I think a lot of people look at Adwords, here a lot of success stories from people and how much money they are making. They have a go at it themselves, end up losing some money and don't come back. But that's the completely wrong way to go about it. These success stories didn't start making money straight away, they had to test and optimise strategies to see what worked.
Lets start of by clearing this up, starting out with Adwords for your 1st time you will lose money. We all do, and it's part of the process. If you lose $100 to make $100,000 later on when you have built a successful campaign it really doesn't matter.
I suggest compiling a list of say 100 keywords, you can do more or less but we just want a decent size to sample so we can see what works and what doesn't.
I also only set my keywords to exact match in Adwords so they look like this
- "Exit Intent Pop up Notifications"
- "exit Intent"
and so on, you always want your target keywords enclosed in quotation marks otherwise you are doing broad match which means you will show up for on of the related keywords. Exact match is always the best way to go when starting out.
Then we are going to set up a campaign at $20 per day, run it for 10 days targeting your keywords.
- Target 1st world countries
- Put bidding to 50% less for mobile
- set up 5 different ads for each campaign (google will automatically optimise the highest performing ads for you.
Now we just need to set the campaign to active and let it run for 5 days.
This should allow us to collect some decent data, but it really depends what you are selling. If you are selling $4999 training courses, you are probably going to need a larger ad budget to actually assess trends in your conversions.
Set a reminder to come back to adwords in 5 days
Once the ads have been running for 5 days, we can see which keywords are performing and which ones aren't.
At this point, the only metric I really look at is Cost Per Conversion. My company is SaaS meaning it's subscription based (this works insanely well on Adwords) so it need to work out my customers average LTV - which is the average revenue per customer, per month.
for example, if my customers average subscription length is 10 months, and the average monthly charge is $39. The average customer LTV is $390. Of course, that's not pure profit, I have businesses expenses which as a business owner you should have a rough idea of the expenses per customer. Just to keep it simple, lets say $200 of the $390 is profit. That means, on average I can spend up to $200 to acquire a user and I will make the money back (after 10 months), but of course I don't want to be spending $200 to acquire each new user, so I try to set my target Cost to Acquire to the equivalent of the 1st months subscription. In this case $39.
That means when the customer does convert I have to wait for the money to clear, through my payment processor but after than I can invest it straight back into advertising, and every time the customer renews after that it's pure profit for the business. Seeing as our average LTV is 10 months, I'm receiving a 10x ROI for each customer we acquire.
so now, we need to review our keywords that we have been bidding on for the past week and remove anything that's above our target Cost to Acquire. I will exercise a bit of flexibility depending on my ad budget and how quickly I would like to acquire users.
for example, some keywords I bid on can acquire users for $6 average cost to acquire, where as other cost $40-50. I will continue to bid on all keywords where average cost to acquire is $0-45 and all other keywords I will pause.
Assuming you have done this all correctly, and you are now paying less that your customer LTV to acquire a new user, then congratulations! your are now running a profitable adwords campaign that will drive growth for your business!
So now we know which keywords we are able to profit from lets up our budget from $20/day to whatever you can afford. I usually go in this order, Testing = $20 or $50 per day. Once I have successful keywords, upt to $100 per day for another week, keep an eye on conversions/cost to acquire as well ass remove anything that isn't converting, we can look at location and device type and remove anything that isn't below our target cost to acquire. Once we've done another 7-14 days at $100 per day I'll go up to $250/day for 5 days, assuming all is still going well put up to $500 then $1k per day. The largest I've scaled a campaign to is about $1.5k per day and that was because we were targeting all traffic for our keywords so it could not scale further.
at this point, you can either ad more keywords in a new campaign and repeat this process to clean out the non-profitable keywords and then scale up from there
Remember, the more money you spend the more data you collect meaning the more accurate it will be. If you are spending 1.5k per day you'll be collecting a huge amount of data on which keywords/phrases are converting the best and you can look to add similar/related phrases. and of course, anything that doesn't fall into our target cost to acquire we remove from the campaign as it's losing us money.
What to lookout for?
Now you have a successful campaign running, there's a few things to watch our for (I've learned this the hard way)
Things can change, you should review your keywords every 7 days to ensure you are still profiting from all of them.
If your server goes down, remember to pause your ads/turn them off (you don't want to spend $1.5k per day to send users to a blank page)
How to maximise your investment
So now rather than optimising your adwords campaign, lets look at other areas that can be optimised to maximise your ROI.
Conversion Rate Optimisation - The reason I built Notifia is to help marketers maximise conversions, exit intent, social proof, eMail collecting, Triggered CTAs, prompt messages and demo scheduling are all PROVEN methods to increase conversions which is why I built this. If you are spending money on ads, you want to maximise your chances of converting users with tools such as this.
Maximise your LTV - Remember the customer Lifetime value we calculated earlier? That my average customer will spend $390 with me over a ten month period. Well what if you got them to continue for 12 months? 18 months? 24 months? This is going to have a huge impact on revenue, as a SaaS company you should always be looking for ways to maximise customer LTV.
At Notifia, I try to do this in several ways.
Listening to customers - Make your customers feel valued, listen to them take feedback on board and listen to their complaints (this is a valuable source of information) that you can use further down the line to improve your product/service and increase LTV.
Building new features - I'm constantly rolling out new tools for our users, I have a very simply and straight forward strategy. I'll have an idea or build a feature suggestions, I'll test the Idea live on Notifia and if we see positive result we will release it to our users.
providing an awesome service - This really doesn't need explaining. Provide the best possible service you can
beating our competitors - Don't let this happen, I believe a great way is to look for your competitors weak spots. Look for complaints, reviews or tweets about your competitors and see what their customers complain about. If you spot a trend, make sure you don't fall into this same hole. You could even invite the users complaining to your alternative service