Does Google AdWords Work?

We're often asked this question by prospective customers, "does Google AdWords really work?". Then they might say "Oh, I never click on those Sponsored Links, no-one does".

Well, the reality is many people do actually click on them, and here's why. The success of Google is based on one simple factor - the algorithm that determines what search results will be displayed is all about relevance. When we search the internet, we want to find what we're looking for, and we want it now. If the search results we see displayed were not relevant, then we'd soon lose faith in that search engine. Google rose to dominance because they provided the most relevant search results in the shortest amount of time.

Ok, but what does that have to do with the Sponsored Links / Google AdWords ads? The primary reason we click on the ads is because more and more of us are finding that these ads are highly relevant to what we're looking for. When we complete a search on Google, our eyes scan the results page for the headlines that are the closest to what we searched for. Most often we'll click on a listing that is at or near the top of page one. Why, because we believe that the results near the top must be the best (after all, they're at the top so they must be the best right?). Google in essence has 'trained' us to believe these are the best results, and so the top ones are typically what we'll choose.

However, over the last few years, Google has started placing Google AdWords ads or Sponsored Links above the natural or organic listings. To many searchers, they don't distinguish the difference between the Sponsored Links and the organic listings. So if one of the ads is highly relevant, they're quite likely to click on it - not necessarily even realizing its an ad. At first this might seem devious on Google's part, but when you think about relevance, Google is simply trying to put the best results in front of you, the searcher.

So why would Sponsored Links likely be more relevant than organic listings? The organic results displayed down the left side of a search results page are displayed in an order that Google determines based on their very complex ranking algorithm. Website owners and search engine marketing businesses have no direct control of how high up the list they appear because the Google algorithm is a secret. Search Engine Optimisation will help to improve the rankings of a website, but its by no means a science. However, what website owners and advertisers can control with accuracy is the positions of their Sponsored Links / Google AdWords ads on the first page.

The Google AdWords system is principally a live auction or spot market. The advertiser places a 'bid' in the AdWords system to secure a particular ad position (first, second, third etc through to tenth), and depending on the price bid by other advertisers, either achieves the desired ad position or is relegated to a lower position if outbid. The advertisers bid can then be adjusted up or down, based on the competition and the ad position they want.

So unlike organic results, Google AdWords ads are very controllable. And even better, Google 'rewards' advertisers with discounted per-click costs for AdWords campaigns that 'perform' well i.e. the ads are well targeted and highly relevant which means searchers click on them often. They also reward good performing ads with 'Top Placement' - this is when the ads show immediately above organic search results. Having your ads show in top placement means they are considerably more likely to be clicked on, and you will deliver more visitors to your website.

Finally let's touch on the notion of dominating Google 'real estate'. A typical Google search results page will display 10 organic results and 10 Sponsored Links - that's a total of 20 results. If you have one page of your website displayed on a search results page, you have 1/20 or a 5% chance of being clicked on. If you also have a Google AdWords campaign running, and your Sponsored Link is displayed as well as your organic listing, you've now doubled your share of Google 'real estate' to 2/10 or 10%. Now imagine if your AdWords ad was displayed in position #1 and your organic listing was also near the top? That's right, you're highly likely to attract the click of that searcher and it communicates trust if they see you listed twice.

And an AdWords discussion wouldn't be complete without mentioning the cost of clicks. AdWords ads are displayed for free and are paid for only when a searcher clicks on them (that's why its also called pay-per-click advertising or PPC). Many of our prospective customers ask us, "but how much do clicks cost?". Because the Google AdWords system is a live auction, click prices are determined by the amount of competition, and how much the competition is willing to pay for a click and hence a visitor to their website. The average cost per click for our clients is in the range of NZ$0.40 - NZ$1.00 at present. Clicks can be as low as NZ$0.02 or over NZ$5.00, again depending on the competition. While the cost per click is important, the viability of using Google AdWords should be determined by return on investment (ROI) not cost. The AdWords system is fully measurable and so should the desired results generated by your website (a completed enquiry form for instance). For every dollar you spend on AdWords, you should know what that is delivering to your business in terms of leads or sales generated.

Does Google AdWords really work ? AdWords click revenue is reportedly the majority of Google's overall revenue…yes, people click the ads. And if your AdWords campaign is well researched, well built and well managed, we know from our extensive Google AdWords experience with NZ businesses that it will generate leads and sales for your business.

Contact us if you have any questions or if you would like to discuss your AdWords strategy.

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