Google Ads (AdWords) Setup & Optimization

Google Ads (or AdWords) is an advertising platform provided by Google.

Advertisers can place ads (including keyword ads, display ads, video ads, etc) through Google Ads.

Ads through AdWords are paid through pay per click (PPC) or cost per click (CPC) based.

Google AdWords? Or Google Ads Google Ads used to be officially and commonly known as AdWords (or Google AdWords), but since 2018 it was renamed Google Ads.

Google Ads Setup & Optimization

Setup and Optimization

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Setup Phase

Set Up Account Structure and Search Campaigns

For example, the keyword ads are displayed on Google search engine results pages (SERP) above organic search results (i.e. SEO) and on different Google partner sites that show/syndicate search results.

Google Ads Above the Fold

The ads can be set to appear in only specific geo locations or all locations (i.e. the entire world).

Google AdWords account structure

You always have to set up your Google Ads account with 4 levels:

  • Account
  • Campaign
  • Ad Group
  • Keywords and Ads

Campaign

In Google Ads, we are given the options to launch campaigns for:

  • Search: Let people find your ads using keyword searches.
  • Display: Have your ads displayed across different websites on the Internet.
  • Shopping: Show your ads on Google with Shopping ads (which has formats that are different to search campaigns).
  • Video: Show your ads to people who are watching videos on Youtube.

In this case, we start with focusing on search campaigns.

Your objective is to get people to search for your ads by entering keywords into Google search. This has always been the “pull” method, as people are actively searching.

Unlike other less effective online advertising channels such as display ads where people are forced to view an ad when they were actually doing something else on a website.

For each campaign (in Google Ads), you need to specify the scope of your ads. The campaign level lets you set your geo location targeting (i.e country, region, city, etc) of your ads.

Campaign Targeting One Location

With a local business, usually you should only set the location targeting of your campaign to a single country, region, or city such as Hong Kong.

Campaign Targeting Multiple Locations

When your business provides services to multiple locations across a country, you can specify to target each of locations all within one campaign. For example, Los Angeles, San Jose, etc.

Google Ads target countries

For an international business where the potential customers are located across multiple countries or regions, you can target each of the countries all within a single campaign. For example, Australia, United Kingdom, South Africa, etc, etc, where the common language in all these countries is English.

When you select the locations, Google would show the “reach” each location. The reach is an estimation of how many people are in, or interested in, the location of your selection. The numbers are based on the number of people visiting Google’s sites.

Setting your ads to show only to certain limited locations is a great method to save cost / advertising budget.

Build the Keyword List

You want people to search your keywords on Google and then your ads show up. But what are your keywords?

Use your product names and brand names as keywords. This is one quick way to get you a list of keyword to start your Google Ads. However, this may or may not be exactly how your audience/customers search.

Run a keyword research with keyword tools. This requires spending some time to dig out the right keywords. You can use a keyword suggestion/research tool such as Google’s Keyword Planner which is Google’s official keyword tool.

  • https://ads.google.com/home/tools/keyword-planner/

You’ll have to login to your Google Ads account to access the Keyword Planner.

Or you can keyword suggestions from one of the free or paid keyword tools available out there such as SEMRush, Keyword.io, KWFinder, etc.

Let’s say one of your main products is “green widget”. You will enter this keyword into the keyword tools, and they should return a list of keyword suggestions that are related to your main keyword. For example:

  • cheap green widgets
  • best green widget
  • widget with green edge
  • green widget for small business
  • green widget in hong kong
  • green widget cost

Usually many keywords from the suggestions would be relevant to your business, but there are always some keywords that do not relate to your business. You obviously do not want to spend budget advertising on unrelated keywords, and will remove the unrelated keywords from your final keyword list.

In the optimization phase, you will further modify your keyword list.

Set Up Keyword Match Types, Ads and Ad Groups

Keyword match types

In Google Ads, when people search your keywords usually your ads should appear on Google. Keyword matching gives you more control over when your ads should appear.

Google’s keyword match types include:

  • Broad match keywords
  • Broad match modifiers
  • Phrase match keywords
  • Exact match keywords
  • Negative match keywords

For example, a keyword in broad match can trigger your ads to show more often than the same keyword in exact match. Broad match keywords allow your ads to reach more people, but exact match keywords can show your ads to higher specific customers.

The best keyword strategy

Why is keyword match types important?

With keyword matching, you can apply a keyword strategy to effectively reach your target audience. But at the same time you can still keep your advertising cost relatively low.

When choosing the appropriate match type for a keyword, we typically recommend using a broad-to-narrow strategy.

With your best keyword strategy, start with broad match keywords (which are the default match types in Google AdWords) to maximize the reach of your ads to most/all your target customers through their keyword searches.

In the optimization phase, you’ll start narrow down the reach, and that’s when you optimize your advertising cost but without sacrificing conversions.

Broad match keywords

With broad match, ads may ads may show on searches that include misspellings, synonyms, related searches, and other variations.

Broad match is the default match type in Google Ads, and is represented by the keyword itself, without any [] or “” symbols, such as:

women running shoes

When your keyword is women running shoes, and someone searches for the following, your ads may show:

buy ladies running shoes
women tackies

Broad match modifier

Broad match modifier is similar to broad match, except that it only shows ads for keyword searches that include a plus sign “+” in front of them (e.g. +women shoes), or for keyword searches that is close variations of the “+” terms.

For examples, when your keyword is +women +shoes, your ads may show for keyword searches that contain:

women running shoes
ladies running shoes
women tackies

Phrase match keywords

A phrase match keyword matches the phrase or close variations of the phrase with additional words before or after. Close variations also include terms with the same meaning.

Phrase match keywords are designated with quotation marks e.g. “women shoes”.

For example, when your keyword is “women shoes”, your ads may appear for keyword searches that contain:

"pink women shoes"
"buy shoes for women"
"ladies shoes on sale"

Exact match keywords

An exact match keyword matches the term or close variations of that exact term with the same meaning.

Exact match keywords are designated with square brackets e.g. [ladies shoe]

For example, when your keyword is [women shoes], your ads may appear for keyword searches below:

[women shoes]
[shoes women]
[ladies shoes]
[shoes for women]

Negative keywords

When your campaign consists of mostly broad match keywords, you can use negative match keywords to exclude some searches, so your ads won’t appear on searches that aren’t entirely relevant to your business/products.

A negative keyword is designated with a minus sign e.g. ladies -heels.

Ads and ad groups

When you add keywords and ads, you are adding them to ad groups. When you have 3 keywords and 2 ads to a single ad group, the ads will be eligible to show on Google once someone searches for one of the keywords, or the search queries that can be matched to your keywords.

Let’s use the two following ad groups as example.

Ad group #1: Nike shoes

  • Ads N1, N2
  • Keywords N1, N2, N3

Ad group #2: Adidas shoes

  • Ads A1, A2
  • Keywords A1, A2, A3

When someone searches keyword N1, it may trigger ad N1 or N2 to appear, but it won’t trigger ad A1 or A2 to show on Google. This means in ad group #1, you are testing and rotating two ads (i.e. N1 and N2) against the 3 keywords.

Set Campaign Budget and Ad Group Bids

Campaign budget

You are required to set a maximum daily budget on each of your campaigns. The maximum daily budget is a “cap” or a “safe switch” to ensure your Google Ads account won’t spend more than you have expected.

For example, you have 3 campaigns in your Google Ads account, and you have set the maximum daily budget as such:

  • Campaign #1: $100
  • Campaign #2: $50
  • Campaign #3: $100

Technically, this setup should usually ensure your total spending for the day not exceeding $250. In a month of 30 days, your total monthly spending will not exceed $250 x 30.

In a few days of the month, the daily spending may slightly exceed the cap of $250, and may have gone close to $260. Because of this, in other days you will see Google Ads adjusts itself by under spending to perhaps $240, $241, $245, etc.

Ad group bids

Google Ads is a bidding-based advertising program. One of the key factors that determines the ranking of your ads on Google is the maximum CPC (cost per click) of your keywords.

You can specify the maximum CPC for each keyword but can be very time consuming in the beginning and will be very difficult to manage at later stages.

Or you can quickly specify a maximum CPC for each of your ad groups.

When starting any new campaigns, the best practice is to set the maximum CPC on each ad group.

Set Up Analytics and Conversion Tracking

The setup of analytics tracking is the prerequisite for your optimization stage i.e. You can optimize your budget spending based on conversion performance (i.e. sales or leads).

Tools: Conversions (AdWords)

To enable conversion tracking, go to Tools.

Conversion Actions

On the next screen, create a new conversion action by clicking the “+” button.

Set up the conversion tracking code

4 Conversion Types: AdWords

You are given 4 options when setting up conversion actions.

  • Website: Track sales and other actions on your website.
  • App: Track app installs and in-app actions.
  • Phone calls: Track calls from your ads or your website.
  • Import: Import conversions from another system including Google Analytics.

In this case, select Website.

Select a category for your action:

  • Purchase: A person buys your product or service.
  • Lead: A person interested in your product or service shares contact information.
  • Page View: A person views a particular page on your website.
  • Sign-up: A person registers for an event or newsletter.
  • Other

With a contact form on your website, you should select “Lead”.

Under conversion name, enter a conversion name.

Under Value, select “Don’t use a value for this conversion action”. In this case it is for a contact form successful submission, so you don’t have to assign any value. Usually only eCommerce sites would have to assign a value (such as product price).

Under Count, select “one”. This is about how many conversions to count per click (or interaction) on your thank you page. You only need to count the first interaction of a person.

With default settings, the conversion window is for 30 days, and the attribution model is “last click”.

Click the “Create and continue” button.

The conversion page (or thank you page)

Identify the conversion page URL on your website, which should be a HTML web page.

For example on your small business website, you may have a contact form. After a visitor completes filling in the contact form and click the submit button, he/she would be taken to a thank you page. This thank you page is the conversion page, and the page’s URL is the conversion page URL.

  • www.example.com/thank-you.html

Add the code

You have two methods to install the conversion tracking code to your website.

  • Add the code (as it is) directly to your website.
  • Add the code through Google Tag Manager (GTM).

Let’s add the code directly to your website. The code has two parts. The first part should be added to all the pages. The second part should only be added to the conversion (thank you) page.

You should already have Google Analytics installed and tracking your website. In this case, you may already have the “Global Site Tag” version of Google Analytics tracking code installed.

For the first part, all you have to do is to include this one line of code within all instances of your “Global Site Tag”.

gtag('config', 'AW-XXXXXXXXX');

For the second part, add the code below to only the thank you page.

<script>
   gtag('event', 'conversion', {'send_to': 'AW-XXXXXXXXX/W3dtCMKN-acBEI-z94ED'});
</script>

Optimization Phase

Run the Google AdWords Reports

You have been spending through Google Ad. You should run some reports and review them carefully.

You can view reports on a few different levels:

  • Campaign performance report
  • Ad group performance report
  • Keyword performance report

The following is an example of report that shows the performance of keywords.

Keyword Performance Report

In each report, you will need to go through the following metrics:

  • Impressions
  • Clicks
  • CTR (i.e. Click through rate)
  • Average CPC
  • Cost
  • Conversions
  • Cost per conversion
  • Conversion rate
  • Average position (for a keyword)

When you also have conversion tracking set up properly, in all the reports you will see exactly which campaign or which ad group or which keyword have brought how many conversions.

This is only the first step in the optimization stage.

Evaluate the Cost, ROI and Conversions

This is a process that you should go through. The goal is to optimize your Google AdWords return on investment (ROI) and/or net earning.

After you have properly set up conversion tracking for your Google Ads account, and once visitors to your website have started to submit through your contact form, you should start seeing values showing up in the conversion column of your Google Ads reports.

The conversion metrics

For each campaign, each ad group, and each keyword, you can see the following conversion data.

  • The number of conversions
  • The conversion rate (CR)
  • The cost per conversion (CPA)

You can also see the cost for each campaign, each ad group, and each keyword.

Calculation of ROI and net earning

Let’s go through the ROI calculation with an example.

For a specific week, campaign #1 has brought in 5 conversions with $8,000 sales revenue, and campaign #2 has brought in 5 conversions with $1,000 in sales revenue. All your campaign brought in a total of $9,000 sales revenue.

The cost of campaign #1 is $2,000, and the cost of campaign #2 is $2,000.

For campaign #1:

  • Net earning = 8,000 – 2,000 = 6,000
  • ROI = 6,000/2,000 x 100% = 300%
  • Campaign #1 is a money making campaign.

For campaign #2:

  • Net earning = 1,000 – 2,000 = -1,000
  • ROI = -1,000/2,000 x 100% = -50%
  • Campaign #2 is a money losing campaign.

The goal is to maximize your net earning, so your action could be to:

  • Add budget to campaign #1.
  • Reduce budget from campaign #2, or stop campaign #2 from spending.

The above is the method to maximize earning through budget re-allocation based on each campaign’s performance (i.e. ROI or earning).

But you can also do budget re-allocation based on ad groups or keywords, when you have each ad group’s and/or each keyword’s ROI & net earning data.

What is the right frequency?

How often you’re to run this process, depends on your advertising budget size, and how complicated your campaigns are.

  • Some Google AdWords specialists would review reports everyday and optimize on a very micro level.
  • Other Google AdWords managers may have time constraints and could only review the performance data once a week or once every two weeks. This will lead to less frequent optimization.

Optimize with Keyword Match Types and Search Terms

This is a process to reduce cost but to still keep the conversions coming.

When you begin running ads, you are most likely using many broad match keywords.

The broad match keywords were good help in the very beginning when you didn’t know what people are searching for exactly. They help you to reach more target audience in the early stage.

But running a full broad match campaign is very cost consuming.

Through using broad match keywords in the beginning, you can figure out exactly what people are actually searching.

One best practice is to run the Search Terms report.

The Search Terms report reveals exactly the “search terms” people search to trigger your ads to appear. Especially you will be very interested to know what the keywords are that have brought conversions.

Your action is to create a new campaign. Import all the search terms (and especially the search terms that have brought conversions) to this new campaign as exact match keywords.

You would gradually slow down the spending of the original campaign which are fully loaded with broad match keywords.

Using AdWords Express, or Not?

The strategies and methods that were mentioned above are for the setup and optimization of Google Ads (AdWords) Standard version.

Some small business owners (who are also new to advertising on Google Ads) when first signing up Google Ads, they may be directed to the Express version of Google Ads.

Is AdWords Express for beginners? Yes it is.

But when you’re to run campaigns that you will be regularly optimizing, you should skip the Express version and go directly to the Standard version.

You shouldn’t be using Google Ads Express version (or AdWords Express). It is a version which has many of the original functions removed.

The Express version is for people (i.e. advertisers) who has zero to almost no previous experience using Google Ads (Adwords), but are in urgent to quickly launch an advertising campaign (on Google), and do not really care about optimizing their advertising campaigns for performance or results.

AdWords Express is suitable for advertisers who have no key performance indicators (KPI) attached to their advertising campaigns, and simply aim to do branding for their businesses.

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