Why It’s Crazy to do Your Own AdWords

Search Engine Marketing (SEM) is the most cost effective way for a small business to reach a target audience. Compared to direct mail, TV, radio, print, billboards and other traditional media, SEM has the lowest cost per new customer acquired.

Every business of any size receives numerous offers from Google every month for $50 or $100 in free SEM spend on Google AdWords. Virtually every business I’ve talked to that has taken Google up on their offer and trialed AdWords as a DIY project has come away thinking that SEM doesn’t work for their business.

The fact is, it will work for your business, you just don’t know what you’re doing (also a $100 spend isn’t going to take you very far.)

Google’s pitch is that AdWords is easy and anyone can do it, but from a practical standpoint, that’s simply not true. To do AdWords right, you need a lot of specialized training. You also must be spending several hours a day (at least) running AdWords campaigns, every day. Otherwise you’re like the DIY plumber that floods his house or the amateur barber that butchers her kid’s haircut – you’re going to make a mess of things.

An SEM specialist needs to understand the AdWords bidding process, geo targets, geo modifiers, keyword categories, ad layout and design, ad extensions, conversion page optimization, quality scores and lots of other things. The businesses I’ve talked to that love SEM and spend a big piece of their ad budget on it all have one thing in common, they hired an SEM specialist to run their program.

Don’t think you can assign a new or existing employee your SEM campaign in addition to other projects like web design, SEO, social media or traditional marketing. To get good enough at SEM to achieve strong results, you must be a fulltime specialist.

Besides hiring an employee or contractor, there are many national, regional and local internet advertising companies that will run Google AdWords (and Yahoo and Bing) campaigns for a fee. Any business spending less than $20,000/month on SEM should go this route, it’s way cheaper than a fulltime employee.

If you are thinking of signing up with one of these digital advertising vendors, here are some really important issues and questions to ask before you sign a contract:

  1. Do not sign up for more than 3 to 6 months initially – Most vendors want 12 month contracts. But if they don’t deliver the results you were told to expect, you don’t want to keep throwing good money after bad. Make sure you can get out early for poor results.
  2. Make sure you know who will be managing your campaign – Is it a person or a robot? Many SEM programs are fully automated and lack the fine-tuning of a program run by a highly trained human. If it’s a person, is it a CSR or a trained SEM specialist? Can you call a specific person anytime to discuss your campaign, and can you get their name, email and phone extension? Usually dedicated account managers or dedicated campaign specialists are reserved for larger customers spending $1,000 or more per month on SEM spend.
  3. They should train you how to understand their dashboard – All legitimate SEM vendors offer an online dashboard that allows you to track campaign results, usually in real time. This is how you can tell how your program is working. They should walk you through how to interpret all the graphs, tables and gauges on your password secured dashboard.
  4. Make sure you spend enough – After the vendor develops your initial set of keywords and geo targets, ask them to show you what the average cost of those keyword/geo combinations is. To run a decent program, you’ll want to get at least 100 clicks a month. (That number is based on an average of 10 clicks generating one action, i.e. a phone call or purchase or other conversion. Your ratio may be higher or lower.) If your average cost per click is $6, your minimum monthly spend should be $600. Spending less will mean that you likely won’t get many new customers.
  5. How much of your monthly fee goes toward spend? The spend is the amount of money paid directly to the search engine – Google, Yahoo or Bing. The rest of your fee is the management fee for the service provider. If your monthly spend is below $500, the management fee should be in the 50% to 100% range. Spends between $500 – $5,000/month should generate management fees in the 25% to 40% range. If your spend is over $5,000/month, your management fee should be 20% or less.

There are other key issues to consider, but these are some of the big ones. Be sure to do your due diligence on your prospective SEM service provider, it will greatly increase your odds for success.

If you need more information, send me an email at danhanssel@gmail.com. For more posts and info see https://danhanssel.com/

 

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