You walk into the office one morning, cup of coffee in hand, chatting with workmates and checking your emails. You see an email from your boss and it goes something like:
"I did a couple searches on the weekend and we aren't showing at number 1, I'm really disappointed by this as we're spending thousands of dollars..."
This is a common question that we get asked and if you're running Google Ads for your company, it's likely you'll get asked this too at some point - We want you to have a good response. So see some of our ideas below.
Number One isn't always the best
Google Ads search is best used as a direct response channel that should generate returns for your ad spend quickly.
Focusing on ad position overlooks the true strength of the channel by ignoring performance metrics such as return on ad spend (ROAS); which Google Ads is uniquely suited to smashing out of the park.
Here are a few reasons why ad position is not a great performance metric for Google Ads.
Wrong channel for branding
When we get this query from our clients, they are concerned because of the impact it might have on their brand e.g. their ad appearing below their competitors. We get that. It's just that we don't believe Google Ads Search is the best channel to help your brand determine it's position in the market. There are instances where you always want to be first, for example, for your brand name or branded products.
Aside from that, Google Ads Search is most effective as a form of direct response advertising that generates returns quickly for your spend. By trying to use Google Ads Search for branding, we believe that you'll be missing out on the huge opportunities it can afford you in terms of increasing business profitability by providing a cost effective sales channel with a high return on investment.
Cost is prohibitive
Every advertiser on Google Ads will pay a different price for their ad partly dependent on the ad position. Number 1 position is the most expensive ad position. As a result of this premium ad position cost, it increases your cost per conversion/lead/sale and decreases your profits. As a result, it often (but not always) make better financial sense to be in positions 2-4 depending on your business. When running Google Ads, we want to ensure the campaign runs profitably with a solid return on investment.
Without an unlimited budget and a primary goal of maximum visibility and traffic, efforts in managing an Google Ads account will generally veer towards generating as many leads as possible for your budget. This “sweet spot” is hardly ever at #1, other than for Brand campaigns. It often sits somewhere between positions 2-4 because of the lower cost associated with these ad positions.
Is this always the case? No. You make the call based on how the campaign performs. It could happen that number 1 for a particular niche turns out to be the best. However, generally speaking, we've found that being in that position is not worth the premium price.
Good success metrics
So we've been going on a lot about how ad position isn't the best metric to determine the success of your Google Ads campaign. What are good metrics to use then? What should you or your boss be looking at to determine whether your Google Ads is going well?
- Total sales/leads from the campaign - How many leads or sales did we get some Google Ads? How many people bought something or contacted you? What was the quality of the leads or sales - This requires a bit more analysis in the business but we think it's worth the time!
- Cost of sale from the campaign - Generating sales/leads from direct response campaigns doesn't matter if it's blowing out your budgets and losing you money. What was the cost of each sale? Not just the ad spend but taking into account any management costs?
- Return on investment on the campaign - If you know the average sale value and you have a handle on your costs, it should be quite simple to start getting a good idea of your return on investment. At a basic level, we believe Google Ads should return at least $3 - $4 for every $1 spent. And as we grow and optimise the campaign, we like to aim for $10 to $1 return.
- Total number of assists - Direct response campaigns generally connect the last two touch points between consideration and sale. We can't ignore the work of your other channels and presence in the market. At the same time, we should also take into account how Google Ads might have assisted other online channels. Maybe they clicked on an ad and came back through a Google search or directly back to the website. It's good to get a holistic view of how Google Ads but also all your other channels are working together.
If you'd like to learn more about how to get the best from Google Ads, Facebook, YouTube and Outbrain as advertising channels, check out our eBook!