10 great tips to make Google AdWords profitable

With the majority of all Internet traffic passing through organic search, it is only natural to want to advertise on Google using AdWords.

AdWords is an exceptionally powerful and flexible platform for creating and managing online advertising campaigns, but it is fraught with peril for newcomers, who may quickly blow their ad budget with little to show for it.

This article will provide some insight into how you can get your marketing message in front of the right people, at a low enough cost that your conversions can drive decent profits.

Why online advertising?

To be blunt, I don't like advertising online because I generally feel like marketing dollars should be invested in creating great content that has long lasting benefits. In reality, not every business is well suited to generating large amounts of high quality content that must compete with millions of other content producers to drive traffic.

Content is also subject to the whims and tantrums of Google's search algorithms, so any business that wants to use the Internet as a source of revenue should not rely heavily on organic search traffic. And, while online advertising has very short-lived benefits, they are at least immediate, and it can be quite exciting to see an advertising campaign driving traffic, and converting it nicely.

Not only that, but if you're really smart, it is possible to derive some decent longer term benefits from advertising campaigns that aren't intended to run continuously.

Let's take a look...

Top tips to maximize your AdWords ROI

In order for any advertising campaign to be profitable, you're going to need conversions.

A conversion can be anything from making a purchase, to signing up to a newsletter, or any other predefined action you want people to take once they reach your site.

With that in mind, here's our first tip:

1. Create a list of clearly defined conversions

That might seem like a no-brainer, but it really does help to list all the goals and objectives you want to achieve from running an ad campaign. Make your conversion list as fine-grained and detailed as possible because that will...

2. Focus ad campaigns to a fine point

Knowing precisely what conversions you're after means that each campaign you create can target that conversion precisely.

Create a single campaign around a single conversion. Everything in that campaign must go towards driving a positive return around that specific objective. In other words, creating a campaign in AdWords should not have a title like "promoting my business". This is far to vague. It should have a title like "Clearing our surplus stock of mittens using discounts", or whatever... you get the picture.

Of course, within a campaign, you must create one or more ad groups. Continuing with the above example, an ad group might focus on "kiddies mittens", "knitted mittens", and so on.

3. Create logical, highly focused ad groups within a campaign

Focus, focus, focus. You get the picture right?

Going further, within the ad groups, each ad should be focused on a particular sales pitch or angle. Although, at this level there is some room for split testing (also called A/B testing):

4. Create a range of ads that focus on the same conversion point

While you might understand exactly what actions you want people to take, it is not likely that you create a perfectly targeted ad right off the bat. It takes a bit of patience to get things right.

But, AdWords does a good job of analyzing which ads are performing better and displaying them more often - to minimize losses on ads that aren't working well for the selected keywords.

Ok, so this brings up another important point:

5. Select keywords that are well targeted and relevant to your ads

In general, I would favor adding highly relevant keyword categories as opposed to picking out specific keywords. The reason being that there are often way too many keyword permutations to pick out by hand:

But adding entire keyword categories can lead to expensive clicks that come from undesired keywords and phrases. For example, adding an entire category of keywords for a category like "desig eCommerce store" might add related but undesired keywords like "free eCommerce store designers".

If your service isn't free, then you probably don't want to compete for traffic that is not looking for what you are offering. In this case:

6. Use negative keywords

Negative keywords tell Google not to display ads if those keywords are present. You can access the negative keyword interface from the bottom of keywords list when viewing an ad group:

However, it's not enough to rely solely on negative keywords to help keep your ad campaigns lean and mean. You have to:

In particular, don't get fooled into thinking that every click holds the same value. In many cases, clicks coming from some keywords may not lead to enough conversions to pay for themselves.

7. Target the audience properly

Targeting keywords is pretty much useless if you aren't going to think about who is typing them into Google in the first place. If your ad campaign is trying to sell surplus mittens at a discount, then it pays to think about what type of people are interested in mittens, and target your campaign around those people.

If your company is based in New York, does it pay to advertise mittens across the whole of the U.S.? It may or may not, but it is likely that there are enough New Yorkers wanting mittens that you can reduce the costs of delivery by focusing on the local market (instead of delivering them to Louisiana).

8. Implement proper conversion tracking

AdWords offers its own conversion tracking through the use of an embedded code snippet. Click on Tools & Analysis >> Conversions in your AdWords account to set things up.

Remember, you can set goals to track conversions from within your analytics account, but doing this won't make that conversion data available in your AdWords keyword reports.

9. Constantly refine and improve campaigns, groups, ads, and keywords

By looking at how much keywords are costing compared to how much they are generating, you will hopefully be able to come to an optimal point where your ad spend is relatively low, and your conversions are relatively high.

The bottom line is that you need to be profitable, otherwise the exercise is not really worth it. Except in the corner case where the exposure you gain may lead to secondary conversions or conversions down the line. For example, paid traffic may not convert into a sale on their first visit, but if your site is good enough, they may sign up to your mailing list or bookmark the site and return later to convert.

It pays to think closely about the design of your site so that conversions are clear to understand and easy to perform. This means you need to:

10. Constantly refine and improve website design, landing pages, and content

The quality and skill of your advertising means very little if the website is not optimized to make conversions when the right people are online. Ensure you understand the entire picture, including how well the site is designed and how well it converts.

So those are my tips to help you increase the profitability of your AdWords campaigns. It's such a big subject that I'm going to have to write a series of these articles to drill down into specifics. Hopfully, for now, you're able to convert these tips into a better ROI for your ads.

Share your own tips and ideas on how to lower AdWords costs and increase conversions from paid traffic in the comments.