How we outcompete eBay on Google AdWords without a big ad budget
Are you advertising on Google in a competitive industry with an ad budget less than $1,000,000 per month?
Are AdWords leads down at your company?
Are you trying to increase your AdWords CTR, conversions and ROI but not generating the leads and sales you need to hit your lead gen and marketing targets?
What if I could show you a simple, proven 3 step formula to outcompete industry giants who spend millions of dollars per month on AdWords (like eBay), and do it with whatever monthly ad budget you have to work with right now?
Over the last 7 years I have used my own ad money to buy Google AdWords ads.
I’ve built AdWords campaigns where I put $1 in and took $13 out.
One of our recent clients increased leads by 165% in 90 days, while decreasing cost per lead by $351!
In the last 7 years, I have developed a simple 3 step formula to take any AdWords campaign from failing to highly profitable with small monthly ad budgets in highly competitive industries.
“The definition of genius is taking the complex and making it simple.” Albert Einstein
I’m not saying I’m any sort of genius (I lost money when I first started investing in AdWords), but if you boil your AdWords campaign management down into these 3 simple steps, I guarantee you will do a better job than 99% of AdWords managers out there.
Why?
Because these 3 steps are simple, but not easy.
Most people who read this article won’t ever be willing to put in the work it takes to build out their AdWords account in this granular, systematic way.
Follow These 3 Simple Steps For Predictable Google AdWords ROI
Step 1: Restructure Your AdWords Account
Step 2: Scale Your Ad Campaigns
Step 3: Eliminate Your Wasted Ad Spend
I’m going to breakdown every step for you, so you know exactly what to do.
Step 1: Use This AdWords Account Structure To Beat Your Competitors Every Time Without Paying A Higher Cost Per Click… Even If You Compete Against eBay
There is a reason why most AdWords campaigns fail.
There is also a reason why when it comes to AdWords, most companies overpay for clicks.
The problem starts with management executives at the top who know very little about AdWords.
All they see is where their ads are ranking when they run a search on Google.
If their ad isn’t at the top, they start asking questions.
And you could soon be out of a job if you don’t fix it, fast.
Here is a direct quote from an email I received from the CMO of an 8 figure company when we started working together…
“I’m not concerned with spending less for conversions as there are hardly any leads to convert. All we need to ensure is that the paid ads are visible in the top 3 ads.” CMO
With this sort of executive management thinking it is no wonder why AdWords managers immediately login to their AdWords account and increase bids account-wide.
They think that all they can do to make management happy is to increase bids to be #1 on Google and save their ass.
They bid more thinking their ads will rank higher, so they get more clicks, more leads and more sales.
But it doesn’t work like that.
All that thinking leads to is higher click costs for your company and everyone else in the industry.
A race to the bottom… where Google is the only one that comes out on top.
To really understand how to get your ads to the top of Google while maximising ROI…
You need to first understand Google’s “Ad Rank” formula.
This formula determines where your ads rank in the Google AdWords ad auction.
As you can see… CPC bid is only 1 factor in where your ads rank on Google.
Quality score is the other key factor that can put your ad in the #1 ad position, while paying less per click than your competitors in the #2, #3 and #4 ad position.
Here is an illustration of how Google calculates how much you pay per click in the ad auction, and the impact on your ‘Actual CPC’ when you have a higher quality score than your competitors.
So the question you may be asking now is…
How do I get a 10/10 quality score for my ads?
The truth is… nobody really knows.
Because Quality Score is a made up number that only Google knows how it is calculated.
There is no published formula for “Quality Score”.
However, what I can do is give you my own formula and advice on how to get a 10/10 quality score, with a real life example from one of my clients AdWords account (where we crush eBay’s AdWords ads), so you can reverse engineer what we’ve done.
Here is one of our 10/10 quality score keywords.
What you might notice is that when you have a 10/10 quality score, your “Estimated first page bid” drops significantly.
Google is telling me all we need to do is bid 5 cents to get our ad on the first page #winning
But before we jump too far ahead of ourselves and get into the tactics of what makes up a 10/10 quality score… you first need to understand how to restructure your AdWords account if you want to get a similar result, because…
A great quality score starts with a well-thought out account structure.
Here are the 3 things you need to do:
1) Pause all the keywords that have 0 conversions over the history of your account
Filter your account stats by the “All time” date range, click on your “Keywords” tab for ‘All campaigns’ and pause all your keywords with 0 conversions.
The purpose of this exercise is to eliminate all your keywords that are proven to not convert, so you can start to focus on optimising your keywords with proven conversions.
Even though you think every keyword in your account might be relevant, not every relevant keyword makes you money.
If you have keywords that have never converted over a period of at least 6 months, you can be pretty sure they are never going to just magically convert.
Cut the fat.
You want a clean, lean, AdWords ROI generating machine.
2) Create Single Keyword Ad Groups from all the keywords that have proven conversions over the history of your account
Nowadays we have a cute little word for this type of account structure, called SKAGs (Single Keyword Ad Groups).
The overall idea though, is to build the most granular account structure possible, so that your keyword, ad and landing page are perfectly aligned for maximum relevance for your website visitors and Google.
With this account structure you are giving people exactly what they are looking for (instead of something similar to what they are looking for).
Experts who use this account structure and manage millions of dollars in client ad spend every month recommend using 1 exact match keyword in each ad group. This is a great strategy, however it doesn’t allow you to scale your ad campaigns.
We found a way to enhance this strategy by using multiple match types in every Single Keyword Ad Group (SKAG) so we can…
Scale client campaigns faster based on proven conversion data in the “Search Terms” report.
Here is an example.
One of our clients companies sell snow cone syrups (aka shaved ice syrups).
Here’s what the keywords inside one of their SKAGs looks like:
- +snow +cone +syrup
- “snow cone syrup”
- [snow cone syrup]
This SKAG is called “Snow Cone Syrup” (same name as the keywords in the ad group).
The reason we also add phrase match and modified broad match keywords (in addition to the exact match keyword) inside the ad group, is so every week we can look through the Search Terms report.
In the Search Terms Report we can find new search queries that have conversions and add them to the account as new SKAGs if they meet our client’s target CPA.
Google does a good job at attributing conversions to the right keyword match type, so you don’t need to worry about putting every keyword match type in it’s own ad group.
That would be overkill, and lead to a high level of data dilution.
After you have restructured your account into Single Keyword Ad Groups, your job still isn’t done yet. You now need to…
3) Give your Single Keyword Ad Groups the best possible chance of getting a 10/10 quality score
The 3 main components of Quality Score are:
- Expected click-through rate
- Ad relevance
- Landing page experience
Our “snow cone syrup” keyword has a 10/10 quality score.
To increase Expected click-through rate, we do 2 things:
1) Use compelling ad headline and description copy with at least 1 unique selling point of the product (eg: Free 50ml Flavour Samples)
2) Use ad extensions to increase the size of our ad compared to competitors and call-out more unique selling points (eg: Free Shipping, 100% Natural Flavours, etc)
To increase Ad relevance, we do 3 things:
1) Use the keyword in the ad headline
2) Use the keyword in the ad description
3) Use the keyword in the display URL
Here is what our ad for that keyword looks like on Google (BTW you should always have at least two ads in every SKAG, otherwise you’re never testing ads):
To increase Landing page experience, we do 4 things:
1) Use the keyword in the page title
2) Use the keyword in the page headline <h1> header tag
3) Use the keyword in the call-to-action
4) Use the same ad copy on the landing page as I did in the ad
Here is what our landing page looks like when someone clicks on our ad:
This is how you beat industry giants like eBay on Google AdWords without a million dollar ad budget
1 of my clients biggest AdWords competitors is eBay.
But when it comes to ad auction time… guess who wins every time?
Me (and my client).
Even our Google Shopping ads beat eBay every time (because we use the same strategy for every one of the products in our clients product feed).
I guarantee you eBay aren’t getting an “Estimated first page bid” of 5 cents per click like us.
Those sort of low cost per clicks are only reserved for people who know how to structure their AdWords account the right way.
So next time your manager tells you “All we need to ensure is that the paid ads are visible in the top 3 ads”…
Refer them to this section in this article on exactly what needs to be done to achieve this goal (without paying a higher cost per click).
Step 2: Use This Process To Scale Your AdWords Campaigns For Global Lead Generation And Sales Growth Without Guessing What New Keywords “Might” Work
Now that you have your AdWords account structured properly to beat competitors like eBay and Amazon… it’s time to scale what works.
Once you have a profitable AdWords campaign and are crushing competitors the problem now becomes… how do we scale our campaign for maximum ROI.
Obviously one of the first things you will want to do is crank up your daily ad budgets, so you can extract the maximum amount of search volume from all your keywords.
But there are only ever a limited number of people searching for your keywords in the locations you target, so there is going to be a point when you exhaust all the search volume for your keywords.
That is where our scaling strategy comes into play.
When we restructured the account, in every SKAG we used 3 keyword match types (exact, phrase and modified broad match).
This gives our ads the opportunity to show for other close variants of our keywords.
To find out which keyword variants people are finding our ads for, we need to look inside the “Search Terms” report (which is located under your “Keywords” tab).
Sort all your search terms by the “Conversions” column to see which search terms are getting conversions, then look under the “Added / Excluded” column to see which keywords are already “Added” inside your account as SKAGs, and which search terms are not.
Add all the search terms with conversions as new SKAGs in your account (if they are not already “Added” and the cost/conversion is below your target CPA).
If the cost/conversion is above your target CPA you may want to either consider:
- adding the search term as a negative keyword because it is unprofitable
- add it as a new SKAG and improve it’s performance with more relevant ad copy and a more relevant landing page
I personally like to add all converting search terms as new SKAGs so I can give the keyword it’s own specific ad and landing page copy, and then monitor my new optimised CPA.
If you are managing a big account with hundreds of search terms showing up every week, you can prioritise your campaign optimisation.
You can do this by using the Search Terms report to build out your SKAGs by focusing on the descending order of conversions.
After you add all the new SKAGs to your account, you need to add ‘Ad group level negative keywords’ to your original SKAGs.
If you don’t do this, your short tail keywords will compete with your long tail keywords for impressions.
Here is an example of how to do this.
Let’s say I find out from my Search Terms report that my “snow cone syrup” keyword is converting for the plural form of the keyword (ie: “snow cone syrups”). I would first add a new “Snow Cone Syrups” SKAG to my account:
Then I would add an ad group level exact match negative keyword for [snow cone syrups] in my old “Snow Cone Syrup” SKAG, so that my “Snow Cone Syrup” SKAG ads don’t steal impressions from my new “Snow Cone Syrups” SKAG:
Note: Don’t worry about adding ad group level negatives until you see the discrepancy in your Search Terms report after you’ve created your SKAGs. Otherwise it becomes super messy.
Even plural keywords like this example should have a separate SKAG (if they show up in your Search Terms report), as over time, you will start seeing a difference in performance between singular and plural keywords.
This level of granular optimisation allows your most relevant ad to show for the most relevant keyword.
And you should do this every week if you are serious about scaling your AdWords campaigns for maximum ROI.
Step 3: Eliminate All Your Wasted Ad Spend And Send Your Boss A “Digital High Five”
Using phrase match and modified broad match keywords comes with the potential for your ads to show for unwanted search terms.
To eliminate all the waste all you have to do is look through your Search Terms report again and add all the irrelevant search terms to your negative keyword list.
Here is an example from my Search Terms report over the last 7 days where people who searched for “snow cone bong” and “snow cone drug” were seeing my “snow cone syrup” ads and clicking on them #stoners
I don’t sell bongs or drugs, so these need to be added to my negative keyword list, so my ads never get clicked on for these search terms again.
Note: We don’t add these keywords at the ‘Ad group level’ or ‘Campaign level’. We created a ‘Negative keyword list’ that has all of our clients campaigns in it and named it “All Campaigns”.
We do this because all the keywords we add to this list we have identified as being completely irrelevant to the whole account, so we use this to build up 1 strong account-wide negative keyword list for all the irrelevant keywords we find every week.
Once you’ve gone through your Search Terms report and added all the irrelevant keywords to your negative keyword list you are done.
Step 3 complete.
If you want to get extra brownie points with your boss, filter all the negative keywords you added and send your boss a “Digital High Five” with all the cost savings you found:
Your email might look something like this…
—
“Hey Boss,
Just wanted to let you know we eliminated $564.62 worth of wasted ad spend this week by finding some search terms Google was “broad matching” our ads for and adding them as negative keywords.
That should save the company about $29,360.24 over the course of this year!”
—
That quick update is sure to keep your boss happy (remember all your boss sees is where your company’s ads rank on Google and the reports you show them, so you need to give him/her a digital high five every now and again).
Conclusion
Of course there are many more advanced optimisations you could do to further increase your AdWords ROI like:
- Desktop/mobile optimisation
- Time of day optimisation
- Search vs partner network optimisation
- Remarketing campaigns to people who land on specific pages for >30 seconds
However none of that stuff matters until you have a winning account structure in place, that is driving targeted and qualified traffic to your website.
What’s the point of remarketing to unqualified leads, or optimising for different times of the day, only to find out you are paying a lower cost per lead, for more unqualified leads.
If you follow the steps in this article, you may not get the same results as our client.
I don’t guarantee that you will.
We’ve been doing this for 7 years and we’re always optimising our process to get our clients maximum ROI.
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