Is it worth starting an AdWords campaign for your website?

Long-gone are the times of the popular saying “build it and they will come” – it used to be the norm for websites. That being said, website owners now have numerous methods they can use to promote their websites including (but not limited to) SEO, Pay Per Click, Social Media and other methods.

When it comes to Pay Per Click (placing ads on other websites and paying only for visitors that click the ad and visit your website), Google AdWords is king. Don’t get me wrong, when testing Pay Per Click, you should always use more than one method. The reasoning behind it is simple:

1) You might be able to find cheaper traffic sources on other networks (like Microsoft, Facebook or even smaller networks). Since everybody is using AdWords, it’s logical that no matter how many visitors Google has on their website, it’s not enough and therefore the price/click gets higher.

2) Better converting traffic. There’s no argument that the traffic Google brings from the Sponsored Search Results is of high quality. But at the same time there are niches that would perform much better on another, more targeted network. For example, if you want to promote an extreme sports site, you will be able to find a network that owns or is managing the ads inventory of many sports sites, and therefore bring in a more targeted and “aware” audience.

3) Rules on how and what to advertise on AdWords are very strict. Google has recently paid $500 million for letting Canadian pharmacies advertise online on the U.S. market and therefore is now much more cautious on what they allow on their network and how well your landing pages are presented to their visitors.

 

Testing more sources for paid visits is a necessity, but AdWords is the number one place you should go to test if your site converts well.

 

Unfortunately though, there are sites that are not meant to be promoted with AdWords. And let me explain.

When you pay for a visitor, you expect to get some value from that. That value can be in the form of direct money (from an order on your store) or indirect money (from signing up to your promotional newsletter). It can also mean brand awareness (especially for a newly created company) or the initial kick start a viral campaign needs to start performing well.

What you should do, is to have a good monetization funnel and calculate as much as you can, what your visitor’s actions mean to you in terms of monetary value.  Newsletter sign-up forms are a great example. When someone is registering for it, you can send him self promotion emails, describing your services and passing value to that member in order to get hired or promote affiliate products (or both at the same time). If you manage to calculate the average lifetime value of each registered member of your newsletter, you’re ahead of 99.9% of your competition. Why? Because most just think: “I’ll bring traffic and I’ll make money”. Couldn’t be farther from the truth. If you manage to calculate your member’s lifetime value, you’ll be able to make calculated investments and take your campaigns to a different level.

Let’s say you pay 40 cents per click and your conversion from a visitor to newsletter subscriber is 10%. Then you know that on average, for every subscriber, you need to pay $4. If now, the Average Lifetime Value of that subscriber is more than $4, not only can you profit from your campaign but you can raise the daily spending of that campaign, thus making more profit.

 

Paying for campaigns that you know can’t break even is a disaster waiting to happen.

 

That’s why before you even start a paying campaign you should calculate what each action of your visitors mean to you in terms of money, plus find alternative ways to make the visitor more profitable for you.

There are sites that will never make a profit by running a campaign on AdWords. Burnabrain is a website we operate and its purpose is to add one funny image per day. It receives thousands of visitors per day and we make money by placing ads on it. It’s straightforward. But each time we discuss ways to bring more traffic, Pay Per Click is a NO-NO. Why? People coming to Burnabrain are not targeted: they just search for something to spend some time having fun, doing their break from work or from school. They’re not active buyers, trying to see reviews of what gadget to buy or if an investment is good for them. They are just looking for free funny images – nothing more. Therefore, there’s no way we will be able to make a pay per click campaign on AdWords work, much less profit from it, because even if we’re going to pay 3 cents / visitor because it’s a cheap niche (it’s cheap for the reason above) there’s no way to get those 3 cents back, no matter what we do. In fact, each visitor is worth much, much less than that.

So you might ask, why do you still do it and how you promote it? We’re loving Burnabrain and since it’s not so high maintenance we update it every day. At the same time we’re focusing on social media since it’s a funny niche, and social media loves it! People are always sharing funny stuff with their friends so since we have thousands of visits per day, we can make a profit without having to spend many times the money we make on Pay Per Click campaigns.

Another important factor is your product’s pricing. If the product you sell (if you sell any) is very cheap or the profit margin is small, even if you convert really well, you won’t be able to break-even, so creating a campaign is not good for this type of product.

Furthermore, no matter how good your profit margins are, how well you’ve created your campaign, etc., there’s no point in creating a campaign if your audience is just a few thousands of searches per month. Since you won’t be able to capture the 100% of those people (usually with enough funds you can make 3-4% of your market visit your page), you’ll have to make sure that you have enough of them searching for your services or products. One fast way to figure it out is to go to AdWords Keyword Tool and search your niche’s keywords trying to find enough searches per month to justify the creation of the campaign.

There are many niches that are not good for Google AdWords. Some of those are the funny, adult, medicine (now with the penalty on Google) and types of sites like forums (after a while the visitor becomes ad blind and never clicks on an ad).

 

So what you should keep in mind from this article what you should do is:

1. First check if there is enough interest and enough people searching for your solutions.
2. Find, create or alter your funnel in order to start making money from your visitors or make even more and try to calculate your average income from every visitor that visits your website.
3. If your profit margins are not high enough or if your product is very cheap, no matter how well you convert visitors to buyers, it’s not worth creating the campaign.
4. Last but not least see how much money you are willing to spend in order to test the campaign and see if it’s really worth it. Spending 20-30 hours creating a good campaign (or some thousands of dollars to have it created for you) and then testing with a budget of $10/day is not a good way to test it. You could use that time to write some articles and the money to create a press release and you would still have much better results than the visits you’d bring.

Since AdWords is a very important way to promote products and services, we’ll start adding more articles about it, focused on how-tos and tips for better pricing and placement options. If you are financially broke and you need to create a campaign, you can always get long term loans for bad credit no guarantor uk Stay tuned ;)

Angel