Google Ads And The Question On Return On Revenue

Google Ads : Today there are many external tools to acquire more activities on a website. For example, we can use social networks, deploy e-mailing campaigns or use the tools made available by search engines. It is on this last point that we will focus and more precisely on the possibilities offered by Google Ads.

The Principle Of Google Ads

Google Ads includes several possibilities, but overall the tool works via three axes:

1. User. Indeed, the first actor is simply the site using the tool. It is a question of determining what you want to highlight (product, service, event, etc.) and how you want to present it. Here we are referring to the ads that you can see during a Google search.
2. The Internet user. This is the 2nd important cog in the Ads mechanic. To display the ads you have made, there must have been a search. It is therefore necessary to determine the expressions sought by Internet users who will make your ads appear.
3. Competition. Indeed, competition plays an important role in the logic of Ads campaigns. It is partly this one that will determine the amount of clicks and it will be necessary to succeed in carrying out an effective campaign to be in the first ads, the place at the top of the 1st page being restricted.

It is mainly these 3 axes that will have to be worked. But for what purpose? What are your goals through this tool? Can we measure the returns? Finally, is it worth the cost?

Campaign Objectives

Like any advertising campaign, whether on a screen or on a billboard, Ads campaigns are a cost. Of course, you set your budget. If you want to put 100 € per month or 1 000 € it is quite possible. But, concretely, what does such a campaign bring you?

Visibility

This is the first advantage of Ads. This gives you almost immediate visibility into the terms of your choice. Your visibility will vary depending on your budget of course. If there are more searches and clicks than your budget allows, you won’t have 100% visibility. However, whatever your budget, it will only be spent if your ads are clicked, so you can rest assured that your budget spent brings you visits.

What’s more, if it may not be obvious to be naturally visible on competitive searches, this tool brings you an effective solution to overcome this.

Conversion

Being visible is an important point. This brings activity to the site every day and therefore gives you more chances to present your services. But when a music group presents its new songs on the radio, it’s not just for the pleasure of our ears. It is mainly to present us with a new product to buy. This logic of course applies to Ads. Visibility is not an end in itself. The final desire may therefore be to receive a contact form, a call, a subscription to a newsletter or a purchase if the site is an e-commerce site. Therefore, it is legitimate to ask: is Google Ads profitable? How much does a conversion cost?

How To Consider ROI?

The answer to this question is not obvious and is based on several points to take into account. In order to have a good visibility on the tool, it is important to get closer to the average click cost offered by Google. It is quite possible to have a cost per click of $ 1as $ 3.

If we consider an average of 10 clicks per day over 30 days, the monthly budget to devote is $ 300 for one and $ 900 for the other. In both cases it represents a budget but it is important to put it in parallel with the services offered. It will be quite relevant to put a large budget in Google Ads (depending on the average CPC) if the services also require a significant investment from customers.

Generally, the conversion rate (i.e. the share rate that has been determined as relevant: purchase, contact, registration, etc.) is between 2 and 5%. Of course, campaigns can outperform with a rate above 5% or conversely underperform with a rate below 2%. Let’s keep in mind an average rate of 3.5%. On 300 clicks, this corresponds to a dozen conversions. 

To know if this is profitable for you, it will therefore be necessary to make the parallel with your average basket. If a customer spends an average of $ 1,000 of services for example, a single conversion that led to a purchase in the month while you spent $ 300 will allow you to consider the rest of the campaign more serenely.

It is necessary once again to study this on a case-by-case basis because it is of course necessary to take into account for the return on investment your own costs other than those of the Ads, your margin, etc.

All in all, an acquired customer is therefore not necessarily profitable on his first basket (whether we sell products or services). Sometimes it is better to consider the reality, which is that an acquired customer represents income over 3-4 years.

We can then consider a CPA (cost per acquisition) that we put in front of a realistic ROI.

It should be noted that some beneficial effects of an acquisition are difficult to quantify, such as the possibility of working on the customer base thus constituted by direct marketing actions (typically: a newsletter during gift periods for e-commerce).

Of course this is an example and each company has a unique situation. The average baskets of customers vary enormously depending on the companies going from literally several tens of euros to several thousand for some.

A study of the situation and the market will be necessary to determine the right levers to activate.

Conclusion

As we have seen, Google Ads offers a relevant tool both in terms of visibility and sales force, acting as a real business provider. However, it will be necessary to carry out a study upstream in order to learn more about the market (average cost of clicks, average monthly search, etc.) and put it in parallel with your budget and your objectives. In order to take stock of this issue if you are interested, it would be relevant to contact a web agency so that it accompanies you and offers you a solution adapted to your situation. Do not hesitate to contact us if this article will arouse your interest in Google Ads!