What happens if you choose the wrong metrics?

Google AdWords – How does it work and How to use it?

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In the space of Digital Marketing, Display ads and Search ads, Google AdWords holds a high importance. It is very effective if you do it Correctly. The key to how Google AdWords works is the Quality Score. Quality Score is generally how well an ad group, keywords, ad and landing page relate to what a person is searching for, and how likely someone is to click on the ad. Here is Google’s page for “Check and understand Quality Score.” Now let’s get into some basics and learn how Google AdWords works.

What is Google AdWords?

Google AdWords is an online advertising service where advertisers pay to display brief advertising copy to web users. It is Google’s own advertising service through which you can place search results for your website on a search engine results page (SERP) by paying for them. Earlier, New sites needed to wait a lot to increase their ranking organically. Now with AdWords, you can see immediate results in your ranking and conversion goals.

Paid Searches

Broadly speaking, paid search marketing is, as the name suggests, when you pay to get search results. Those search results which have been displayed under caption “Ad” for some specific search query. For these type of searches, a user needs to pay Google some amount of bucks based on PPC, CPC, etc. campaign running under Google Adwords. These paid results are always displayed above the organic results.

How does Google AdWords work?

Suppose you are an entrepreneur or have a business, you will have some specific, highly relevant keywords to your particular business. These keywords or phrase are those queries which a searcher puts in a search engine to find you. There are a lot of other business/companies with the similar keywords competing for the search result. Now, what basically happens is that you bid for those keywords in Google AdWords. The whole process goes through an auction within a fraction of seconds and winner’s ads are shown on top of the results.

Understanding auction process

Now every time someone does a search on Google, an AdWords auction is created. Every advertiser who has a keyword match to the search query competes in the auction. How well each advertiser competes is based on their Ad Rank. Again, using a slightly simplified version:

Ad Rank = Quality Score * Bid

Ads are placed in order based on Ad Rank. The highest Ad Rank gets the top spot and so on down to either the last ad qualifying for the auction or the last position on the page.

Bidding price is the highest amount an advertiser is willing to pay. But, in reality, What an advertiser actually pays is the lowest amount necessary to beat the Ad Rank of the competitor below them. You can learn more on best bidding Strategy and practices in our upcoming blogs.

Do you pay exactly what you bid?

No, Bidding price is the highest amount an advertiser is willing to pay. But, in reality, What an advertiser actually pays is the lowest amount necessary to beat the Ad Rank of the competitor below them. For a winner, it is always less than what he bids for. In a nutshell, if you have the best Quality Score, you control the auction unless others outbid you. You can learn more about how final bidding price is calculated and how much a bidder actually pay.

How to use Google AdWords effectively?

  • Know the Basics
  • Define goals for sales, traffic, subscriptions and accordingly deploy your budget.
  • Negative keywords are must avoid, focus on marketing keywords.
  • You need to focus on all levels of your campaign creation:
    • Targeted audience
    • Location
    • Campaign keywords
    • Ad Groups
    • Ad copy
    • Budget adjustments
    • Landing Pages
What happens if you choose the wrong metrics?

How much a bidder actually pay in Google AdWords?

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In our previous blogs, we have learned what is Google AdWords, how does it work and what is a bidding process. Now let’s understand how much AdWords charges a bidder.

We already know that how well each advertiser competes is based on their Ad Rank. Ads are then listed in descending order based on the result of the equation.

Ad Rank = Quality Score * Bid

Now, understanding how Ad Rank is influenced, will make more sense when we learn basics.

What is Quality Score?

Quality Score is a variable used by Google, that can influence both the rank and cost per click (CPC) of ads. To determine the order in which ads are listed, each ad has the following formula run against it: bid * Quality Score.

Why Quality Score?

The purpose of introducing Quality Score is to improve the experience of users who click on paid advertising links. It is reasonable to assume that users who have a great experience when clicking on ads will click on them more frequently, thus increasing advertising revenues for the search engine.

Factors affecting Quality Score

  • Your click-through rate (CTR).
  • The relevance of each keyword to its ad group.
  • Landing page quality and relevance.
  • The relevance of your ad text.
  • Your historical AdWords account performance.

The exact weight of Quality Score versus bid has not been revealed by any of the major search engines, and each company has stated that they reserve the right to continually adjust their ranking methodologies.

Understand how much winners pay?

In a way, understanding this process is the key to really unlocking AdWords.

Let’s understand it with practical examples:

Suppose, Company A has a website named meetironman.com and has a QS = 8. Now, A, participated in a bid for a phrase say, “get iron man caricature”.

Let’s say company A want to show up in the 1st position on the page no matter what. We can’t guarantee this, but we can certainly be pretty certain by over bidding the keyword to say $100/click with:

Ad Rank of A = 800 = (QS 8 * $100 Bid)

To beat A, a competitor (Company B) would have to get an ad rank > 800. This means even if they had a QS10 keyword, they would have to bid $80.01/click to get the top spot. Assuming they have a more realistic bid (generally $100 bid is high enough) of $10/click

Ad Rank of B = 100 = (QS 10 * $10 Bid)

And the amount A would pay in the auction is calculated as follows:

(100 Ad Rank to beat / our QS 8 + $0.01) = 100 / 8 + $0.01 = $12.51

So even though A bid $100, A only pay $12.51.

If Quality Score of A on that keyword in that auction was 10, then the amount A would pay is:

(100 Ad Rank to beat / our QS 10 + $0.01) = 100 / 10 + $0.01 =$10.00

Here’s where it really gets interesting; the person in the top spot could actually pay LESS than the people in the spots below them.

Unexpected, right? Here’s why that happens.

Assume the same crazy $100 bid for the top spot, but now let’s say the next competitor (Company C) only has a Quality Score 5 keyword on a $10 bid, the position 3 (Company D) has a QS 7 keyword on a $7 bid and the position 4 (Company E) has a QS 5 keyword on a $9 bid.

Position 1:

Ad Rank to beat C = 50 = (QS 5 * $10 Bid)

Position 1 pays= (50 Ad Rank to beat / (QS of A) 8 + $0.01) = 50 / 8 + $0.01 = $6.26

Position 2:

Ad Rank to beat D = 49 = (QS 7 * $7 Bid)

Position 2 pays= (49 Ad Rank to beat / (QS of C) 5 + $0.01) = 49 / 5 + $0.01 = $9.81

Position 3:

Ad Rank to beat E = 45 = (QS 5 * $9 Bid)

Position 3 pays= (45 Ad Rank to beat / (QS of D) 7 + $0.01) = 45 / 7 + $0.01 = $6.44

In this example, our QS 8 keyword in position 1 actually pays less than positions 2 and position 3. This same calculation holds true no matter what position you show up in, so the person in position 3 could pay less than position 4 and so on.

If you have a Quality Score 10 keyword, you control the auction.

With a Quality Score 10 keyword, you know that not only are you paying the least amount possible for the position you are getting, you are forcing EVERYONE above you to pay the MOST!

Does live chat generate leads in B2B?

Does live chat generate leads in B2B?

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Can you communicate with the buyers and the vendors in real time using live chat?

So, the answer is, YES!

According to a study conducted by Kissmetrics, 44% of the online users say assert that having their queries answered by a live person during the online purchase is one of the most necessary features a website can offer. Moreover, 63% of them said that they would most likely to return to a website of that kind.

For your business, live chat can give you more leads, more conversions, and customer support. How?

We would be covering that one by one.

Want to attract your buyers?

Buyers in today’s day learn things through the web and go to your website for the desired content.

If you don’t reach out to them in a proper way, they are never going to come back. Maybe some will come later after they have searched the competition but till then you have lost the option to step early into the buying cycle.

You may also lose the opportunity of influencing their judgment process and you may have missed the boat.

Things to keep in mind while adding the live chat

You can’t add live chat as such to your website. The more you make it adaptable to your customers and your requirements. the more benefit you will derive from it.

Broadly, there is three factor that you should customize to make the live chat as efficient as possible.

  • Behavior of your potential customer

    Just by pushing a live chat session to everyone who comes to your website may cause more harm than good. By using complicated rules of engagement, the live chats will grade your potential customers, and they will invite only those to chat who are showing the desired digital body language.

    For example, if they are staying on the page for a definite time period or going to a certain page. For better results, you can also tune your engine by studying the finished chats and feeding the inferences back to the rules.

    Although the subtleness of the digital things is necessary, but you also have to think about the volume. The traffic is never constant on the website and that’s why you have to adjust the chat capacity at a moment’s notice.

    If it goes wrong then you will either miss out on the opportunities or you will waste on the opportunities that could have been easier to achieve.

  • Adjust according to the geography

    Set up the live chat function to suit your customer location. Speak their language and adjust according to their time zones, so that you can have the desired type of service ready.

  • Try to see the bigger picture

    If you want to boost the conversion rates then you can add live chat to your website. It can help you provide the insight into the current trend in the market by analyzing:

    • Chat transcripts
    • Exit surveys
    • Agent exit questionnaire.

The live chat dilemma

Some of the marketers believe that they are facing a dilemma.

They want to automate inbound inquiries for the fear of including sales too early and wasting their resources on poor quality leads. But they have a risk of getting too late to the party.

By providing live chats to the proper prospects we can have an upper hand over others.

Hence, for lead generation in B2B live chat can be used to reach out to anyone who resembles your preference, who is engaged with the content of the company or with whom you are connected. You can participate in an indefinite number of chats as long as both the parties are mutually interested.