Adwords strategy for small budgets

How to effectively use Adwords with a small online marketing budget

Adwords is the Google Pay Per Click advertising solution. The ads are shown on the right hand side of the Google search results pages, plus a number of other sites too.

Is adwords the right choice for a very small budget?

In almost all cases the answer is yes. If you want to drive visitors to your website then Adwords is a great solution. However, if you are looking to make a profit, you will need to do the math. If your current profit is just a few pennies per visitor to your site, then Adwords may not be the best option. (In such a case, spend your budget on SEO activity instead.)

If your profit is above about £0.30 per visitor it may be worth running ads. If your website currently makes you more than £1.00 per visitor, adwords should really boost your income.

How much is defined as a very small budget?

Note that I haven't mentioned the size of your budget yet. The reason is that the actual ammount you have to spend is largely immaterial. There are no set up costs and you pay Google per click, so there is no risk. A visitor is already worth £1.00 to you. If you pay google 50p to send you a visitor you are bound to win.

For clarity, I will say that this article is for people only able to spend a few pounds per day on advertising.

Strategy 1 How to work out the REAL value of a visitor

Suppose you own an online shop. You might just take your shop's profit and divide by visitors to get your profit per visitor.

I said earlier that you will do well if you pay google 50pence to send you a visitor who is worth a pound. However, there is a real danger in simplicity.

Not all visitors are equal.

You should not assume that a visitor from Adwords is worth the same as someone who stumbles onto your site.

Assuming you have a decent web analytics system running (Google Analytics is free and really good) you will be able to subdivide visitors by 'source' and see the profitability of each source.

You will see that visitors from search engines are either more or less profitable than your total average. The strategy I suggest is that you look at organic google visitors as your source when determining your profit per visitor. If that is more than £0.30 per visitor, your adwords should work well, so continue onto the next step

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