Google Adwords 101

2. Pay only when they click through.

The other great thing about Google AdWords is that the cost of advertising is brought down to very manageable levels. Unlike conventional advertisements where you have to pay FIRST before your ad is shown, Google charges you only when a user clicks on your ad to visit your website.

Just how much is charged for every click? Only as much as you want it to be. Google has implemented a bidding system to “sell” keywords where advertisers, just like you, will dictate how much a cost-per-click (CPC) on an ad will be. The general principle being: the more popular the keyword is, the more expensive it can become.

For example in this case, the CPC on a results page using the (more popular) keywords “macro photography” may cost 50 cents while the CPC on an ad appearing on the results page for the (not so popular) keywords “macro lens maintenance” may just be 20 cents.

However, don’t be misled with this seemingly low cost. Agreeing to pay 50 cents per click may not seem much, but if 200 people click on your ad every day, you’re looking at $3000 per month. Even for a medium-sized business, that is still something to consider. This is where smarter advertisers not only spend less in advertising but also increase their revenue by converting more casual visitors to actual customers.

By using more specific keywords you show your ad to a person whose interests are that much closer to what your business is offering. Therefore, when he clicks on your ad to go visit your website, it is no longer your burden to convince him he needs your product or service.

With this setup, it is not far-fetched to being able to conduct a nationwide ad campaign for your business at a dollar a day AND see encouraging results on the bottomline.

In the end however, all these innovations still build on the foundation of knowing your customer and how they think. Once you’ve got this down pat, AdWords then becomes a much more powerful tool that can increase your online business’ potential to make profit.