The concept is - sellers pay money for their website to be listed at the top of search results based on words associated with their products. This can be an overwhelming success for a brand if done correctly. Done incorrectly, you will waste a load of money and have very little to show for it.Have a look at some of these numbers from a recent survey:

But we can make your first Google Adwords campaign be much more effective if we think of it as an investment rather than an 'advertising expense'.Put off buying the new computer for a little and sink that money into Google Adwords. What's a new iMac worth, $1500USD? Take 1/4 of that and use it as a rough AdWords budget.I’m not saying that your first Google Adwords campaign will work better the more money you throw at it, but if it’s set up correctly and your overall target is to boost sales, then it may lead to more than just a new computer.

Setting Up Your First Google Adwords Campaign

For this example, we are going to be a small seller that makes and sells handmade men's boots. Tough, durable, waterproof boots for winter, hiking, trekking, all things like that.

Budgeting - Numbers & stuff

You sell design, make and sell shoes. Your most popular item sells for $100 but it costs you $50 to make. That means you have a $50 profit. Pretty simple math! But there is some more!Here's a tricky question - What is your conversion rate? Your conversion rate is the percentage of people that buy a product in your store.If 1000 people visit your store and 10 people buy something, that's a conversion rate of 1%. Again, simple math.Your Shoplo store can easily tell you what your conversion rate is.Most other eCommerce platforms should be able to as well.For this example, we willassume that people coming to our store have buying intentions and want to buy a good pair of shoes right now (we'll discuss more on this later). For 100 people that visit our store, 5 commit to a sale. That's a conversion rate of 5%. 1 sale every 20 visits.

Want to know more about increasing your ecommerce conversions?

Read the article:25 Ways to Optimize your Ecommerce Conversion Rate (read now.)

To figure out if you can afford to be associated with a certain word, you need to know Maximum Cost per Click (Max CPC). That is, how much can you afford to pay for a single click into your store. In this example, we will see if your Max CPC is in the ballpark of Google’s estimated CPC for a keyword. For example, if your max CPC is within a dollar or so or an estimate CPC, there's a high chance that you can use that keyword and make some money.Now a difficult question - what percentage of your profits are you willing to allocate to your AdWords campaign? With a solid pricing structure, you should be able to allocate at least 20%. For the sake of this example, we will allocate 80% of our profits to our AdWords campaign - $40.Your product sells for $100 and you make a $50 profit. You’re willing to spend $40 on an Adwords campaign to get a sale. Every 20 clicks, you have a sale.

$40/20 visits = $2

This means you can spend $2 on an AdWords click and still make a profit.This is of course, provided your conversion rate stays the same.Don’t go looking for keywords just yet. We need to figure out your daily budget. And remember we’re taking baby steps first. There is no need to go pouring so much money into a daily budget. To analyse if our calculations are working, we need a few clicks. With as little as 10 clicks a day on your ads, we can see if our conversion rate is accurate.Remember, the $2 is the MAX CPC, not the amount that we will spend. Therefore, depending on our keyword research, a week-long campaign may be significantly less!So we need to do some.

Keyword Research

As we’ve mentioned in Bing Adwords Blog, the best keywords to search for are those with buying intent.You will be paying for people to click your ads, so you want to make sure the people that click on your ads are in ‘buy mode’ and not ‘research mode’.We have had a lot of success putting the word ‘buy’ first up in our keyword. Someone wanting to know the price or specs of a product wouldn’t search for ‘buy X product’.Cue up Google’s Keyword Planner. This little toy lets you look at words or phrases people also search for when they search something. It’ll also tell you the volume, trends as well as how much it costs to advertise on a certain word- which is exactly what we want to know!

Click ‘Search new keywords using a phrase, website or category’. Time to use our keywords with buying intent! Also, think like your buyer. What would someone search for if they wanted to buy the kind of thing they sell?

Begin

Keep everything else as it is. Don’t go fiddling with things you don’t understand!Click ‘Get Ideas’ and you’ll be presented with your list of results.

Note: If your Max CPC is lower than the price for these keywords, it's not all over! You need to increase profit margins or up your conversion rate. In any situation, it’s always good to do both.What’s the first thing you notice? Have a look at some of those prices. What was ourMax CPC? $2. So we can afford to use all of these keywords.But which ones?‘Buy shoes online’ has a lot of traffic, but we won't want women looking for heels to click our link. Same with 'buy mens shoes'. We don't want someone looking for formal shoes clicking on our link.‘buy winter shoes’ is good but the traffic isn't exactly crazy. Same with 'buy handmade shoes'. 'Buy mens boots' is cheaper, accurate and still has a lot of traffic. Let's use that one!Before we run with it, it’s always good to know thy enemy!

Competitor research

A little healthy competition never hurt anyone. So why not check out what everyone else is doing?Keywordspy is one of our favourite tools for this. Plus, it’s free for what we’re doing!

Head over and make your free trial account. Select ‘keywords’ up the top, select your country as you did in the Keyword Planner and enter the keyword that we chose earlier.

Your result is some pretty impressive data! What we’re interested in is under the ‘Ads’ tab. Click there and you will see a list of ads that are being used on the same keyword as yours.Check them out, have a look at the vocabulary in them, how they are written and if the keywords actually appear in the ads. To please Google, you should have your keyword present in your ad.With this page open, head back to your Google Ads Campaign. On your list of keywords, click the blue arrow to the right-hand side.

Once you’ve clicked your blue button, a side menu will open up.Here, you can change the bid range. Remember out Max CPC? That number was the maximum we would spend for a click. But we won’t always pay that amount. Because the price is based on bids. Bids are based a complex systembut well explained here.Now Google will suggest the amount that we should spend for a max bid on this word. Because this is how Google makes money, it's going to want us to spend as much as possible.Dial in the Max CPC that we calculated.Now we see how many clicks Google thinks we will get and the maximum amount that we’ll spend in a day. Once all this shows off the numbers look good, click ‘review plan’.

Next up we have this screen. This is the performance forecast of your ads.The white vertical line toward the right of our graph can be dragged to the left. You’re now changing your CPC. See how the estimates of impressions, clicks, average position and even CTR change? The ‘Keyword’, ‘Device’ and ‘Location’ tabs up the top will all give you detailed estimates about who willclick your ads and on which device they will use to do so.Do some experimenting. Increase your max bid and daily budget to see how many more clicks this could get you. Remember, don't get too ahead of yourself, we're only spending what we can afford!When done here, click ‘Save to account’ on the top right and you’ll be presented with a screen asking you for details about your campaign name. Enter the name (perhaps ‘first campaign’) and enter the daily budget (which we calculated earlier). Hit ‘Save & continue’ and in a few moment, your ad will be saved.Click ‘Create ads for your new campaign’ even though we won’t be doing that just yet!

Landing pages

So far, we’ve found the best possible words to associate with. We’re not spending too much, and we know what we’re advertising. So someone who wants to buy our stuff finds our ad and clicks on it. What page are they going to go to?We still need to convert them into a sale!This is why you need to make a custom landing page for every single ad you run. Here is a great read on not only why but also how to make great landing pages for your Adwords campaigns.If you’re having 1000 people come into your store and having 20 people buy something instead of 10, that’s a conversion rate of 2, and imagine how much of an impact that could have on your next advertising campaign! So, make sure your landing page is spot on.Time to get creative!

Make your ad

Back in Google Ad Words, under ‘Campaigns’, click ‘Ads’ and then ‘+AD’. We’re going to actually make the first ad! The template that opens up is the template of an ‘Expanded Text Ad’.Since you only pay when people click on yourads, they should fulfil 2 very important roles.

1. Attract people that want to buy what you’re selling
2. Ward-off anyone that isn’t interested in what you’re selling.

They also play another role. Well written ads with a high click-through rate (CTR) increase your AdWords Quality Score, which lowers the cost per click of your keywords. Your ads will directly affect how much you pay per click for each of your keywords. Great ads will lower your costs.There is no easy way to write an ad as changing one word can throw out the balance of the entire ad. There are however some good tips to keep in mind:

1. The whole message should be said and keywords used in the first 2 headlines- This text is bolded so you want to use this eye-grabbing area to convince a buyer to click.
2. Headline 1 is the most important- Get the important words said ASAP.
3. Make sure the ads look good on all devices- more people will see it on mobile than on a desktop.

Here is what we came up with for our baby clothes!

When you’re happy with your writing, click ‘Save ad’.

Fine Tuning

Now that you’re back here, we have to pause the ad for a moment. Click the green circle then click ‘Paused’.

Now, click on the ‘Ads’ tab up the top and click your keyword.

Click the dropdown box, click ‘phrase match’ and click save.

Initially, Google sets this to broad match, which means it will show your ad if anyone has your keywords in any order in a search. For example, ‘Gentlemens club boots freeloaders to buy more space’. Obviously, not relevant to your boots.Exact match is the opposite. Someone has type ONLY your keyword into Google for you ad to show up. Phase match means someone can search for ‘where can I buy mens bootsin Melbourne’ and your ad will appear.Just one more step!

Conversion tracking

Now we need to put some code in the ‘thank you for your purchase’ page of our eCommerce store. In your Shoplostore, you can easily customise the thank you page. This option may vary depending on your eCommerce platform.This will help us keep track of how many people visit our site from ads and which of those people convert into customers.Click on Tools, and then ‘Conversions’.

Now, click ‘+ Conversion’ and then click ‘website’.Enter a name that’s easy to follow. ‘Baby Clothes Ad Sale’ for example.We know our product sells for $100, so enter that as the value of conversion.Click ‘Save and Continue’

Now this little piece of code is our Conversion tracking! It will keep us informed about how many people that click our ads commit to a purchase. In your eCommerce platform, you need to go to your ‘thank you’ page and edit it. Paste this code in there.Phew, done!The ‘Tracking status’ will say ‘unverified’ after a day or so, then it will change to ‘reporting’.Now is the really super mega hard part.Waiting.Yep, nothing is going to happen in the next few hours, maybe even the next day. It's scary, I know, you’ve put all this money, time and effort into making your first set of ads, and there's no immediate reward.

Want to know what to do in this time? Have a read of this great checklist of what to do during your first Google Adwords campaign.So there you have it!In a few days, your first Google AdWords campaign should be up and running.After your budget is spent, spend some time analysing what has just happened. A simple analysis of your first campaign can almost be as valuable as the campaign itself. There is a lot to be learned from it. Where do you go right, where did you go wrong? What will you do differently during the next campaign?Good luck in the world of Google Adwords and be sure to let us know how your first Google Adwords campaign went!