Google Adwords should be an effective channel for almost every business in Australia today. Unfortunately too many business owners end up paying the Google Adwords stupidity tax, the lucky ones for a month or less and (these people stop their accounts), others unfortunately have paid it for years and just don’t realise it.

1. Can Google Adwords make
money for my business?
HAVING REVIEWED IN EXCESS OF 500 ADWORDS ACCOUNTS,
THERE ARE COMMON PROBLEMS THAT APPEAR TIME AND TIME
AGAIN. THESE MISTAKES OFTEN START BEFORE SETTING UP AN
ADWORDS ACCOUNT.
REFERENCE: GOOGLE ADWORDS MANAGEMENT

2. Google Adwords should be an effective
channel for almost every business in Australia
today. Unfortunately too many business owners
end up paying the Google Adwords stupidity
tax, the lucky ones for a month or less and (these
people stop their accounts), others
unfortunately have paid it for years and just
don’t realise it and those that, get how Adwords
work are achieving excellent returns and have
unlimited budgets.

3. Business goals – what do you want to achieve
When you Find Your Ideal Customer – what is lifetime
value of this client worth for your business
Measures of Success – how will you track and
measure performance
Competition – how do your prices, services & USP
stack up in the market?
Can your business make money from Adwords?
Once you have answered the above questions, you
will know whether Adwords is the right fit for your
business. If you would like to understand more about
each of these key points above, subscribe to our
(members only section).
Have a plan:

4. Once you have defined what clients are worth to
your business, you need to balance out short term
and long term concerns.
You might decide that an average client is worth
$20,000 to your business over 2 years. As a rule of
thumb working on 20% cost of acquisition, you are
willing to pay $4000 for every new client. That
includes costs of salespeople, cost of marketing and
cost of administration.
There becomes a balance for many small businesses,
in managing cash flows. To win a new customer will
only net $850 per month, yet cost up to $4000 to
attain. This model is only scalable to cash flow
limitations in your business.
Let’s take it to a deeper level.
Know your targets:

5. Talk with most sales people, they will tell you
they close all of the good leads and the rest
were tire kickers. If you are doing your own
sales, and you are honestly assessing your
performance, you might convert 20% of (non
referral or repeat clients) into sales. This will
range between 10-25% at the higher end.
If you don’t measure sales performance,
start doing it! Buying leads from online
marketing are very different to referral leads,
the ROI is what counts here.
Sale performance:

6. 10% of your leads turn into sales
Business is already cash flow positive and can
fund growth
Willing to pay up to $4000 to win each client
The business has capacity to service 4 extra
clients per month
The Adwords average cost per click is $10 and
your market is big with 100,000 searches per
month – to learn more about assessing market
size, refer to article on Google Adwords keyword
tool.
Lets then work on simple
averages for this example:

7. 40 leads are needed
Maximum cost per lead is $400 per lead
You allocate a budget for up to $16,000 per
month
What is needed:

8. Average market share from Adwords will be
2-3% – not aggressively bidding
This suggest you could spend $20,000-$30,000
per month @ $10 per click
Average conversion rate from click into lead
is 1-2% = $200-$400 per lead
What should you expect: On
average

9. Based on $850 per month income from each client – 4
new clients = $3400 per month
Month 1 = -$12,600 ($16,000 -$3,400 new income)
Month 2 = -$9,200 ($16,000 – $3,400 new income + $3,400
previous month)
Month 3 = -$5,800 ($16,000 – $3,400 new income + $6,800
previous month)
Month 4 = -$2,400 ($16,000 – $3,400 new income +
$10,200 previous month)
Month 5 = $800 ($16,000 – $3,400 new income + $13,600
previous month)
Month 6 = $4200 ($16,000 – $3,400 new income + $13,600
previous month)
How this will impact cash
flow:

10. Hit profitability in between months 4-5 –
$30,000 cash required approx.
Cash flow requirements:

11. The average results quoted above include
novices and dedicated professional teams with
significant differences between either results
making up the averages. Unless you are skilled in
running lead generating campaigns there
remains the chance (in the above example) of
blowing nearly $100,000.
Working with a professional Online Marketing
company with the above example should cost
between 15-25% of your budget.
Budget on 20% to Agency for $10,000 per month
= Pay the Agency $2,000 – advertise with
$10,000. The services should include Google
Adwords Management & Landing Pages
designed for conversion.
How to get above average
results:

12. Boosting conversion rates from click into lead
from 1-2% towards 5% will be game changing
Reduced wastage on campaign
Cost per click optimised with ideal Adwords
quality score
Correct tracking of leads to precisely measure
cost per lead
An experienced Adwords consultant or Adwords
company should be able to deliver 20-30%
improvement to any average Adwords account.
When combined with boosted conversion
designed landing pages the potential scope for
improvement is significant.
Likely Outcomes:

13. This is a typical example of many businesses
trying to run Adwords account themselves.
If you would like to discuss your ideas for
growing your business , we suggest rather
than just jumping in feet first, talk with one of
Australia’s most experienced Adwords
Management team about what we deliver
for clients businesses just like yours.
Think about the time and
stress you will save yourself.

14. We welcome you to join our series Find Your
Ideal Customers – via Online Marketing
where our team will provide tips used by the
Pro’s that will reduce your Adwords Stupidity
Tax.
Find Your Ideal Customers is
exempt from paying the
Google Adwords Stupidity
Tax.

15. CALL US AT: 1300 76 00 84
OR VISIT US AT:
http://findyouridealcustomers.com.au
Find Your Ideal Customers is a
new start up Digital Marketing
Agency that is now offering
services to the market.