Getting a business off the ground with AdWords

Small businesses are especially close to my heart. When he retired from teaching, my father ran a small art company in Maine, and I saw firsthand how fulfilling — and how difficult — it was for him to realize his dream of running his own business. Unfortunately, his business closed its doors after just a few years. His key challenge: attracting qualified customers.

Many new businesses face similar challenges, but the power of technology can help business owners find the customers they need. Whether you’re a fledgling entrepreneur trying to turn your passion into a profit or an established enterprise trying to get to the next level, Internet tools like Google AdWords are the key to being there when customers come looking for you online.

To show what’s possible, we invited 53-year-old Jay Berkowitz to share his experience creating a business and using AdWords to help it flourish. Here’s what Jay has to say:

Like most first-time parents, my life completely changed when my daughter Hillary was born in 1993. My wife Janet and I decided that one of us should stay at home to care for her while the other continued working full time. Janet kept her engineering job, and I ended up quitting my job as a Wall Street bond analyst to become Mr. Mom.

Later, when Hillary started school, I had more free time. It seemed like the perfect chance to do something I’d always dreamed of: launch my own business and work for myself. I started selling themed plates and lunchboxes at New York City street fairs. Then in 2001, eight-year-old Hillary showed me (her non-tech-savvy dad) how to turn on a computer. That was the beginning of taking the business online, and realizing a whole new world of possibility. Janet and I worked together to build a website,PlatesPlus4Kids.com, and we started advertising online with Google AdWords. Soon, my little project became a full-fledged venture.

By advertising on the Internet, I was able to reach interested customers not only in my area, but all over the country. More and more people found my store through online searches. In no time, I had so many orders that I could no longer keep my inventory of themed cups, plates and lunchboxes on the kitchen table. The stock moved to the den, then the basement, and finally to a warehouse 20 minutes from our house in Little Neck, New York. Over the years, I’ve also expanded my product line and now offer children’s backpacks, umbrellas, flatware, snack containers and sandwich boxes. What started as a hobby now brings in about $500,000 in sales annually.

I only pay when people click on my ad and go to my website, so the cost of marketing is within my means. I increase the budget during the back-to-school season and the holidays (my peak periods) so my ads show above the search results during those times. I’ve also noticed that customers seem to be in a shopping mood on Mondays and Tuesdays, so I sometimes increase my budget on those days to make sure my ads show up more. Depending on trends, I create new ads to promote different characters and new inventory. For example, now that Yo Gabba Gabba is popular andbaseball season is starting, I’m making adjustments so that those phrases combined with words like “dishes,” “placemats” and “cups” trigger my ads. And of course, I have ads that mention items with princesses and superheroes — those are top sellers year-round.

What’s really great is that even though my business has expanded over the past seven years, it’s still a small family company. Two people work for me at the warehouse, but I work from home. Janet takes pictures of the products and works on the website on the weekends. I’ve had the freedom to be a hands-on parent to Hillary and the privilege of helping other parents connect with their kids through my store. Certain celebrity parents have found me through my AdWords ads and bought items for their kids.

I consider myself a pretty ordinary guy. When I started PlatesPlus for Kids, I had no idea it would become what it is today. It’s heartening to know that by following your gut and putting in a lot of hard work, you can find a fulfilling second career. Or maybe a first one.

Posted by Claire Johnson, Vice President, Online Sales and Operations, Advertising Programs

Source: http://googleblog.blogspot.com/2010/04/it-takes-one-to-show-one-getting.html

Keen to know more about Adwords? Let us tell you more here: PPC Singapore

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Google AdWords Tax Calculator

Many experienced advertisers realize that there are many gotchas in the AdWords system…optimization tools and default setting which optimize to boost Google’s yield at the expense of unsuspecting advertisers, who don’t yet know what match types are or that their ads are syndicated to content sites by default.

To help new advertisers get past many of the gotchas we created the Google AdWords tax calculator – a free utility which highlights many stumbling blocks that catch new AdWords advertisers.

Given that each keyword market is unique it would be impossible to make a tool that was 100% accurate in every situation, but the goal of this tool was to simply highlight common issues, and help new advertisers address them. Individual efficiency gains may be greater or smaller than the rough initial estimates the tool provides.

Please let us know what you think, as we will gladly iterate this calculator to make it better if you have some great ideas you think we should include in it. Like all of Google’s products, our calculator is starting out in beta

Product Extensions for U.S. AdWords Advertisers

Google has just rolled out a new feature of AdWords – product extensions which shall be available for all U.S. AdWords advertisers.  Product extensions are new ways by which you can add more relevant and specific information to your Google product ads.

AdWords’ product extensions let  you use your existing Google Merchant Center account for highlighting products directly in search ads, so that when your AdWords text ad appears and your Google Merchant Center account contains products that are relevant to the searcher’s query, it will display images, titles and prices of your products in what Google calls as plusbox located under your ad.

Succesful transactions resulting from AdWords product extensions are charged to your account on a cost-per-click basis. Meaning you won’t be charged if a user simply expands the plusbox and did not click through your site. Product extensions could improve your ads’ CTR (clickthrough rate).

In addition, since product extensions are charged on a CPC basis, it will only display if your ad is triggered by one of the keywords in your product extensions enabled campaign. You can even select which products are to be displayed when a user’s query triggers your ads.

To add product extensions to your Google AdWords ads, simply log in to Google Merchant Center and add your AdWords customer ID to your Account. Then visit the campaign settings tab under your AdWords account and click on the “Ad extensions” option. You will then nee to select “Use product images and information from my Google Merchant Center account.

Check out the SEO Tools guide at Search Engine Journal.

Product Extensions for U.S. AdWords Advertisers

Online Ad Revenues On the Rise

The Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers released their latest Internet advertising numbers for the third quarter. According to the organizations, Internet advertising revenues reached nearly $5.5 billion for the quarter. That is an increase of 1.7% from the second quarter.

The numbers are still significantly down from the same period last year, but any increase is a good sign of things to come. There has been a 5.4% decline from last year.

“The Internet has transformed the consumer experience of media, providing marketers with unprecedented opportunities to engage with their customers,” said Randall Rothenberg, President and CEO of the IAB. “The advertising sector overall has been hard hit by the economy, but digital media has been a bright spot within the larger economic downturn as it is capturing an ever-increasing piece of marketers’ advertising spend.”

“While all segments of the media industry have experienced declines, online advertising remains resilient and is once again showing signs of growth,” said David Silverman, a partner at PricewaterhouseCoopers LLP.

The information from the IAB/PWC is considered the most accurate measurement of interactive ad revenue, the IAB says, because its compiled directly from info supplied by companies selling advertising on the web. The IAB releases a full report twice a year to reflect half-year periods. It will be interesting to see how the second half of the year plays out in its entirety.

Related Articles:

> Online Advertising is Having a Big Year

> Online Ad Revenue Tops $10 Billion

> IAB Releases Ad Unit Guidelines Update

Badly-Managed AdWords Accounts — Worse for You Than for Google

With a few high-profile exceptions, water always flows downhill. If you want to calculate which way a river flows, all you need to calculate is which end is on the high ground, and which on the low ground, and there’s your answer.

Similarly, the flow of advertiser dollars from other channels into paid search platforms like Google AdWords has been predictable over time because of one factor: measurable performance when compared head-to-head with other channels.

In accounts where that condition hasn’t been satisfied, companies don’t increase budgets for paid search. They don’t always shut off their accounts, though. So the end result is an account that sort of wanders along, hoping for the best, performing far below potential.

At different points in time, this state of affairs might benefit Google a lot or a little. The times when it benefited Google less were when their relevancy incentives (mostly CTR-based) were set in a dogmatic sort of way. If your account was really lazily and loosely targeted, eventually stuff would get “disabled” or “deactivated.” That would kill volume for you, but you were probably doing horribly anyway, so it was actually a savings. Google, meanwhile, didn’t get to exact as much of an “idiot tax” out of you. So they had to rely on other mechanisms, such as ego bidding or a hot economy, to further their profitability.

It’s not quite like that now. Google has a sophisticated set of mechanisms for selectively allowing you to screw things up. They may not particularly like your fuzzily-targeted ads, but they’re willing to show a certain percentage of them in certain verticals as long as your bids are sky high.

The end result of a low-volume, fuzzily-managed campaign, of course, is a poor ROI for the advertiser. But here’s the curious thing. If the company has invested something in people and plans to run ads in this channel, they don’t shut it off completely. They treat it like their other underperforming channels: shrug their shoulders, hope it gets better, turn the budget down a bit so it doesn’t cause significant harm. From day one, I’ve suggested that this isn’t a true savings, but a squandering of potential. “All in” or “all out” should be the advertiser’s mentality. It is difficult, but not impossible, to optimize your campaign so that increasing the budget is feasible. If that’s not happening, why run it at all?

The fuzzy, meandering, high-CPC-low-return campaign is not a negative scenario – short term – for Google’s revenues and profits. These inefficient campaigns collectively spend heavily, smoothing out the ups and downs of the keyword auctions where advertisers are managing more tightly to customer responses. That’s one of the reasons why, in the near term, Google’s revenues will continue to rise gradually or at least be flat, avoiding the severe hits that other advertising media have taken during the recession. Look for proof of this with Google’s upcoming Q3 2009 earnings release on October 15.

At Page Zero Media we inherit such accounts fairly often. There are two common targeting errors that companies make in the early days of planning AdWords campaigns:

(1) Loose and broad targeting, particularly of the type that addresses a mass market when you’re going for a niche market. A company will say to themselves (perhaps having watched Conrad Hilton in Mad Men saying he wants to put a Hilton “on the moon”): “We want someday to be the biggest and best insurance company in the world!” But for now, they’re just focusing on being top-of-mind in car insurance for high-risk drivers, especially those under the age of 25. Somewhere along the line, possibly in a text message from a golf banquet with impressive friends, the CEO forced the associate to the assistant marketing director to try broad matches for the words “insurance” and “car insurance” in the campaign. They’re still eking along, in select markets, costing the company $18 per click whenever they are clicked, eating into the allotted budget for all the good stuff.

(2) Insider thinking. Companies get into their own jargon, right down into the regulatory mumbo-jumbo from arguments in Congress about all the players in their industry. The next thing you know, there are ad groups containing all the jargon about high-risk drivers — jargon that’s only ever come up in those Congress debates, in board meetings, and expensive consulting reports. People click on the ads occasionally, but they’re inevitably just looking for information, not a car insurance vendor.

As these cardinal errors continue to eat away at the overall budget, the ROI for the whole campaign looks poor. The budget stays where it is. And the company concludes that the channel doesn’t match the hype.

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I got a note from a colleague who has spent years building out paid search campaigns that have formerly failed for the above reasons. Here’s his tale of woe – the industry sector changed to protect the innocent:

If I can lend a “yes this is the way it works” rule to any PPC work for [insurance] that we should inscribe into our core being: Seth Godin needs to be read by every one of the people who do campaigns for them. Most of the time (probably CEO driven) they focus on the whole “getting their name out there” thing. Each new one I see is a broad, undisciplined mess. They constantly target information seekers with words like “best insurance” or “top insurance companies”. The people who click those 1) Already have a vendor and are satisfied with them; and 2) Are simply looking for ideas; 3) In no way are targeted properly. The kicker is that those words are $5, $6, or $10 a click. They might as well spend that money on a TV commercial because that is akin to interruption marketing, PPC style. You can get fooled as well, because if someone has an article on top insurance companies on their site, like our client does, people will read it and stay. The bounce numbers tend to be pretty low, so if you are looking at that only, you get a false sense that the words are working. But when you look at signups, they are very close to 0%. I am not sure many of them do it, but content and blogs should be king for these sites, for those words; and they should spend that money on writing content. If you have and write articles based on all the key buzzwords like “car insurance comparison”, you should get bang for that on organic search for $0. Example: “Best [(competing but ultimately very different type of) insurance]” and so on. Our new client spent $22,000 on those words via adwords. They got one person to sign up for an account. ONE! [Edit: we did more checking, and it might have been two.] Conversely: Targeted to their selling proposition of [doing more research on individuals in high risk insurance categories to offer them a break on rates if possible], those words [all having to do with insurance rates, unfair insurance rates, demographics of insurance rates] and so on, with a good ad, had $4000 spent and they got 20 people to sign up. OK, long story short: For financial services, not unlike others but especially for them, being targeted to exactly what you do if you are spending $4 a click or more is so vital it is not funny.

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Google has worked themselves into a situation where the “idiot tax” helps Google’s bottom line. So although they’d prefer it if most advertisers improved the relevancy of their advertising, the current system is built to hedge against idiocy. That being said, then, Google doesn’t stand to gain a whole lot as advertisers become savvier and more efficient. In the past, the genius of the ad platform meant that Google’s earnings and profits raced ahead faster than expected. During the recession, they’re outperforming everyone else. But as the economy recovers, this current efficiency also means that you may not see Google grow as fast as you expect. They’ve wrung a lot of cash out of relatively wasteful advertising. Less wasteful practices will definitely help individual advertisers… a lot. They won’t help Google nearly as much.

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