Google AdWords and Your Business

Written on 01 January, 2006 by Netregistry
Categories Pay Per ClickSearch Engine OptimisationWeb Design & Content

In an exclusive interview with Netregistry, we ask Kate Vale, Head of Sales & Operations, Google Australia & NZ why Google AdWords is the online advertising choice for small businesses.

What advantages does Google AdWords have over local competitors such as Yahoo/Overture and Sensis? Why should small businesses choose AdWords over them?

In addition to offering a higher reach and larger share of search page views, the key difference with Google is our approach. Google is objective and democratic, basing rankings (of both search results and ads) on calculations that take into account what content the web community views as valuable. It is this focus on relevancy that delivers a compelling experience for users and advertisers.

How important is online advertising proving to be? Is it generating meaningful results for Australian advertisers?

Online is a proven and established advertising media. Backed by solid ROI data, many advertisers are now moving an increasing proportion of their marketing budget into online channels.

This can be seen in the latest Australian Bureau of Verification Services (ABVS) figures, which show online as the fastest growing media sector and paid search the fastest growing of the online categories. According to its latest survey, the online market grew more than six times faster than the overall ad market to hit $388 million in 2004.

As far as you know, has Australian business been quick to embrace AdWords, or are we lagging behind compared to other territories?

Whilst the paid search advertising category is performing well and expected to grow at a compound annual growth rate of 37.5% to 2008, some analysts suggest Australia is 18 months behind the US in development. In fact, analysts Frost & Sullivan say Australia has not yet reached 5% saturation in terms of paid search advertising—so there’s a lot growth potential.

With so much competition over keywords now, are small businesses being squeezed out of effective PPC advertising, or do they just need to be a lot more sophisticated in their approach?

Unique in the paid search market, Google actually rewards relevancy. Your ad is ranked on the search results and content pages based on various performance factors including: maximum cost-per-click (CPC), click through rate (CTR), and ad text. Having relevant ad text, a high CPC and a strong CTR will result in a higher position for your ad.

Because this ranking system rewards well-targeted, relevant ads, you cannot be locked out of the top position as you would be in a ranking system based solely on price.

Small business marketing strategies are all about return on investment (ROI). What are the reporting features on AdWords that will allow advertisers to accurately track ROI?

To help advertisers measure and track the success of their AdWords campaigns, Google provides full online statistical, conversion and financial reporting.

You can view your average actual cost-per-click (CPC), the number of times your ads were shown (impressions), how many times users clicked on your ads (clicks), and your ad and keyword click through rates (CTR).

You can also track your AdWords conversions (successful sales, leads, or submissions) with our basic and custom conversion tracking feature.

How does AdWords deal with ‘click fraud’ (the malicious clicking by unscrupulous persons or competitors to deplete your advertising fund)?

We know that there has been concern and attention to this topic. However, this has not been a material issue for Google. We have sophisticated technology that detects click fraud and while we cannot promise that we will be able to prevent all instances of click fraud, we are very pleased with the results to date. Ultimately, advertisers see the value of advertising with us because of the conversion rates. Therefore, over time, the issue is self-correcting.

A whole industry has developed offering AdWords management. In your opinion is there any benefit to these services or can it all be achieved through AdWords itself?

Google provides a range of free, easy to use tools to help you get started with AdWords and manage and optimise your campaigns. You can be up and running in less than 15 minutes and using the online tools can quickly learn to identify the best performing keywords and maximise your CTR and conversion rates. Whilst there are many companies providing search advertising services, you don’t need specialist knowledge to make AdWords work for you.

Google AdWords is also testing a CPM (cost per impression) campaign that offers a different pricing and targeting model. Can you tell us about this, and why an advertiser might choose CPM over CPC?

CPM (cost-per-impression) pricing is a component of the site targeting service Google is currently testing and is only available for advertisers using site targeting.

With site-targeted campaigns, advertisers will simply set a maximum CPM. The model is different from other CPM models, where advertisers must pay a fixed CPM - with our model, advertisers bid the maximum they would be willing to pay for a thousand impressions, and then their ad competes for advertising space on the site with other site-targeted ads as well as with keyword-targeted ads. Advertisers will only pay 1 cent more than what is required for them to maintain their advertising position.

Google recognises that advertisers might have different marketing objectives in mind that call for a range of bidding options. The advertiser should use the bidding option that will allow them to meet marketing objectives.

Generally speaking, if they are running a direct response campaign, then the CPC strategy may be more efficient - as opposed to an awareness campaign that will maximise exposure via CPM.

With the CPM trial, you are also enabling advertisers to use graphics and animations rather than just text ads. Is this likely to be extended to the rest of AdWords at any point?

Google image ads are a new type of graphical AdWords ad appearing on select content sites in the Google Network. Image ads combine two powerful approaches: graphics and proven AdWords targeting technology.

Unlike traditional online graphical ads, image ads are matched to a page's content and user demographics. This targeting makes image ads more attractive and relevant to anyone browsing the site. Therefore, image ads offer you yet another effective way to increase your business exposure and reach new prospects.

The image ads feature is currently in beta release to all advertisers in multiple languages and over 180 countries, including Australia.

AdWords advertisers can now target Google’s Network [of quality websites], the Google Search Network or both. Now on the horizon is Site Targeting. Can you tell us a little about this?

Site targeting is an important step in the evolution of our advertising program. It enables advertisers to easily target their ads to thousands of specific content sites across the Google Network. It also provides publishers with access to new advertisers and increases competition among ads for display on their site. This increases competition for ad space on specific sites, providing users with more useful, more diverse, and more relevant ads.

Site targeting isn’t available yet. We’re currently testing it with beta sites and we expect it to be available to all AdWords advertisers in the near future.

Is there anything else in development for AdWords?

Google is constantly developing and reviewing new program features. Some of our favourite ideas can be found in the Google Labs.