Google Ads Primer – Lesson 2

Last week, we discussed why you should possibly run your own Google Ad marketing. This week, I want to give you some important information about how you should approach your first campaigns.

I am not going to do a step-by-step tutorial for setting up campaigns because there are already plenty of those online. If you need that kind of help, check out google’s advice. What I want to do instead is give you some big picture principles, and today, I am going to start with the biggest: cost management.

I have already emphasized that Google Ads is complex. It is quite possibly going to be one of the most complex systems you are ever going to interact with. How complex? Even Google itself cannot really predict what is going to happen with their system. And even if they could predict such things, there are certain factors out of their control that they cannot predict. For example, they cannot predict whether a new competitor is going to show up with a big budget or when a product might suddenly get hot.

What this unpredictability means is that you have to watch your cash very carefully. If you are not smart, you will watch it disappear with nothing to show for it. That brings me to my list of cash management tips:

Use a budget on every campaign. Keep it small at first and raise it slowly.

Google wants your money, but you really are in control of how much you give them. Never ever start a new campaign without having a low budget on it. Watch your numbers and make sure that you are getting the results you need before you start raising your budget. Also, remember that raising the budget itself has a way of changing the numbers. Keep your budget raises small.

Know what numbers are important.

There are all kinds of numbers you can watch in an advertising campaign. Google will absolutely bury you in numbers if you are not careful. However, there are a few numbers that are especially important if you are in internet retail.

The queen of all advertising metrics is something called MER (media efficiency ratio). This is a very simple ratio of revenue to advertising spend. In other words, if spending $1,000 in ads drives $2,500 in revenue, your MER is 2.5. Google refers to this metric by the title “Conversion Value / Cost.” Get very familiar with this metric regardless of what it is called.

I will talk about MER and other metrics in an upcoming post. However, make sure you determine the numbers that matter to you and watch them religiously.

Make sure you have tracking in place

It is absolutely critical that you have implemented Google Ads tracking on your websites. This tracks back sales revenue to your Google Ads campaigns and the specific ads in your campaigns. This data gives you the power to make great decisions.

If you are using popular e-commerce platforms like WooCommerce or Shopify, this kind of implementation is fairly easy. For example, in WooCommerce, you simply need to install a free plugin. If you have a custom-built website, the implementation is a bit more work.

Optimize and test relentlessly

If a campaign is going to work, it is probably going to work pretty well out of the box. A bad campaign normally cannot be optimized into a good one. But on the other hand, a good campaign can be optimized to make it better. If you can optimize a campaign so that it is 20% more efficient, that is a very big deal. In fact, this is the kind of work that often makes the difference between a profitable campaign and an unprofitable one.

I will talk more about optimization in the coming posts. It can be a frustrating and unpredictable process but it is very necessary.

Rely on numbers rather than gut or emotion

Have I said this is complicated? The only certainty about this kind of advertising is that what you think will work often will fail. The opposite is also true. Get your tracking and budgets in place, start your testing, and then make decisions based on hard numbers. That is the way to see success.

I will start talking about campaign structure next week.

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