Running Google ads is not simply ‘set-up’ and then left there, periodically checking and ‘squeezing’ gradually the audience, keywords… Instead of a ‘customizable’ campaign based on data, campaigns Advertising with Google Ads is more planned with careful calculation before pressing the run button.
If your business does not have a really hard staff on digital performance marketing, start with the 3 suggestions below to optimize costs – effectively when running ads with Google ads.
Note: The article is only for systematization, not discussing optimization techniques in depth. If you are looking for ways to increase leads and reduce costs, please refer to the links at the end of the article!
Step 1: Use data to set goals
Groping in the dark won’t get you anywhere. To optimize, you need to know what you are optimizing for and where to go, whether that goal is feasible or not?
One of the basic mistakes when running ads is ‘optimizing’ without a specific number in mind. Do you optimize in terms of lead quantity or lead price, by what percentage increase/decrease based on the existing database? If estimating percentages is a bit difficult, you can start with the formula "same lead count, reduce CPL" or "same CPL, increase lead count". Those are some common approaches.
However, the campaign goal is not always leads. In the article about 3 steps to set up goals before running ads Digit Matter also mentions another picture – sales-based optimization – that businesses and managers care about more than anyone else! And sometimes, the optimal goal is not only sales but also the effectiveness of every dollar spent!
To set goals more effectively with existing data, start with these 3 steps:
- 1. What do you want to achieve after advertising: This is a marketing objective that you need to agree with the CMO to reaffirm the role of digital in the big goal. When running Google ads, the main focus of campaigns is usually placed on the following 4 factors: Lead Generation, Online Sales, Offline Sales, & Mobile Growth.
- 2. What are the indicators that need to be optimized to achieve the set goals: In other words – KPI
- 3. How much KPI needs to be achieved to realize the original goal?: usually depends on ROI and Customer Life Value or similar metrics
More specifically, depending on each case, the performance marketing goals and effectiveness evaluation methods are divided into the following 4 groups:
A few small notes when setting goals are:
- Results must be measurable
- The effect must be overcome when not running Google ads
- Positive ROI
According to Google’s suggestion, Customer Lifetime Value (CLV) is an indicator that businesses should apply to measure campaign effectiveness. Determining who are the optimal beneficiaries based on data or testing results and devoting maximum resources to them is also the best way to maximize ad performance!
In addition, when it comes to measurement metrics, Digit Matter also wants to mention the following two metrics:
- Cost per acquisition (CPA): this is a metric that every advertiser is pretty familiar with – how much we are paying to get 1 client. And CLV (as mentioned earlier) will be an important reference for you to re-evaluate your estimated CPA, especially when your business has many products/services with different prices.
- Return on ad spend (ROAS): the index indicates the revenue achieved per 1 dollar spent on advertising. Measuring and optimizing based on this metric will be suitable for businesses looking at advertising with a broader picture (optimization is based on sales, not just leads as mentioned earlier).
2. Conversion tracking towards automation implementation
Conversion tracking is also an important factor to pay attention to in advertising because these metrics will:
- Let you know if the campaign is running well or not, is the goal achieved within the estimated time?
- Allows you to calculate ROAS and CPA to evaluate campaign optimization
- Save time and improve performance with automated bidding strategies when running Google ads
When you have obtained a large enough data from running ads, businesses should consider Google’s automatic bidding functions. For each goal, Google will have different bidding functions, such as:
- Increase website traffic → maximize clicks
- Increased presence → target impression share
- Maximize Conversions with Targeted CPA → Target CPA
- Aim for the set ROAS → Target ROAS
- Maximize conversions with available budget → maximize conversion
- Maximize conversions with your existing budget → maximize conversion value
The benefit of automating the bidding strategy when running Google ads is reducing time and human effort, but still ensuring optimal calculation by giving the right bid price at the right time (increasing/decreasing bid price when needed based on learned data).
However, if you don’t attach enough tracking codes to create a large enough database for the ‘learning’ system, you will sometimes get shares like “don’t try, it’s so stupid”. Tracking can be roughly understood as ‘translating’ data into specific insights. Doing superficially at this step, the data returned to Google adwords is said to be a mess that makes the system have no basis to ‘learn’ and automate the above methods!
3. Waterfall media planning
In a nutshell, waterfall media planning is:
- The channel with the highest conversion efficiency receives the maximum budget until the CPA, ROAS exceed the set threshold.
- Continue the same with the 2nd, 3rd best performing channels until the budget runs out
Only in this way can you keep the optimal CPA/ROAS, avoiding price increases due to trying to pour more budget when the demand at that channel is limited. For example, when running Google Search Ads, the search volume is limited, when you pour more budget than you can spend, it only makes CPAs increase!
Here are a few examples of how to apply the waterfall model to targeted advertising. You can refer to and adjust to suit the specifics of your business:
1. Lead Generation
2. Online Sales
3. Offline Sales
4. Apps and Mobile Growth
As promised, to learn more about quick optimization tips when running ads, you can refer to the articles below:
In addition, if you are looking for a partner for long-term performance marketing campaigns, please leave your information in the contact form for support in evaluating effectiveness and quick advice for upcoming campaigns!
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