Google Adwords for Decision Makers: Partnerships and Budgeting

By Jasper Vallance | 28 May 2013

It’s one thing to have a rough understanding of SEM, but another entirely to have the time to create and maintain successful AdWords campaigns, writes Jasper Vallance.

It’s one thing to have a rough understanding of the mechanics behind search engine marketing (SEM) and Google’s AdWords. It’s another thing entirely to afford being able to monitor an AdWords account on a regular basis without compromising your campaigns.

That’s why this second part of our series on AdWords for decision makers covers everything you need to consider when budgeting for implementing AdWords, as well as concerns for partnering with an SEM agency or independent consultant.

How much should you invest in AdWords?

Given the volume of searches and available keywords on Google, it’s possible for a brand to spend a lot of money in a very small amount of time. While there is no precise way for me to indicate what your spend should be, there is a science behind providing an estimate.

Unlike other marketing channels, you’re not locked into AdWords for a set period. You can updated your daily budget at anytime, but your budget directly impacts your coverage and traffic. For this reason, it’s best to begin by assessing your objectives (if you’re unsure about your overall strategic goals for AdWords, read up on Part One of this series).

Brand Exposure vs. Sales

If, for example, you sell designer furniture and you have a brand consideration goal, you would therefore want to appear on all searches for ‘designer furniture’. In this case, you will need to have a sufficient daily budget to ensure you budget does not run out.  You can use the Google Traffic Estimator Tool (found under the Tools & Analysis Tab in the AdWords interface) to estimate the budget required to give you maximum coverage for specific keywords based on an estimated cost per click.

If you are purely focused on online sales and return on investment, the right way to approach it is to have a trial budget that is sufficient enough to indicate whether the campaign will perform or not. If the budget it is too low or spread too thinly over a long period of time it will take a long time to get enough data to learn how well it’s performing. If you’re new to AdWords, you may just want to start by focusing on one or two of your key product categories for a one month campaign. Allocate $100 per day and that should give you enough data after a week or two to be able to optimise the campaign. By the end of the month you should have a good idea for how well its performing and to make budget decisions based on that.

Partnering with a Third Party

As you can start to appreciate, the set up, management and optimisation of AdWords campaigns is a complex task and so requires a reasonable level of expertise. This is why it can be worth making use of a relationship with a third party who provides the experience, saves you a lot of time and gets you better results.

There are many SEM agencies and consultants out there, but the challenge is knowing which ones are going to deliver the expertise and dedicate sufficient time to get you the best results. It is hard to decipher between who’s who in the market place and which will give you the best value for money.

Most will be ‘AdWords Qualified’, which means they have taken an online qualification to ensure their knowledge is up to scratch – but pretty much anyone can get this with enough swotting up. Here are some of the red herrings to look out for and tips for choosing the best agency for your business:

  1. Deal with the person who does the work – Often you will get someone senior in the agency who does the slick pitch to win the business, but then they hand the work over to someone more junior to do the work or even outsource it. This could be someone overseas, or in many cases an agency outsources it to yet another agency! Some web developers offer an SEM service to complement their offering, but outsource it and make a cut. You want to speak to the person who is creating the search strategy and building and optimising your account in order to ensure they have the necessary experience. Treat it like an interview; ask for lots of examples of how they how they have delivered results for other clients and the process used. How long have they been managing AdWords campaigns for? If it’s less than one year, I would be concerned.
  2. Watch out for over-complication and jargon-stuffing – I have seen agencies who lace their proposals with technical terms and extraneous items in order to make it sound as if they are doing more than they really are, which they then use to justify charging their clients more. Look for an agency that simplifies the process and is able to speak in plain english – they should be completely transparent regarding the actual work they are doing. The reality is once a campaign is set up it will run by itself without any extra work, so an agency could be charging you a monthly fee for not doing much at all! Ideally, a business should partner with someone who is optimising campaigns, demonstrating to you what work they have done and the results achieved.
  3. Cheaper is not better! – When comparing agencies, beware of those that are a lot cheaper than the rest. The likelihood is that they will spend less time on your account and probably outsource the bulk overseas anyway, which won’t do you any favours in getting the most out of an AdWords campaign. It’s worth paying more for expertise and an agency which has proven processes to get results.

Advanced Tips for Outsourcing SEM

  • Maintain access to your AdWords account – Some Google resellers use their own reporting interface and do not give you transparency to the actual data in the account, for example. While this can simplify things, I feel this does not allow you to get the most of the AdWords features and reporting. Also ensure there is nothing in the contract that prevents you from accessing your account if you change agencies. This is your valuable data.
  • Seek out vertical expertise – There is specific expertise and strategies to get the best performance out of AdWords in any one industry, so aim to find someone who has had experience working with similar clients in your industry.
  • Deal with an inclusive agency – If your agency is not spending the time up-front to do keyword research, nor appears focused on getting your search strategy right in the first place, be concerned. With millions of keyword variations, multiple devices and ad extensions there is a lot to get right.
  • Choose a partner that aligns with your goals – Some agencies specialise in ROI-focused campaigns, which is great if you just sell online, but if you’re a brand with stores then there could be better agencies to create a search strategy that’s integrated with your broader marketing campaigns. Search can drive in-store sales as well as online sales, so you want to ensure the search agency sees the bigger picture.

At the end of the day, the proof of the effectiveness of an agency can be measured by the performance of the campaigns. For this reason, be sure to negotiate an initial contract period that runs for no longer than a trial period of 30 days. That being said, unless the agency is severely under performing, don’t jump the gun in cutting them loose. Reserve judgement in the first few months, as SEM campaigns can sometimes take time to really begin driving traffic.

It’s also important to ensure appropriate metrics are set to measure performance in the first place. AdWords performance is not measured by eyeballs or impressions like with in media, but rather by the click through rate and resulting engagement or conversion achieved.

Paying for AdWords Management

There are different pricing models to choose from, but ideally the service fee should correspond to performance and the size/complexity of the campaign. Many agencies charge a ‘percentage of spend’ model, which seems to make no sense given this incentivises the agency to get you to spend more, rather than focus on performance.

A retainer model for service with agreed-upon bonuses based on performance would work best. Unfortunately, a challenge still remains when it comes to ‘joining the dots’ between mobile search and in-store sales, which can often be impossible to track.   This is an example where other, softer metrics can be used to measure performance. I have seen percentage of revenue models work well as this is a mutually beneficial arrangement.

In the next instalment of this series AdWords for Decision Makers, we’ll cover attributing AdWords ROI across multiple devices, channels and timeframes.

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