TSS043_How to work out my Google AdWords spend

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Series: Google AdWords

Cohost: John Curtis from Reach Local

Series Overview.

In my experience of owning a company that builds websites for tradies and contractors, over the years I’ve observed a number of scenarios where people may be familiar with a certain phrase, or word by it’s name, however they’ve lacked a true understanding of what that word represents.

A prime example of that would be websites. Very often when we scope a company, I’ll be told that they need a website because they want to make their phone ring more.
Having a website will help in the sense that now you have a tool that can allow youth be found on a search engine in a direct search, however it’s unlikely that it’s going to make your phone ring unless you apply a marketing strategy to the website.

Another very misunderstood ‘buzzword’ is AdWords.
In this series, I’m joined by John from Reach Local as we shoot to break down the myths around Google AdWords and paid marketing. We explore what types of business AdWords suites and we discuss the reality of how much money you need to be spending to make your campaigns affective.
We also discuss how paid marketing (also commonly referred to as SEM and Pay-Per-Click) fits into what I like to call the ‘digital ecosystem’.

Episode 2: How to work out my Google AdWords spend

In Episode 2, John and I explore one of the more misunderstood elements of Google Adwords. That being budget.
Contrary to what you have have ben told by dodgy marketing companies that are only interested in taking your money, your potential results are very dependant on budget.
A smarter way to look at how to ascertain what you need to spend on a campaign is to reverse engineer it. Here is a couple of examples.

With a $20 cost per click (CPC)

  • If you need 10 jobs per week
  • Lets say you convert 50% of the calls you receives in to a job
  • If the website converts clicks to calls at 10%, you’ll need 200 people through to site in a week (200 clicks)
  • At $20 cpc, that would be $4000 for that week, which is $16000 for the month
  • Equalling a $400 cost per conversion
With a $2 CPC:
  • If you need 10 jobs per week
  • Lets say you convert 50% of the calls you receives in to jobs
  • If the website converts at 10%, you’ll need 200 people through to site in a week (200 clicks)
  • At $2 cpc, that would be $400 for that week, which is $1600 for the month
  • Equalling a $40 cost per conversion

 

You can see from these examples that it can be an expensive outlay and if your conversion costs are greater than your product, or service cost, then you should potentially spending that money elsewhere.

If you need some help with Google Adwords, you can connect with John and his team at this link.

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