How to Set Up Profitable Pay per Click Campaigns – A Primer

I heard an experienced strategic planner comment recently that "pay per click advertising wasn't worth doing anymore".  For some, pay per click advertising is seen a deep dark hole to toss our money in. Is it really? My answer is YES! Yes, it can be if you aren't managing your pay per click correctly. But... and it's a BIG but... pay per click advertising can and should be a PROFIT CENTRE when managed properly!

How to Set Up Profitable Pay per Click Campaigns - A Primer

In my experience of over a decade of managing search engine marketing, pay per click advertising is almost always a profit centre when used appropriately for your business. Some campaigns involve high budgets and big returns on investment, some involve minimal spend and smaller profits. But it's almost always worth using pay per click advertising at some level for most businesses.

So what do you need to do to make pay per click profitable? You need to realize that pay per click advertising is very much an exercise in mathematics. If you do the math right you can be more assured that you are in fact getting a return on investment for your Google AdWords or BING Advertising campaign.

Stages for a Successful Pay per Click Campaign

Here are the basics for setting up a successful, profitable pay per click (PPC) campaign. I will add more detail for each step in future posts. And I'll concentrate a little more on step 5 as this is where you can "do the math" to help you determine your return on investment for your AdWords investment. FYI... I am going to make the assumption that you are using Google Analytics as your clickstream measurement tool. But other digital analytics tools can also be configured in a similar manner.

1. Business Research

You must research your business and actually have a business model that is profitable. Doh!

If you can't make a profit selling products or services pay per click isn't going to help one single bit. We'll assume that you have done your initial business research and you have established the following:

Product Net Profit
Blue widgets $100
Red widgets $150
Green widgets $200

This initial research is absolutely key. If you don't know the net profit amounts of your services or products you are going to have a very difficult time determining return-of-investment on your campaigns.

2. Keyword Research

Using various keyword tools such as Google AdWords Keyword Planner, which you'll need an AdWords account to access, or SEMrush you can find what keywords are presently being used. In this case, we're looking at people who are interested in buying widgets: specifically blue, red and green widgets. The key is to focus on profitable keywords; not every keyword or phrase available. Just the profitable ones.

3. Build your pay per click campaigns

Set up your pay per click account, then build campaigns. I like setting up campaigns in narrow geo-targeted groups, and then build as many ad groups as needed that are targeted to specific keyword themes. In this case, blue widgets, red widgets and green widgets for each geo-targeted group that I am selling too. Allocate your budget to the most profitable keywords. And target the right locations.

4. Landing Pages

How to Set Up Profitable Pay per Click Campaigns – A Primer

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Build a series of landing pages that address the various ad groups in your campaign. In this case I would have at least three landing pages; one each for blue widgets, red widgets, and green widgets. The better quality each landing page is often the lower my paid bids need to be in AdWords. Google refers to this a Quality Score. You improve your quality score by building landing pages that are specifically customized to the keywords for each campaign that lands on that page.

This video provides a great overview of what Quality Score is.

If you are selling blue widgets the landing page needs to be theme for blue widgets; not green widgets or widgets or any colour.

5. Tracking, measuring & reporting

This is where we can setup up reporting to help us determine if our AdWords campaigns are profitable… or not. This is the "do the math" stage.

Ensure that you have ad tracking turned on in Google AdWords. This is usually setup by default within AdWords but be sure to check this is enabled before you begin your campaigns.

Link your AdWords campaign with Google Analytics account. This will allow you to pull in your AdWords data directly into data collected by your website.

Setup conversion tracking by adding some Google AdWords code to your website. This video gives you more details on setting up conversion tracking.

Specify goals in Google Analytics to track conversions. In this case, the final "macro" conversion for me is a completed sale for blue, red or green widgets. And assign a net profit within Google Analytics for each goal. Here is where you'll add in the net profit amount for your red, blue and green widgets shown above.

Once you have done this Google Analytics will provide you with all sorts of data including a ROI figure for each campaign.

Campaign Spend Sold Net Profit* Subtotal Profit Loss
Blue widgets $1,000 16 $100 $1,600 + $600
Red widgets $1,500 8 $150 $1,200 - $300
Green widgets $1,800 11 $200 $2,200 + $400

* Net Profit = Net Profit / Widget

With our example blue widgets was the most profitable campaign despite having the lowest net profit. The red widgets campaign lost money. I can either pause / stop the red widget campaign or work on improving it.

6. Campaign Optimization

By continually monitoring your results as noted in point 5 you can then work on continually optimizing your campaigns. You do this by a variety of tactics including improving your ads, adding more profitable keywords, removing or adjusting unprofitable keywords and improving the quality score of your landing pages.

7. Keep Moving Forward

Keep improving on utilizing what is working... and lose what isn't.  It's a continuous process. It takes work but it can be well worth the effort.

Take No Short Cuts & Maximize Your Profits!

You can't take any shortcuts. You need to follow all of these steps and be committed to continual monitoring and optimization. But it you follow these steps, "do the math" and keep moving forward paid advertising like Google AdWords or BING Advertising can definitely be a money maker!

And if you need any help setting up and/or managing your pay per click campaigns to ensure they are profitable get in touch with us. We've been managing pay per clicks campaigns for over a decade.

Roy McClean
Mar 19, 2014
By Roy McClean

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