers interact with the ad. AdWords is pay per click advertising and this concept flipped the advertising industry’s billing model upside down. Google now gives impressions away for free and only charges for interactions where in traditional advertising impressions were the main method of billing and there was no attribution model to bill based on interactions.
AdWords allows the advertiser to target users based on phrases they are searching for, content they are reading or perhaps the most overlooked targeting today; AdWords can target ads to users who have previously been to your site or taken a certain action on your site. What this means for the advertiser is that AdWords is an incredibly targeted means of advertising and it can be incredibly tailored.
An example would be if a cobbler in Massachusetts places an ad through AdWords on the search network for the search phrase “new shoes MA.” This cobbler decides to revolutionize the shoe industry and begin selling online. His first attempt at an AdWords ad is below:
He sets his budget at $3,000/mo which he estimates will bring him 1,500 new visitors to his site each month. The campaign starts running and he sees traffic to his website spike. But he also notices that some of the traffic only views one page on the site and then leaves — these visitors are called ‘bounces’. And some other traffic adds shoes to the shopping cart but doesn’t complete the purchase. The cobbler decides to create remarketing campaigns through AdWords to try to get these people to come back. Through remarketing, he creates ideas for two new campaigns.
Show an onlineshoes.com ad to on other sites to visitors who came to the site after searching for ‘new shoes ma’ but only viewed one page and then left the site.
Campaign: Abandoned cart
Show an onlineshoes.com ad to on other sites to visitors who came to the site after searching for ‘new shoes ma’, added items to their cart but never completed the purchase. Offer 15% discount if they complete their order today.
This cobbler has been in business for a long time and knows that he needs to close the sale as quickly as possible because today’s buyer is easily distracted. If they cared enough to search for new shoes or to even add items to a cart, then he believes these visitors are a great target for additional advertising.
There are many many targeting ideas just like these that can be implemented through AdWords and most importantly can be measured to prove results. Today consumers spend twice as much time online as they do watching television yet total online advertising spend is only half of television advertising. In the coming years, as more businesses learn about the potential with online advertising models such as AdWords, we will see more and more dollars moved from traditional advertising to the web. As the volume of ad budgets allocated for the web increases, the prices available today for web advertising will also increase. Before this happens en masse, there are many incredible values that can be found through pay-per-click marketing that likely won’t be available in a couple years as competition for keywords continues to increase. So what are you waiting for, start your AdWords campaigns today.