Do you have a website that you wish could have more visitors? Are you an affiliate who hopes to earn more commission? Do you have a brand that you want to promote its sales? There is no better and effective way to do all these than to use Google Adwords. For so long, Adwords has generated fantastic results for so many online businesses and still is, but for you to benefits from this digital marketing strategy, you need to know how to use it the right way. One of the things that can limit your profits using Google Adwords is overspending. For maximum benefits, you need to spend less to reduce the expenses. Before we get into this juicy part, let’s look at what Google Adwords is.

What is Google Adwords?

This is an advertising system provided by Google, where advertisers use specific keywords and bid on them for their ads to appear in search results. For their clickable ads to show in Google’s search results, advertisers have to pay, and this is one of the ways that Google makes money.

With Adwords, you do not have to practice patience for your online business to give you profits organically. You can use this paid search service to witness immediate results and benefits. The best thing about Adwords is that it is not complicated to materialise or too expensive to afford.

How Adwords calculate prices

The Adwords rates vary depending on many factors. You can have an ad that costs between a few cents to tens of dollars. Two of the main factors that affect the cost of Adwords include;

Display

This is where your ads will show. If you want your ads to show in search results, you might have to pay more than when your ads show via their Display Network, for instance.

Competition

Are you dealing with a niche that has high demand? The higher the number of people competing to show their clickable ads against a particular search, the higher the cost of the ads.
When it comes to Google, you do not buy the ad displays, but instead, you bid on them. The winning bid is the one that goes live. This implies that your proposal should be competitive enough to register impressions and clicks.

Surprisingly, money is not the sole thing that determines the success of your bid, because there is something that Google calls the quality score. Therefore, high-quality ads win auctions, even if they have lower bids.
How much should your ads cost?
There are two common types of campaigns that you can run on Adwords.

Cost per mille

Also referred to as CPM, here, you pay when your ads have been displayed 1000 times.

Cost per click

Usually abbreviated as CPC, here you pay every time a person clicks on your ad.

The CPM is relatively cheaper than its counterpart, but the CPC can potentially have high conversion rates.

To determine which of your ads are doing great, you should keep trying. You should target at least one hundred clicks for every keyword, to gather enough data to decide which keyword you will let go or which one you will continue persuading. This keeps off guesswork, and it saves you a lot of money in the long run.

For just testing your ads, you will need a budget of $100-$200. However, you should not use this money within a day as it will not be economical. To regulate your spending, consider targeting a specific location depending on times when sales can be made.

This budget should serve you for a week or two and once you determine which ads perform well with a particular audience, target those users entirely. To the advertisers’ advantage Adwords offers daily budgets and advanced targeting in such a way that you can tailor your campaigns to run without your active management.

Digital advertising can at times be too expensive. Some people use hundreds and even thousands of dollars every day. Nonetheless, modest budgets can generate excellent results but when starting, spend less until you learn what works for you. It is recommendable to pay between $100 and $200 for every keyword before redesigning your strategy.