Google Ads: A Guide To Optimizing Your Account

1. Introduction

What are Google Ads and how do they work?

Every second around the world, there are over 63,000 searches performed on Google, with the vast majority of these including paid search results in the SERP (Search Engine Results Page). Because of this, Google Ads provides huge opportunities for advertisers to reach a large number of people searching on Google. What’s more, the search terms they use become an excellent way of segmenting and targeting specific users.

When a user searches a term on Google there will be a mixture of paid and organic results, with the paid results appearing at the top and bottom of the page, along with an “ad” label next to the result. These paid results are the Google Ads Search Network, which allows advertisers to get in front of potential users for terms they are searching. Below is an example of how these paid and organic results look on the SERP:

Google Ads can be an extremely effective way to drive relevant, qualified traffic to your website, by showing up exactly where your potential customers are looking for products or services you offer.

What are the types of Google Ads available to my business?

When setting up your Google Ads Campaign, it is important to understand the various types of ads available to you within the Google Ads platform. These include:

• The Google Search Network: Consists of text ads on the Google Search Engine Results Page.
• The Google Display Network: Consists of image ads on various websites.
• The Google Shopping Network: Consists of product listings on the Google SERP.
• The Google Video Network: Consists of video ads on Youtube.
• The Google App Network: Promotes Apps across many different channels.

The types and combinations of Google Ads campaigns you chose will depend on your business. The Search Network is a great place to find highly qualified traffic and get them to your website, but generally at a higher cost per click. The Display Network can be a great way to re-market to previous website visitors and increase conversions. The Shopping Network tends to work well with e-Commerce companies and e-commerce sites with a lot of inventory.

How is my Google Ads Account structured?

Before you begin to set up your Google Ads account and campaigns, it is important to have insight into how your Google Ads Account is structured and how each level functions. There are three main administrative levels to a Google Ads account, your Account Level, Campaign Level and Ad Group Level:

• Account Level: Your account is associated with a unique email address, password, and billing information. For reporting purposes, it’s helpful to think of your account as a collection of campaigns.
• Campaign Level: An individual campaign has its own budget and settings that determine where your ads appear, and is made up of a collection of ad groups. Each of your campaigns is listed in the left-hand side panel of your Google Ads account, and also appear when you click the Campaigns tab in the middle of your screen.
• Ad Group Level: Your ad group contains a set of similar ads and the words and phrases, known as keywords, that you want to trigger your ads to show. Your ad groups can be a great way of segmenting your ads based on the users search intent or the services that you offer. By segmenting and A/B testing ad groups you can continually optimize and improve performance.

What is the Google Ads Auction?

Google Ads determines which ads appear with a lightning-fast ad auction, which takes place every time someone searches a term on Google or visits a site that shows ads.

There are 3 main factors at the ad auction that determine which ads appear, and in what order:

1. Your bid: When you set your bid (CPC), you’re telling Google Ads the maximum amount you’re willing to pay for a click on your ad. How much you actually end up paying is often less, and you can change your bid at any time.
2. The quality of your ads: Google Ads also looks at how relevant and useful your ad, and the website it links to, are to the person who’ll see it. Google’s assessment of the quality of your ad is summarized in your Quality Score, which you can monitor, and work to improve, in your Google Ads account. Quality Score is calculated based on the combined performance of 3 components:
   1. Expected Clickthrough Rate: The likelihood that your ad will be clicked when shown.
   2. Ad Relevance: How closely your ad matches the intent behind a user’s search.
   3. Landing Page Experience: How relevant and useful your landing page is to visitors.
3. Expected impact of your ad extensions and other ad formats: When you create an ad on Google, you have the option to add additional information such as a phone number, or more links to specific pages on your site. These are called ad extensions. Google Ads estimates how extensions and other ad formats you use will impact your ad’s performance. So even if your competition has higher bids than yours, you can still win a higher position at a lower price by using highly relevant keywords, ads, and extensions.

Together, these three factors determine when and if your ad will appear to potential customers. So, in the ad auction, that will fire every time someone searches a term in Google, you will be competing with a whole host of different local and international businesses and websites, to get your ads shown for relevant searches.

2. Optimizing Your Account In The Setup Process

Introduction

Now that you know a little more about how your Google Ads accounts are set up and how they work within the ad auction, you can begin to set up your own account and campaigns for success. As is so often the case in marketing, the first stage of this is in-depth market and competitor analysis.

Competitor Analysis

Competitor Analysis is essential in gaining a deeper understanding of how your competition operates on Google. As we have seen with the Google Ad auction, each of our ads are competing directly with local and international competitors to appear on the SERP, and so launching your Google Ads campaign without in-depth competitor analysis is similar to playing a game of baseball with one hand tied behind your back.

The first step is to always conduct an in-depth competitor analysis before launching a campaign. In fact, it is a crucial step in the validity stage, to see if a Google Ads campaign would have potential to work for your business. After all, the more you know about how your competition operates, the better prepared you can be to beat them.

One crucial step in your competitor analysis will be to conduct keyword research, in order to see the terms that potential customers are using to search for your products and services, as well as seeing what keywords your competitors are ranking for. Equally important, you will discover what keywords your competitors aren’t targeting. The overarching aim here will be to determine the likely search volume, competitiveness and average CPC of each keyword, and to use these metrics to build your own keyword list.

Keyword Strategy

The aim after this stage is to have a full and fleshed-out keyword list for each campaign and/or ad group, that accurately reflects the product or service you are offering, and has enough reach and competitive opportunity for success. It is important to have your account structured correctly, with your campaigns and ad groups targeting different services with a different set of keywords for each group of ads.

For example, if you are a hair salon offering male haircuts and female haircuts, you could create two separate ad groups, with your male ad group including keywords such as “barbers” and ‘Mens Haircuts” and your female ad group containing keywords such as “Blowdry” and “Extensions”. Having different sets of keywords in each ad group will also allow you to tailor your ad copy to be more personalized, which tends to boost conversions.

After developing your keyword lists for each ad group, you will also need to add negative keywords. Similarly to how a keyword will make your ad fire when it is searched, a negative keyword will prevent your ad from firing when it is searched. Some recommended negative keywords include “scam” and “free” however these will depend on your industry and business.

Audience

With Google Ads, your audience can be segmented quite effectively based on intent. So the keywords that are being searched by your user help to segment your target audience. However, there are also options for further segmentation and targeting.

You can add audience segment targeting to ad groups to reach people based on who they are, their interests and habits, what they’re actively researching or how they’ve interacted with your business. You can specifically target your ads towards an audience, or you can set up ‘observational’ audiences, where you can get data on your ads performance amongst this group, without limiting your ads to only target that group.

At Salt Water Digital, we always recommend setting up Observational Audiences first and then analyzing ad performance amongst this group before using Targeted Audiences in your campaigns. It can be an extremely useful optimization tool, targeting campaigns at well-performing audiences that have a higher likelihood of converting. Below we break down the different types of audiences and how they work:

• Affinity: These allow you to reach users based on what they’re passionate about and what their interests and habits are.
• Detailed Demographics: These allow you to reachers based on long-term life facts, such as age, gender or marital status.
• In-Market: These allow you to reach users based on their recent purchase intent, and can be very useful for determining where in the buying cycle the customer is, and how likely they are to convert.
• Your Data Segments: These allow you to reach users that have previously interacted with your business. This can be especially useful for creating remarking display campaigns.

Location

The next crucial aspect of optimizing any Google Ads campaign is determining what location you wish to target. The two main things that will determine your location will be the area that your business can serve and your budget. When you target a larger area, generally you will need a larger budget in order to buy up a percentage of a larger amount of traffic.

In Google Ads location settings you can target specific countries and cities, and you can also avail of radius targeting. This allows you to select an exact location and target a radius area around that location. For example, if you are a pizza delivery service, you may wish to target users within a 20km radius of your business.

Budget

Before you create your first campaign, you need to decide how much you are willing to spend. Running a digital marketing agency, it is a question we get asked frequently.

How much you should spend on Google Ads varies considerably, but will depend on:

• What are your sales and lead goals?
• How large of a geographical area are you targeting?
• How competitive is your industry on Google?

The next step here is determining how much it will cost you to acquire traffic to your site. We look at the metric CPC (Cost Per Click) here to determine the average cost of acquiring one visitor. The average CPC of a particular keyword is a good indicator of the level of competition you will face for that keyword.

The tool we use to do this research is Google Keyword Planner. Here you can enter keywords that relate to your industry, and you can find out the average CPC. So if you are a hairdresser based in Vancouver, you might search keywords such as “hairdressers Vancouver” “hairdressers near me” and “best hair salon”. These keywords may have an average CPC of $3, and so a monthly budget of $1,000 should amount to 333 website visits per month.

The other important aspect here will be your website conversion rate, or in other words, the percentage of your total website visitors that convert, whether that be a sale, sign up or another form of desired action. This will depend on how relevant and easy to navigate your website or landing page is, and we recommend having a clear and distinct call to actions (CTA’s) to improve this.

So, taking our hairdresser example, if your conversion rate is 20%, you will receive 333 website visits, and 66 appointments. If the Value of an appointment averages $40, your Google Ads campaign will have brought in $2,640 at a cost of $1,000. This means your Return on Investment (ROI) will be 264%.

$1,000 / 3 = 333 / 20 = 66 x $40 = $2,640 / 1,000 = 264%

Bidding Strategy

The next stage in optimizing your Google Ads account during setup will be to decide on your bidding strategy. This bidding strategy can be set at the campaign level or the ad group level and will depend on your specific goals.

Choosing the correct bidding strategy is critical to the success of your campaign, and can help you drive down costs and maximize your ROI. You can choose from a number of Automated and Manual Bidding strategies, and we will break down the main options available to you below.

• Maximize Clicks

Maximize clicks is an automated bidding strategy based on your maximum daily budget. Google will attempt to drive the most clicks possible within your daily budget. If you are selecting an automated bidding strategy, we would usually recommend starting with a maximize clicks strategy until you can build up more conversion data in the account.

• Maximize Conversions

Maximize conversion is often our recommended bidding strategy once you have enough conversion data. We recommend having at least 30 days of conversion data before switching to maximize conversions, to allow google to optimize so that it can drive as many conversions as possible within your daily budget.

• Manual CPC (Cost Per Click)

This is a fully manual bidding strategy and the one that affords you the greatest amount of control when it comes to optimization. However, it also requires more attention so we only recommend using this strategy when you are well versed on Google Ads. Essentially, you can set specific max CPC bids for each individual keyword, usually based on intent and how well they are converting. For example, ‘hairdresser near me’ may have led to 10 appointment bookings this month, whereas ‘hairdresser’ may have led to 2. Using manual CPC I can adjust the max CPC on ‘hairdresser near me’ and raise it from $3 to $4. This will shift more of our budget towards the higher performing keyword.

Another important metric here is Search Impressions Share. This is the percentage of total searches for a keyword you ads fired. The closer this is to 100%, the less effective raising your max CPC will be. This is because raising your Max CPC allows you to preform better at the bidding auction and capture for impressions.

Conversion Tracking

Possibly the most important aspect of an Google Ads campaign is your conversion tracking. This means that we can track users when they go to our website, and we can count conversion actions, such as sales, sign ups, and more. This is the only way that we can make Google Ads measurable and report on ROI, which is an imperative part of any advertising campaign. If you host a website with Shopify, Lightspeed or a similar platform, often the integration for sales conversions is very easy to set up. For more complex conversion tracking, we use Google Tag Manager to set up conversion events. Often these will be for conversion actions such as newsletter sign ups, contact us button clicks, phone calls from ads and direction requests.

Conversion tracking is a key part of our set up process here at Salt Water Digital, and it is important to have your goals aligned with measurable conversion actions to get a better understanding of how your campaigns are performing. There are a number of associated benefits to setting up your conversion tracking correctly, including:

• Seeing which keywords, ads, ad groups, and campaigns are best at driving valuable customer activity.
• Understand your return on investment (ROI) and make better informed decisions about your ad spend.
• Use Smart Bidding strategies (such as Maximize Conversions, target CPA, and target ROAS) that automatically optimize your campaigns according to your business goals.

3. Your Ads & Extensions

Ads Optimization & Best Practice

So you have your campaign and ad groups, and your keyword lists for each. Now it’s time to start writing the ad copy that your users will see and interact with! From June 30th 2022, the only type of search ad available is the Responsive Search Ad. This is a form of ad where you write multiple headlines and descriptions, and Google will automatically choose which show based on how likely they are to convert. You can also pin specific headlines into positions 1, 2 or 3. For example, a common use of pinning is to pin your CTA to position 3, such as ‘Contact Us Today For a Free Quote’. Below is an example of a Responsive Search Ads layout:

Our best practices to follow when you first start creating these Responsive Search Ads include:

• Use keywords in your ad copy. Using keywords that users are searching in your ad copy will give your ads a high degree of relevance to the user, and will boost your chances of the user clicking on your ad and potentially converting.
• Use Dynamic Keyword Insertion. Dynamic keyword insertion is an extremely useful tool provided by Google when drafting ad copy. Essentially, you can add a keyword to your ads headline, separated by commas {}, and this will change it to a dynamic keyword. This means the keyword will change to whatever term the user searched to make your ads fire. It makes your ads much more relevant as the exact search term a visitor uses will appear in your ad copy.
• Use Specific CTA’s. One of the most critical aspects of your Ad Copy will be the CTA’s (Calls To Action) that you choose to use. The aim of our ad copy is to get users to click our ads and visit our website. CTA’s are a great way of doing this by enticing readers to take the desired action. Examples include “Get a Free Quote Today” or “Learn More”. Each of your ads should contain a CTA that entices the reader and ideally provides them with something of value.
• Always A/B test ad copy. Here at SaltWater Digital, we always recommend creating three variations of your ad for each ad group. Each ad should have specific ad copy, extensions or CTA’s. We can then monitor the performance of each ad and see which copy and extensions perform better. Our worst performing ad can either be paused, or have its copy and descriptions edited to improve its performance. The most important metric for evaluating your ads performance is CTR (Click Through Rate) or the percentage of users that saw your ad and clicked on it.

Landing Pages & Extensions

With each ad you create, you also need to include the landing page or the final URL that your ad will take the customer to. This can be a specific page on your website or a tailor-made landing page. At Salt Water, we have created several tailor made landing pages for a host of different clients, and they can make a huge difference in boosting conversions and making your google ads profitable.

You also have the option to add extensions to each of your Google Ads campaigns and ad groups. Extensions expand your ad with additional information, giving people more reasons to choose your business. These may increase an ad’s clickthrough rate by several percentage points. Extension formats include call buttons, location information, links to specific parts of your website, additional text, and more. Below we break down some of the different forms of ad extensions available to you:

• Sitelink Extensions: These are useful for directing users to other pages on your website. They allow users to choose where they would like to go on your website directly from the ad, as opposed to visiting the landing page or website URL linked to your ad copy.
• Callout Extensions: These are versatile extensions, with a 25-character limit, that are used to highlight important selling points or services you offer. For example, if you want to promote a 25% off sale, free delivery, or your business’s 60th anniversary, callout extensions are perfect. You’re allowed six callout extensions per campaign, and they should apply to the entire offering you’re advertising.
• Structured Snippet Extensions: These are useful for highlighting specific products, services and features users may be looking for. Structured snippets show beneath your text ad in the form of a header (ex: “Type”) and list of values (ex: “Day Pass, Monthly Pass, Annual Pass”).
• Call Extensions: These extensions make it easy for searchers to call directly from your ad. They include a click-to-call number in your ad for mobile users and will also dynamically change the number for desktop users. These call conversions are tracked, allowing you to measure the value of your ads by the number of phone calls they generate.

Display Ads

Another option within Google Ads, is the Google Display Network. The Display Network helps advertisers reach people as they browse different websites, apps, and Google-owned properties (such as YouTube and Gmail). The Google Display network effectively feeds visually engaging ads to users across a host of various websites.

Display campaigns will tend to have much higher impressions and lower click through rates when compared to Search campaigns. This is mainly due to the fact that search campaigns feed ads to users who are actively searching for that product/service using keywords, whereas the display network does not. As a result search traffic can be much more qualified.

One common use for the Google Display Network is re-marketing campaigns. Re-marketing involves targeting users that have already visited our website in order to get them back to the website and boost conversion rates.

4. Continued Optimization

Search Term Reports

The primary tool you will have to begin optimizing your campaigns once they are live is the search term report. This is accessible from the campaign or individual ad group level, but it should always be reviewed individually for each ad group. Essentially, the search term report shows you the terms that users searched in order to see your ads. You can see which keyword triggered your ad, and metrics such as click through rates, CPC and conversions.

You should analyze your search terms reports regularly. Our process includes adding search terms that bare relevance and describe your service to your keyword list as exact match keywords. Meanwhile, we’re adding non relevant keywords to your negative keyword list. You can also ad keywords and search terms that are leading to a high amount of conversions, or similarly, pause keywords that aren’t converting or are costing too much. It is important the think of the users intent behind their search when adding keywords to your keyword/negative keyword list.

Ad Copy

Another critical aspect of ongoing optimization is your ad copy. This is what users will see and interact with and will be how you convert google users to website visitors. We have talked previously about how to set up your ads for success, but it is also important to consistently review your ads performance, and to tweak and A/B test both your ad copy and extensions to see their effect on performance. Typical KPIs we track for ad copy include click-through-rate and conversion rates.