You might be grossly wasting money with Google Pay-Per-Click ads.

To make it worth your while, you must know how to measure your results. And if you have multiple keywords and ads running (which is pretty much always) you need to know which ones are working.

I just talked to a small business owner from Ontario who said he was “paying Google” to “come up first”. This is an immediate red flag. What did he mean?

In reality, he was running an Adwords campaign based on a few major keywords in his industry. He was bidding a high cost per click so he could have top ad placement. Then he was sending people to the Home page of his website.

He could not tell me if anyone who saw his Google ad had actually paid for his services.

To be fair, he was talked into this by a shady Yellow Pages salesman.

Now there are a lot of things wrong with the scenario I just outlined. And I see it happen again and again. Things like:

– sending clicks to a generic website instead of a specific landing page with one clear call to action

– thinking that the top spot of the PAID results is worth the same as the top of the organic search results (it’s not)

– not knowing what an Adwords lead is worth

– not knowing if you are getting leads from Adwords

– if you are getting leads, not knowing which ad they came from

To avoid these pitfalls, there are some basic things you need to know.

Small Businesses Should Pay For Sales, Not For Website Traffic

Google Adwords is not cheap. You need to see tangible, measurable results for your dollars.

What is the point of driving people to your site? Isn’t it ultimately to make sales?

So Adwords must be bringing in qualified prospects. At the very least, you need to get an email address you can add to your list. If you can’t sell them something now, maybe you can sell them something in the future. Then that email still has a value above 0.

Once you get a lead from Adwords, you can see how many leads it takes to make a sale.

If you offer a one-time service or product, look at the profit from that sale. If you offer many products or an ongoing service, look at the lifetime value of a customer. Let’s call that amount V.

Now you can calculate how much a lead is worth —> it takes X leads to make 1 sale (V), so your leads are worth V/X.

If you had to pay more than V/X to get 1 lead, then you are losing money.

Identify When You Get A Lead From Adwords

There are two simple ways to find out if a lead came from Adwords.

1. Ask them

So let’s say when I click on your Adwords ad it just takes me to your Home page. That means, when I end up emailing you I look the same as a person who found your site another way (from typing in your web address directly or from the organic Google search results).

You could just ask me “how did you find us?”.

The problem with that is so many people are not paying attention. They will say “on Google”, but they won’t remember if it was from a paid ad or from the regular search results.

2. Send all Adwords clicks to a unique form

This is the best way to keep track of your Adwords leads.

You set up a specific page to link up with your ads. It has a form on it (typically asking for a name and email). Then you know that ALL the leads coming through that form are from Adwords.

One easy way to do this is to use a landing page service. We talk about creating and testing landing pages here.

Once you know that the lead came from Adwords, you can assign it the value we figured out above.

Set Up Conversion Tracking To See Which Ads Perform Best (and delete the flops)

Now that you have covered the receiving end, let’s look at the source.

You can take a small code tag from inside your Adwords account, and add it to the form on your web page. Every time someone fills in the form, the code will send data to Adwords. Then it will show up in Adwords as a “conversion”.

A conversion means that the internet user completed an action. Usually that is filling out your form (to become a lead).

Google has very clear instructions on getting a conversion tag.

If you are tracking leads, you should have the Count setting on “One conversion” and then choose to track conversions on a “Page load”.

You’ll end up with a tag that looks something like this:


Click in the box and copy that tag.

If you have a website provider you could just send them the tag. You’ll ask them to add it to the submission/confirmation dialog of your website form.

If you need to do it yourself, you can usually find a document for whatever webpage or form service you are using. We like to use the landing page service Unbounce. Here are their instructions for adding a conversion tag.

Last thing…

It’s important to understand how a conversion is counted.

It doesn’t help to know how many people saw your form. What you want is people who filled out the form and clicked the button to submit the data.

Every form has a message that displays after this point (a confirmation after a submission). So if your Adwords tag is added to that part of the process, Adwords will count that as a conversion.

That way, when you look at your Adwords stats, you can see which ads and keywords generated conversions. And a conversion in Adwords means a lead for your business.

On the flip side, if you run Adwords for a while (let’s say a month), you will see some ads that have no conversions.

It’s probably a good idea to turn those ads off.

Now you will be able to tell if Google Adwords is helping or hurting your business. Leave a comment below if you are still unsure about your Adwords results.