When you use Google AdWords for advertising, one of the first things you need to tackle is choosing which keywords you want to target. What this means, is that you choose which searches specifically you want your adverts to appear on, with the aim of thereby ‘targeting’ the most relevant traffic. Someone who sells hats in New Jersey, for instance, might use the keywords ‘buy hats New Jersey’.
Why Keywords are Expensive
Once you choose the keyword you want to target, a bidding system then begins where all the companies targeting the same phrase will be automatically entered into a ‘bidding war’ similar to eBay. The one that wins will then get to display the ad and the ‘cost per click’ (the amount the advertiser pays when someone clicks on that ad) will be equal to the winning bid. If the bid goes higher than your ‘maximum spend’, then of course you will be withdrawn from the bidding. These are only the basics of how AdWords works but it tells you most of what you need to know.
This system has many pros and cons. The ‘cost per click’ nature of AdWords means that you won’t pay unless you win the bid and get the traffic. At the same time, it often means that you can get visitors to your site sometimes for less than a cent per click. This is particularly true for companies targeting less in-demand keywords such as local business-related keywords.
On the downside though, some of the terms that are in demand can go for a lot of money pricing them out of the range of smaller organizations. Data from a couple of years back can show us just how expensive some keywords can get:
The Most Expensive AdWords Keywords
- Insurance – $54.91 per click
- Loans – $44.28 per click
- Mortgage – $47.12 per click
- Attorney – $47.07 per click
- Credit – $36.06
- Lawyer – $42.51
- Donate – $482.71
- Degree – $42.02
- Hosting – $31.91
- Claim – $45.51
As you can see, these most expensive keywords mainly relate to big-ticket items that will justify the amount spent on advertising. They also tend to apply the finance industry which is the industry spending the most on AdWords generally. It does though suggest that this kind of advertising must be profitable for those companies, otherwise they likely wouldn’t be investing so much.
How Do You Compete?
The question you might now be asking, is how you can possibly compete with companies that are able to invest so much into their advertising? How can you hope to win the bidding wars and get your advertising to even show up on Google?
The trick is to avoid direct head-to-head competition. Instead, you should focus on aiming for more long-tail keywords and more specific search terms that include local keywords and other qualifiers. You can also use negative keywords and include your price in the title of your advert in order to ensure that the only clicks you do receive will be from people who are highly likely to make a purchase. That way you can afford to invest a little more into your campaigns by making them more efficient.
Be quick to pounce on new search terms and use the flexibility of being a small business to your advantage. Over time, you can invest more into your campaigns and one day you may even be able to take on the larger businesses head-to-head. Of course, you can also get professional help to help you triumph on Google Adwords!