Keywords for Search AdsFor a local business running text ads on Google or other search engines, the answer is: You win when your ads get you leads at a cost that’s worth it to you.

But first your ads have to beat out competing ads on the search engine page to win clicks or phone calls.

Here’s a high-level look at how to keep score on both:

Are Your Pay-Per-Click Ads Beating the Competition?

Running paid search advertising campaigns is a continual round of monitoring, tweaking and culling your target keywords, ad groups, ad language, and landing pages.

Google looks at how well all those moving parts work together, plus the dollar value of your bid for ad clicks, and decides where to position your ad on its pages.

You can see how well you’re doing vs. the competition on Google by checking the Average Position number in Google AdWords reports and, for more detail, the Auction Insights feature.

For Google, the bottom-line marker of success for an ad or a keyword is the click-through rate, the number of clicks divided by the number of times the ad is shown.

Google also rates your ads and landing pages with a Quality Score that measures their relevance to searches, and how closely the search terms, ads and landing pages match.

Is SEM Advertising Worth It for Your Local Business?

Search ad campaigns for local businesses work best when they lead to a call or a click on your site that can be counted as a “conversion”, the point at which a web searcher turns into a lead.

Conversion actions on your site could be:

  • Filling out a form for more information, to make an appointment or get on an email list.
  • Viewing a store location map or driving directions page
  • Printing a coupon
  • Clicking a link to send an email
  • Buying a product online

(A bit of code on the web page reports back to the search engine’s tracking software that the action happened.)

Phone call conversion tracking is a bit more complicated:

  • On mobile phones, users can click to call the number on a Google ad, logging a conversion.
  • You can get a unique phone number from Google (for free) to insert in your ad. Calls to the number get forwarded to your phone and tracked as conversions.
  • Call tracking services also provide unique phone numbers for landing pages that track conversions by ad campaign.

If one of your search ads results in a call or store visit outside these trackable channels, you can manually enter it in Google’s tracking software.

Once you have your conversion goals set up, Google can give you a read on your “cost per acquisition” (CPA). In other words, they calculate how much are you spending for a lead, by comparing your cost per click to conversion rates. You can use Google’s Conversion Optimizer to run your search ad campaigns to hit a target CPA by automatically adjusting what you bid for ad clicks.

In your business, if you make one sale for every 10 leads and your typical sale is $20, then each lead generates $2 in revenue for your business, on average. If you’re spending $1 on average CPA on search advertising – then congratulations! You are winning.

Big fat caveat if you’re serious enough to have read this far: The intention of this post is to help you wrap your head around local search advertising for small business, not to suggest a complete strategy—there are a lot of complexities in search ad campaign management and the competition are professionals who do this all day, running sophisticated software. Hiring a pro or doing it yourself, just stay focused on what makes sense for your business to generate leads and sales.