The importance of Google Ads

Without visitors to an online store, there are no sales and no revenue. Therefore, it is important to determine and analyze the different sources of visitors (aka "traffic"). Most online businesses receive traffic from the following channels: Search engines (especially Google), Affiliates (including price comparison sites), Direct traffic and (to a lesser extent) through incoming links.
 

In the knowledge base, we will discuss all sources. On this page, we zoom in on the visitor source traffic from search engine. Within this source, we distinguish between unpaid (SEO) traffic and paid traffic (ergo Google Ads).  The latter will be discussed:

What is Google Ads?

Google Ads (in the past "Adwords") is Google's advertising program that lets your ad appear in Google in the list of "sponsored links" or "ads. These are found above and to the right of the search results. They have a small yellow indication 'adv'. 

Advertising on keywords

With Google Ads, you advertise on keywords. These are words or word combinations that Google users type in to search for something. Once a Google user types in a keyword that you advertise on then your ad is displayed.

But of course that's not free. As soon as someone clicks on your ad in Google, Google charges you a fee. This is also called a pay-per-click principle (there are also pay-per-sale platforms, think Beslist for example). Behind Google Ads is an auction mechanism, which makes ads on keywords on which many parties want to be found more expensive than ads on keywords that are less in demand. A simple example: When you show an ad when someone searches for "mortgage," Google might just charge 15 euros per click to your online business(!). But when you show an ad when someone searches for 'dog food' or 'roof tiles' you charge a fraction of this amount.

Using Google Ads

The Google Ads program has become a fairly comlex system. You can master the basics in a day, but to really understand the program and get everything out of it, you may need a specialist. There are many companies on the market that will properly set up your campaigns once for an agreed upon amount and/or maintain them on a subscription basis. Until then, it is smart to read up on the subject and perhaps create an Adwords account yourself to explore the possibilities. Google regularly gives away free advertising credit via flyers, which you can use for this.

 

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Why is Google Ads important when I buy/sell an online store?

97% of the Dutch use Google as a search engine, which makes Google Ads the most widely used online advertising medium in the Netherlands. For many online businesses, the flow of visitors from Google Ads is extremely important in relation to sales. There are even some online businesses that are completely dependent on Ads (why we think this is not healthy can be read under 'analyze visitor flow').

The correct setup of Google Ads determines to a large extent whether you are throwing money away or making money, so take this aspect into consideration in every acquisition.

Roughly speaking, the calculation goes as follows: You advertise in Google Ads on keyword "bike rack" and pay Google, for example, 20 cents per click, then 100 visitors to your online business will cost you 20 euros. A conversion rate of 3% is generally considered good, so let's assume that the 100 'bought' visitors lead to 3 orders. So then per order that comes in through Google Ads you have to deduct 6.67 euros from the margin in the profit determination. (Not to mention any returns ed).

You will understand that many elements come into play here. In general, it is best to advertise on specific keywords. The more specific the keyword, the greater the chance that you can offer what the visitor was looking for, which increases the conversion rate and reduces the average advertising costs per order. What's more, specific keywords are often cheaper to advertise on, which also reduces costs. However, this takes time and money to learn.