How should you set up a new AdWords campaign? That's a great question. But there is an even better one. How should our company structure our portfolio of AdWords campaigns?
The second question is better because almost no company has a single AdWords campaign. Instead, we meet our advertising need using a collection of campaigns, tailored to achieve specific objectives, and allowing the flexibility to re-allocate advertising spending to relect changing business priorities.
This post looks at five key aspects of an AdWords campaigns and to use them to ensure that each campaign performs its proper function within your overall AdWords account.
- Where Ads Appear (e.g., Search, Display, Video)
- Advertising Goal (e.g., Leads, Traffic, Phone Calls)
- Bidding Strategy
When you create a new campaign, Google AdWords asks you to select a campaign type. The type determines generally where your ads will appear (e.g., in searches on Google.com, on websites in the Google Display Network, etc.), but it can be adjusted in the settings. For example, you can create a Search campaign that also shows ads on the Display Network by selecting Search as the campaign type and opting into the Display Network in your network settings.
At the top level, Google defines five types of campaigns (although, note that campaign types evolve over time and are subject to change):
- Universal App
Our focus in this post is the Search campaign type. Setting up a Search campaign properly depends on the primary goal that you want the campaign to achieve.
Define Your Primary Advertising Goal
You might have many different advertising goals for your campaign. For example, reaching people in a certain country or city, managing to a particular budget, etc. But, the primary goal should describe what immediate action you want to solicit from the people who see the ads in this campaign. That could be purchasing a product, signing up for a free trial, visiting your website, remembering your brand name, etc.
Each campaign should have a single primary goal. If you have more than one primary goal, you can have multiple campaigns. For example, you might have one campaign to promote sales and another campaign to drive traffic to your website.
Don't confuse how you want to achieve the goal with what the goal actually is. For example, "generate phone calls" is not a primary goal. Phone calls could be a desirable means for a realtor to find prospective home buyers or it could be a means that a restaurant uses to receive take-out orders. In the realtor case, the primary goal is generating leads. For the restaurant, the primary goal is making sales (taking orders).
[TBD ... Primary goals align with Search Intent --> Do, Know, Go, Buy (https://moz.com/blog/revisiting-navigational-informational-transactional-search-post-pagerank)].
Google provides three high-level goals for the Search campaign type:
- Website traffic
Select the choice that most closely aligns with your primary goal. For example, if you want people to sign up for a free trial, select "Leads". If you want to promote a weekend t-shirt sale, select "Sales". The selection you make determines recommended settings and features that Google AdWords presents as you work through your campaign setup. If none of Google's high-level choices seem to fit your primary advertising goal, you can select "Create a campaign without a goal".
Focus on a Single Type of Action per Campaign
Once you have identified the primary goal of your campaign, think about how you want to achieve that goal. What action do you want the people who see your ads to take?
Generally, there are three specific types of actions you can target with Text ads on the Search Network: website visits, phone calls, and app downloads. It is a best practice to focus on only one of these actions per campaign. If you want both websites and calls, create separate campaigns for each. This gives you more control over your budget and better ability to optimize performance.
For example, suppose that you are a realtor and you generate leads both through phone calls and by having people fill out a form on your website. You might find that phone calls are working better than web leads at the moment, so you may want to increase the budget for phone calls and decrease it for web leads. You can only do this effectively if you have two separate campaigns. Similarly, you probably want to track and optimize conversion rates, cost-per-click (CPC), and other performance metrics separately for calls vs web leads. That's much easier when you have separate campaigns.
When you are doing the campaign setup, you are asked to select the ways you'd like to reach your goal. In almost every situation, you are going to want to pick only one. Here, we have selected getting leads from phone calls.
Networks - Keep them Separate
At the next stage in your campaign setup, AdWords will offer you the option to run your ads on partners search networks and also on the Google Display Network. We recommend that you do not choose either of these options.
Regarding search partners, the problem is that some of these partners provide a different audience than Google. Yet, you cannot bid separately for clicks on the partner networks from the Google network within a single campaign. So, you are forced to bid the same on the partner search network as you do on the Google Search Network. But, is a click worth the same on the partner network? Who knows? It could be worth more, less, or about the same. That depends on the audience and how good a fit they are for your office.
If you really want to try showing ads on the Google search partners networks, then first make sure your campaign is working well and achieving your goals without the search partners. Once you are confident the campaign is optimized for Google search, then you can try turning on the search partners. Make sure to measure the cost per click, cost per conversion, or whatever metric you are using for optimization, before and after turning on search partners. If the performance of the campaign degrades, then turn off the search partners.
As far as the Display Network is concerned, we think that the same logic applies. The display audience is very different from the search audience. Also, the goal of a display campaign is usually different from a search campaign. With display, you are often trying to generate brand awareness and traffic from clicks. On the other hand, a search campaign is usually more focussed on lead generation or sales. As a result, the value of a click could be very different in coming from a partner website on the Google Display Network compared to the Google search results page. Because of these differences, you should measure and optimize ads on the Display Network separately from the Search Network. It is much easier to do that if the ads are running in separate campaigns.
Location targeting in AdWords has become very powerful. As Google states:
AdWords location targeting allows your ads to appear in the geographic locations that you choose: countries, areas within a country, a radius around a location, or location groups, which can include places of interest, your business locations, or tiered demographics.
In addition to specifying locations, you can also exclude them. So, for example, if you are an online retailer in the US and you only ship to the contiguous 48 states, you can include the United States and exclude Alaska and Hawaii.
When setting the Location, be sure to also check the Location options. By default, the Location options are set by Google to show ads to people who are interested in your location, as well as physically in your location. If you are a Bed and Breakfast, that might be fine - you want people who are planning a vacation in your location to see your ad. But, if you are a gym, then you probably want to be advertising to people who live in your area. If, like the gym owner, you want to show ads only to local people, then set the Location options to target "People in your targeted locations".
Check on Your Locations
In order to make sure that your Location options are working as expected, you can get a report from AdWords showing the locations where your ads have been shown. To see your User Location Report:
- Select your campaign.
- Select "Locations" on the side menu.
- Select the "Geographic Report" tab at the top.
- From that tab, select "User location report".
By default, the report shows you the countries where your ads have shown. But, you can drill down to see more granular locations. Here's a video that shows how to open this report.
It is very important to review this location report occasionally to make sure that your ads are showing in the regions where you want them to be seen. If a location is over- or under-represented, you can make location bid adjustments to rebalance. For example, if you are running ads in the United States, Canada, United Kingdom, and Australia, and you notice that Canada is contributing more than 50% of the clicks, you may want to enter a bid adjustment of -20% (or more) to reduce the clicks coming from Canada.
Besides controlling how much you spend on a campaign, the budget is key to allocating advertising spend to support business objectives as they evolve over time. For example, a clothing retailer may have one campaign for "Swimwear" and another for "Fall Fashion". Starting in early July, this company would probably start shifting budget out of "Swimwear" and into "Fall Fashion" to support the new Fall clothing lines.
The ability to control budgets also affects how you structure campaigns. We recommend that you place ads designed for generating phone calls in a separate campaign, "Lead Gen - Call" from ads designed to convert web visitors by filling out a form on a landing page, "Lead Gen - Web Form". This structure enables you to allocate budget to the most effective channel. Perhaps calls are found to be better leads that convert at a higher rate than web forms. Then you can increase the budget for "Lead Gen - Call" and decrease the budget for Lead Gen - Web Form" - keeping your total spend the same, but focussing more of that spend on generating calls.
Determining an Initial Campaign Budget
It's all very well and good that campaign budgets can be adjusted to allocate resources in support of business goals, or optimize performance, but how should you determine the initial budget for a campaign?
For lead generation campaigns, start with your business objective. Let's suppose that you want to generate 10 new customers per month. And, say that you think that about 1 in 10 leads will close. That means you need 10 x 10 = 100 leads per month from your campaign to achieve your objective.
Next, you need to think about how many clicks (roughly) it takes to generate one lead. Suppose you have a landing page with a form that your ads will send traffic to. You can take a guess that about 1 in 3 clicks on your ad will result in completed landing page forms. So that means you need 3 x 100 = 300 clicks per month to meet your goal.
Lastly, you need to estimate how much each click will cost. Head over to the Google AdWords Keyword Planner to estimate how much you will need to bid on the keywords that you want to use in your ad groups. Let's say that the Top of page bid for your keywords averages around $5.00. You total budget should be $5.00 x 300 = $1,500 per month.
Reducing the Budget Guesswork
As you can see, there is a lot of guesswork and estimation that goes into calculating your initial campaign budget. Once the campaign has been running a while, you will start to put some hard numbers on these estimates for conversion rates, click through rates, and bids. You will also start optimizing all these numbers. For example, you will improve your conversion rate by focusing on the most productive keywords and tweaking your landing page. You will lower your cost per click by finding the lower cost long-tail keywords that work the best. Within a few months, you will have a much better idea what budget is needed to produce 100 leads per month.
Many people minimize the guesswork by simply starting with a small budget at first. This approach allocates a couple months for experimentation so that you find out which keywords and landing pages work best; what the conversion rate is likely to be; and how much you need to bid. Once the small budget campaign is working effectively, the budget is increased to achieve the business goal.
An advantage of this kind of experimentation is that you waste less money and you don't prematurely give up on a campaign. It often happens that your estimates are way off and your initial campaign setup is very inefficient. But after a couple rounds of optimization, the campaign may start working very well. So, make mistakes on the small budget. Don't give up to soon. And when everything falls into place, ramp it up.
A bidding strategy is set at the campaign level. Although AdWords used to allow you to override your campaign level bidding strategies at the ad group and keyword levels, since November 2017 that is no longer possible. A single bidding strategy applies to the entire campaign. However, you can often adjust strategy parameters at lower levels. For example, if you select Manual CPC bidding as your strategy, then you set a maximum bid at the campaign level and can override that bid in your ad groups and at the keyword level. Similarly, if you select Target CPA as your strategy then you set a target (say $30) for the cost of a conversion at your campaign level. But, you can override that in an ad group. For instance, if you have a branded keyword ad group, where you know that the CPA will be much lower, you could adjust the target down to $15 for that ad group.
When you are setting up a new campaign, AdWords will recommend a bidding strategy based on the campaign goal settings that you selected. For example, if you selected the Leads goal (for a lead generation campaign), then Google will suggest that you use the "Maximize conversions" bid strategy.
Google is suggesting that you let AdWords automatically adjust your bids to maximize the number of conversions that your ads generate. In order to implement this strategy, you will need to have conversion tracking set up in AdWords. Let's suppose that you do have conversion tracking working. Is it a good idea to let AdWords manage our bids to maximize conversions?
Automated vs Manual Bidding
If you selected an automated bidding strategy (e.g., Target CPA, Target ROAS, Enhanced CPC) at the campaign level, then you will not be able to change that strategy and adjust individual keyword bids within your ad groups. If you try, you will see a message like this one indicating that bidding strategy cannot be changed at the ad group or keyword level.
For this reason, some people argue against using automated bidding. There are two good arguments against it. First, automated bidding puts a lot of trust in Google. They already control the bid market, and now you are also giving them control over your bid price. But, if Google controls the bid prices for everyone in the market, what prevents the prices from drifting every upward? I'm not saying that there is any funny business going on here, but it is certainly a possibility.
Second, when you select automated bidding you stop learning about aspects of customer behavior that might be important to your success. For example, you may miss noticing that certain keywords are producing a much lower CPA than others. Information like that can help you better understand your ideal customer.
For a good article on automated bidding strategies, including the pros and cons, check out this blog post by Jon Part from AdHawk. For the other side of the argument, see this post by Pete Bowen who states that his current experience shows "Google’s automated bidding beats our human management every time."
While the debate goes on, many people still prefer not to use an automated bidding strategy. They want the flexibility of being able to adjust bids at the ad group or keyword level. If you select Manual CPC bidding at the campaign level, then you can override the maximum bid set at the campaign level. For example, if you have set the maximum campaign-level bid as $2.34 and you have an ad group with higher value keywords, then you can set your maximum bid higher for that ad group. You can also specify a percentage increase or decrease for your bids in that ad group.
The key to setting up campaigns effectively is understanding your business needs in the five areas that define an AdWords campaign:
- Network (e.g., Search, Display, Video)
- Advertising Goal (e.g., Leads, Traffic, Phone Calls)
- Bidding Strategy
If your business needs to reach audiences on both Search and YouTube, those needs should be addressed by separate campaigns. Similarly, if you want to be able to adjust the advertising spending mix (budgets) between two different product lines, then each product line should have its own campaign.
It may seem like a lot of work at first, but well-defined campaigns will save your time and money in the long term because you will be able to adapt to the changing needs of your business and optimize how your advertising budget is spent.