How To Create A Profitable AdWords Campaign

Last Updated: March 5, 2023

So you’ve brushed up on your knowledge of AdWord’s, created an account, honed your keywords, and you’re ready to start making that money. A few weeks roll by and you begin to doubt this new venture of yours. I get it, there so much unknown. And when you don’t see anything happening, it can be somewhat discouraging. But Launching a new AdWords search campaign is an exhilarating process! A process interlaced with excitement, fear, and a whole lot of anxiety. Luckily, this article is here to allay those fears.

The most important thing is for a successful advertiser is to set up and manage AdWords with a proper checklist. Think of it as a recipe for cookies, if you forget to add sugar those cookies will taste pretty weird. The same thing goes with AdWords, minus the sugar. An effective AdWords campaign relies on a list of key ingredients and a step-by-step process for how you’ll do things each time. You can’t wing it and expect things to turn out. So let’s get down to it. It’s time to learn how to create a profitable AdWords campaign from scratch.

How To Create A Profitable AdWords Campaign

Step #1: Be Aware of Customer Demand

If your customers aren’t searching for your product or service in Google, then clearly AdWords isn’t going to work for you. I hate to be the bearer of bad news, but it’s just the truth. If you’re selling swimming pools for pet rabbits, you’re bound to get absolutely no hits. So, before you get super excited about creating your first campaign, you need to make sure that there’s enough of a search volume for what you’re going to offer.

Thankfully, there’s a tool for this: Google AdWords Keyword Suggestion Tool. This tool acts just like a thesaurus. You enter the phrases you think people might search for and Google lets you know of similar and relevant phrases. In fact, this tool will even let you know how often people search for these phrases, how competitive they are, and how much it will cost you to advertise with each keyword.

All of this information helps you determine which keywords you should use for your campaign. Before you use the tool make sure that the Advanced Options are set. If you’re in the U.S., set the location to the United States and the language to English. The device will default to desktops and laptops, which is what you want unless you want to target ONLY mobile devices.

Then you’ll click on the Columns drop-down menu. Go ahead and check Competition, Local Monthly Searches, and Approximate CPC (cost per click). Local Monthly Searches will show the searches in the U.S. if you picked it in the Advanced Options. AdWords even gives you the competition and cost per click for each keyword. This is great for when you want to analyze your keyword opportunities.

Whenever you use AdWords for keyword research, it’s a good idea to use the keyword Match Type setting called “Phrase”. This gives you an incredibly accurate idea of how many relevant phrases there are per month. It’s also a good idea to type in the phrases you think your searchers will search for.

Essentially there are three questions you need to ask yourself in order to determine whether or not to advertise a particular keyword:

  1. Is the keyword searched on Google? If there is no search volume, no one is typing that phrase into Google. It’s never a good idea to advertise on keywords that aren’t searched for.
  2. Is the person searching this keyword likely to buy my product or serviceOr is the person just researching it with no intention of making a purchase? Instead, focus on the intent of the keyword. If you’re just starting out it’s a good idea to advertise on keywords that are used when someone is looking to buy.
  3. Can I afford to advertise on the keyword? This is extremely important, but it requires a little math. Which leads us to our next step.

Step # 2: Mind the Math Aspect

Before you finalize your keyword list you need to make sure the math makes sense. This way you won’t go after keywords that don’t have a chance of being profitable. It’s a good idea to run these numbers before you waste any time (and money) on a campaign that’s destined to fail.

In order to figure out if you can afford to advertise on a certain keyword, you need to calculate your maximum cost per click (Max CPC). Go ahead and compare your business’s Max CPC to the estimated keyword CPC. For example, if your Max CPC is $10 and the estimated CPC is $8, then there’s a good chance you can profitably advertise with that keyword.

Your Max CPC is determined by your website conversion rate, your target advertising profit margin, and your profit per customer. You can always guesstimate if you don’t know these numbers. You can use the following formula to calculate your own Max CPC and then compare it to the estimated CPC:

Max CPC = (profit per customer) x (1 – profit margin) x (website conversion rate)

Step #3: Create A Powerful USP

Your USP, or unique selling proposition, is what sets you apart from your competitors and gives your potential customers a reason to choose you over the others. Your USP answers the burning question “Why should I do business with this brand versus any and every other option?”

When it comes to AdWords, there are 3 important reasons to create a powerful USP. It will:

  • generate more traffic from qualified prospects and repel unwanted leads.
  • boost your sales conversion rates, receive more clicks on your ads, and convert more traffic into paying customers.
  • eliminate price comparison shopping. If you give potential customers a good enough reason to do business with you, the price immediately becomes a secondary issue. Which means you’ll be able to demand higher prices than your competition without hurting your sales.

So how do you create a really strong USP?

First of all, you need to identify your core strengths. Then you need to talk to your customers and actually listen to them. A great USP is built on customer insight. Therefore you need to ask your customers why they do business with you. It’s also a good idea to ask them what they dislike about your industry and what they wish you’d provide in addition to what you already do. Afterward, you can spend some time and analyze your competitors. The goal is to be unique. In order to create a really strong USP, you should study your competitors’ ads, websites, and marketing materials. This way you know what you need to do in order to stand out.

Step #4: Offer Something Amazing

What you offer in your AdWords campaign needs to be amazing. So amazing that it would be foolish for a potential customer to not take action. Again, the goal is to stand out from the crowd. It’s easier than you might think and should consist of the following four components.

  1. Valuable – Your product or service must be more valuable than the price. This doesn’t mean what you offer has to be cheap. Instead, you need to clearly define ALL of the value your product/service provides to your customer. You just need to make sure that it outweighs what your charge.
  2. Believable – Whenever you offer something that seems to be too good to be true, your potential customers might be skeptical. This is why you must provide a believable reason for your offer. For example, if you run a special sale give a reason WHY you’re offering such a steep discount. Ie. clearing out inventory, anniversary special, or end-of-the-year sale.
  3. Reduce of Reverse Risk – Let’s face it, people are afraid of getting ripped off online. One of the best tactics to minimize the risk to your customer is to offer a money back guarantee. This puts all the risk on your shoulders to provide excellent service, or else. This will help to improve your response rates and is a great way to stand out amongst your competitors.
  4. Call To Action – If you want your customers to give you a call, then make it easy and simple for them. Don’t expect your customers to connect the dots. Or worse, to have them search around on your website trying to figure out their next step. Use a strong call to action and keep it simple.

Step #5: Create A Compelling Ad

This seems like a no-brainer, but if you don’t have experience with AdWords it can seem unattainable. And it really is the most important step when it comes to creating a profitable ad. Here’s why… With AdWords, you pay ONLY when people click on your ads. So you ads have two very important jobs:

  1. Attract qualified prospects and encourage them to click on your ad instead of competitors’.
  2. Repel unqualified prospects so they don’t click on your ad and waste your ad budget.

This results in more traffic, more sales, and less wasted money on unwanted traffic. All of this leads to higher profits for you! Compelling ads with a high click-through rate (CTR) will boost your AdWords Quality Score, which will then lower the cost per click of your keywords. So yes, your ads directly affect how much you pay per click for each keyword you use. Great ads lower your costs, while awful ones raise your costs.

There are 4 key components to your AdWords text ads:

1. Headline – This is the most important part because it’s the first thing your potential customer will read. So you should try to include your keywords in the headline of your ads because Google will bold the text. This is a great way to stand out from other ads. And it also makes sure that you add is 100% relevant when it comes to search results.

Another awesome tactic is to ask a question in the headline. For example, if the keyword is “Los Angeles yoga instructor” then a compelling headline is “Looking for a Los Angeles Yoga Instructor?” Not only is part of the keyword in the headline, but the question will have potential customers nodding their head yes.

Since AdWords allows 25 characters for your headline, you need to make every letter count and be sure to use abbreviations whenever you can.

2. Description Line 1 and 2 – In your two description lines, it’s a good idea to reiterate your service, state your USP, provide social proof, and/or describe your offer. You should also include your call to action. You only have 35 characters for each description line, so be selective.

3. Display URL – The display URL is an area that is easily overlooked. But you shouldn’t just copy and paste your domain name in there. Instead use your Display URL to include your offer, call to action, USP, or anything else that makes your ad stand out.

Here are three examples of the yoga instructor keyword. Hopefully, this gives you an idea of what you can do:


Example of a good ad for the keyword “Los Angeles Yoga Instructor”:

“Los Angeles Yoga Instructor
Classes 7 Days a Week -Morning and Afternoon
First Class Free. Call Us Now!”

As you can see, the advertiser is targeting a specific niche – people who live in Los Angeles in need of a yoga instructor. They list when they have classes and also offer the first class free. This ad also has a very clear call to action urging the customer to “call now”.

Step #6: Congruent Landing Pages

By now your potential customer has searched for your product or services. They’ve found your ad to be compelling, clicked to learn more, and landed on your website. Now what? Well, if you’re like most first-timers, then your potential customer is on your homepage with no idea what to do next. The ad makes a promise the homepage didn’t keep.

Here’s the issue: your homepage is not an advertising landing page! Homepages explain EVERYTHING your business does, all of your products/services, and the variety of customers you serve. In other words, your homepage could never, ever be completely relevant to the keyword searched and the ad clicked.

You can avoid this mistake by creating a dedicated landing page that matches the keyword AND the ad. The goal here is to make the entire sales process completely congruent. This way your potential customer is consistently reassured that they’re headed down the right path.

This is why the most important aspect of your landing page is our headline. It’s the first thing your potential customer will read so it needs to get their attention, reiterate the offer made in the ad, and compel them to keep reading the rest of the page.

The copy of your landing page should also be relevant to the keyword searched and the ad clicked on. Include your USP, the benefits of your product/service, details about your offer, social proof, the credibility that you’re a legitimate business, and a strong call to action.

Step #7: Track Your Conversions

You’re almost ready to set up your campaign in AdWords, but there’s one last step: you need to track your conversions. If you bypass this step, you’ll never know which keywords and ads generate sales and which ones are losing money. This is crucial when it comes to optimizing your campaign once it’s up and running. Thankfully it’s easy to track your conversions. The main objective is to know which ads are actually generating sales. This can be down two different ways, depending on your business.

How To Track ONLINE Sales

If some or all of your sales occur online with an e-commerce shopping cart, then conversion tracking is pretty straightforward. You can use the built-in Google AdWords conversion tracking. The AdWords conversion tracking code can be found in your AdWords account under “Tools and Analysis > Conversions.

To create a new conversion, just click on the [+Conversion] button and follow the steps to define your conversion. Next, add the small snippet of code to your order form thank you page or receipt page. This code is similar to the Google Analytics code if you have that installed on your website. Whatever it is, it needs to be the final page AFTER a customer makes a purchase. This works because whenever a customer lands on your receipt page or thank you page, Google will automatically track the conversions in your AdWords. Best of all, there’s no reason not to install this before you turn on your ads.

How To Track OFFLINE Sales

This is great if you generate leads online, but you ultimately close the sale offline – over the phone or in person. Obviously, you can’t add a conversion code to your cash register, so what can you do?

  1. Create a conversion page in your sales process. For example, you can send all of your customers to a special page to get their receipt, create an account, or print a coupon. Think of some way to get your customer to go to a webpage and add the AdWords code to that page.
  2. Use a unique coupon code in your ads and landing pages. If you use the unique coupon code in your ads and landing pages, you can then match the calls and subsequent leads back to the ads and keywords that generated the sales.

Bonus Step #8: Optimize Your Heart Out

As soon as you enable your campaign and Google approves your ads, they’re ready to go live! Unfortunately, most campaigns aren’t profitable from the get-go. In fact, they require continual optimization to stay profitable. There are 3 main areas where you can improve the performance of your AdWords campaign.

  1. Your keyword bids. Once you start to generate clicks and sales, you need to adjust your bids accordingly. If your keywords generate sales profitably and you’re NOT ranked #1, then continue to raise your bids. If your keywords don’t generate sales, then you need to lower your bids or pause the keyword entirely.
  2. Your click-through-rate (CTR). Like I mentioned earlier, your ad’s CTR directly affects your quality score and determines how much you pay per click. In order to optimize your CTR, test different ads to see which version gets the most clicks.
  3. Your landing page conversion rate. There are a lot of tools to help test different versions of your landing pages. But if you’re just starting out, try Google Analytics Experiments (formerly known as Google’s Website Optimizer). It’s easy and free to get started. Once you have an account, you can create and experiment with two different versions of your landing pages. Afterward, you can measure to see which one generates the most conversions.

Awesome, you made it! By now your AdWords campaign should be set up and if you follow these steps you’ll be on your way to a profitable AdWords campaignDo you have any questions we didn’t address? Are you new to AdWords? Have you read our previous post on Google AdWords for Beginners? Let us know in the comments below, so we can discuss!

Want the latest marketing news? Sign up for updates!

Related Post

Subscribe to our newsletter
The latest news, articles, and resources, sent to your inbox weekly.
© 2023 Section 5 Media. All rights reserved.
Privacy Policy Contact Us Careers