Koozai > Blog > AdWords for Small Businesses – The Complete Guide

AdWords for Small Businesses – The Complete Guide

| 16 minutes to read

bigstock-Key-Local-1735685In recent times AdWords has faced criticism for becoming too expensive for small businesses to use. Whilst there’s no denying that the cost of AdWords has increased, and will continue to increase, I believe that if you run your account well, there is no reason why AdWords can’t be successful for small and local businesses.

This post will cover my top tips and tricks for getting the most out of your AdWords spend as a small or local business.

Decide On The Services You Are Going To Advertise On

Don’t just advertise on all of your services! Decide which products or services it is effective to advertise on. For example, if a product has a very small profit margin then it might not be suitable to use AdWords unless the conversion rate is very high, because the cost may not produce an effective ROI.

I’d avoid using AdWords for any products which could be ‘upsell’ products. For example if someone bought a bike from a local bike retailer online, I wouldn’t advertise on bike helmets because this is an item which could easily be upsold with the bike purchase using other cheaper advertising methods such as email marketing.

Similarly with services, if you are an independent travel agent, where your main service is holidays however you also offer travel insurance, I wouldn’t use AdWords to promote the travel insurance service because it’s a highly competitive marketing and you can upsell customers much more cost effectively than if you sold that product on its own.

Pick Your Keywords Effectively

Now that you know which of your services you will be advertising, you need to pick your keywords effectively to avoid bidding on high cost keywords which may not actually convert as effectively.

Tools you should use to do your keyword research:

Google Analytics: Although organic keyword data is becoming more limited, it is still valuable. Look over the last 6 months and see which organic keyword terms have resulted in conversions on your website. Keep a note of these so that you can use them as keywords, or at least use them as a guide for structuring your ad groups effectively.

Google Autocomplete gives you keyword ideas which are fresh, current and definitely have search demand. because these terms are often new, it means that they have lower levels of competition and so will be cheaper for you to advertise on. A tool called Ubersuggest scrapes the Google Autocomplete data so is a great tool for getting these ideas quickly or on a larger scale.

If you have an existing AdWords account, then your AdWords Search Query Report might just be home of some of the best keyword ideas you can get your hands on. Export to CSV and snap up the search terms which have converted to add them as keywords

Because the tools listed above aren’t considered traditional keyword research tools, you may find that these terms you end up with are slightly long tail, which is not surprising because 15% of searches performed on Google every day are completely unique.

This is great because these terms will be cheaper than terms you’d find on tools such as the AdWords Keyword Tool. If you add these to your campaigns and receive a message saying ‘low search volume’, you should leave them in the account anyway for a little while as they may eventually be triggered and the cost when they do will be minimal.

Sometimes if a keyword has a really low search demand, AdWords automatically deem it as ineligible to run for auction. If this happens, or if a lot of your keywords say ‘low search volume’, I would recommend adding them using modified broad match. To do this place them on broad match and then add a + before each important term in the keyword and it will act as a way to narrow down broad match targeting. The ‘+’ tells AdWords that that part of the keyword must feature in the search query, however the words can be in a different order, or spelt differently.

For example if the term ‘activity centres for disabled children in Hampshire’ was deemed as having too much of a low search demand to go to auction, then I would make it a modified broad match keyword; ‘+activity +centres for +disabled +children in +Hampshire’. In my experience, this usually allows the term to become eligible for auction.

It’s also vital you use negative keywords to cut down on wastage. Graeme has put together a video on this:


Account Structure And Daily Budgets

In an ideal world, you should be as granular as possible with your account structure, and set up individual campaigns for each product or service category. As a small business, you might find that this means having a very low daily budget for each campaigns, which might mean some campaigns run out of budget quickly whilst some never use their allocated spend.

My advice would be to avoid having any campaign budget lower than £7 per day, depending on what your average cost per click is. The reason I recommend this is because if your budget is too small, AdWords will estimate the maximum number of clicks you can get based on your maximum CPC bid, even though often your max CPC bid is much higher than what you actually pay. It will then determine that you aren’t always eligible for every auction because your max CPC is high and your budget might only allow you to get two clicks if it was set at a bid of £3. In actual fact you only usually pay £2 per click but because your bids are high and your budgets are low, you won’t be entered to every auction. By having a higher daily budget on a campaign you will be eligible to show more often.

If you have a set amount per month that you are able to spend, you might find that some days don’t use all the spend that they could. The bid strategy section of this post will help you optimise using this, but don’t forget that you could also work out what your total spend has been to date for the month in your campaigns, and then work out what you have left to spend for that month and increase your daily budgets accordingly until the end of the month when you will have a new lump sum of money to spend.

Although Google have changed AdWords so that you can layer bid adjustments within any one campaign for different locations, I would still recommend having separate campaigns for separate locations. Having them separate allows you to keep control over the spend for each location, and you can still use their bid adjustment features for becoming even more granular with your geographical targeting.

For example if you were a Tailor on Savile Row, you would benefit from a campaign which targets only London with term such as ‘men’s custom wedding suits’. You could then have a second campaign which targets the whole of the UK excluding London, with terms such as ‘men’s custom suits London’. You could use bid adjustments on the London campaign by increasing your bids by 4% for any users within 5 miles of Savile Row because these may be most likely to convert. You can also ensure that if the campaign which geographically targets London converts better, then you can increase your daily spend for that area and reduce it for the other campaign. If you have all locations within one campaign, all you can do is adjust bids rather than actually controlling daily spend.

Don’t waste your budget by bidding on competitors if your budget is limited. You will have a low CTR, it often doesn’t convert that well and it can be expensive. Instead, make sure you have a separate campaign for your own brand, where you can bid on your brand name and variations of it. If you rank number one organically but don’t have PPC on your name, someone else could take up that ad space! Research has shown that you are likely to lose conversions as a result. Branding campaigns in AdWords have a very low Cost per Click and convert the best in many instances.

There are also lots of regular checks you can make:


Bidding Strategies For Small Or Local Businesses

Bids are one of the most influential factors on the success of an AdWords account, and are a great way to be resourceful with your ad spend as a small business.

Bids and Average Position

Try to ensure your keywords have an average position between one and two if possible, because this increases the likelihood of a good CTR which results in a strong Quality Score and means you may pay less per click because Google deems your ads as more relevant. There are lots of ways to get a strong average position and your bids play a big part in this. Make sure you review your average position and bids at keyword level, so that you only increase bids on keywords which need it and don’t waste ad spend on keywords which are performing well. Although this is more time consuming, it will see your ad spend become more effective.  Balance increasing your bids with other optimisation techniques to ensure your average position is strong.  If you are a service or product where people do a lot of comparison / research (for example designer sunglasses retailer), then you might actually get more cost effective conversions from positions slightly lower down the page (although I wouldn’t go too far down the page). Try experimenting to see which works for your business.

Review lost impression share

Review Lost Search Impression Share due to Rank at keyword level, so you only increase keyword bids where they are required, and where there is potential to gain ownership of a larger share of the search demand.

Time of Day Bid Adjustments

In the settings tab, you can schedule your ads and set bid adjustments for certain times of the day.

Use the scheduling feature to make sure your ads are only running when they need to be. For example if you are a recruitment consultant who is always busy on Monday mornings, you could schedule your ads so they don’t run during that time because you already know you will have enough enquiries to deal with on that day and don’t need additional AdWords enquiries. This ensures you are only spending money on advertising when it’s needed.

Bid adjustments allow you to keep some visibility but also chose when you want your ads to be most visible based on when enquiries are most valuable to you. For example if you are a local bakery, you might know people will be researching places to get lunch from 12pm to 1pm, so you could increase your bids by X% during these times because you know that those clicks are most likely to result in footfall to your store.

Location Bid Adjustments

In the same way as time bid adjustments, you can also be very granular with your location targeting and set bid adjustments by location.

If you have several different locations in the local area, you can now target them all within one campaign by layering your location targeting and bid adjustments. For example if you were an estate agent with offices in Southampton, Winchester and Basingstoke, you could target ads to users in all three locations via just one campaign. Because AdWords location targeting is based on the users IP address (unless they include a location within the text of their search query), I would recommend targeting the whole of Hampshire and then using bid adjustments to increase bids by 5% in important locations. This is because IP addresses are not always accurate for judging users locations and you don’t want to miss out on potential customers.  Your campaign would target the whole of Hampshire but you would set bid adjustments in the settings tab so that users in Winchester, Basingstoke and Southampton have an increased bid.

Device Bid Adjustments

The device someone is using is also an important factor of the context of their search and can tell you what the intentions of their search is. Using the bakery example, mobile traffic would be really valuable as you know users often search on their phones when they are out and about, so a strong mobile bid adjustment which keeps you in a good average position on mobiles is important.

If your objective is to drive traffic to your website, rather than footfall to your physical business location, then mobile bid adjustments might be lower because they are of less value to you. For example a travel agent might find that users don’t really convert over their mobile website because they can’t see all the details of holidays as easily, so they might chose to have lower mobile bid adjustments.

As a rule, mobile bid adjustments should always be lower than desktop bid adjustments because mobile traffic has less competition and so is cheaper. As Enhanced Campaigns roll out on the 22nd of July, you may find that mobile bids need to increase as more advertisers will be using mobile advertising.

Bids Stack on top of each other: Bid layering

Bid adjustments are a fantastic way of making your ad spend more cost effective and using it most when you most need it, but beware that all bid adjustments stack on top of each other.

For example, if you bid £1 as your standard bid, then if you increase bids for users in Winchester by another 10% it would be £1.10, and then if you also have a bid adjustment of +10% between 1pm and 2pm it would increase by 10% of £1.10, so your final bid would be £1.21 between 1 and 2pm.

Ad Extensions – Getting More For Your Money

Ad extensions allow you to gain more ad space on the page, for the same price as a regular click! This is a must-have way to make your ad spend go further and it also increases your CTR massively, which in turn increases your Quality Score and may actually result in a lower actual Cost per Click.

I recommend setting them at campaign level at minimum for every campaign, and at ad group level if you have more ad group specific extensions. For example if you have an ecommerce site and one ad group covers a particular product that comes in several colour variations, the sitelinks could be placed at ad group level in this instance and link to each colour variation.

Your ads must be in the top positions (one to three) to be eligible for ad extensions, so make sure you keep your bids up.

You can learn more about ad extensions here, but the ones I recommend in priority order are as follows:

  1. Location extensions
  2. Sitelinks
  3. Call extensions (especially if you target mobile devices – make sure you schedule them & try out a Google forwarding number with conversion tracking)
  4. Offer extensions
  5. Image extensions (Beta – apply for them here)
  6. Seller rating extensions
  7. Social extensions
  8. App extensions (if you have an app)
  9. Email extensions (contact your Google rep)

AdWords Is More Than Search

AdWords search advertising is the most established form of AdWords advertising, and as a result it’s the one which most businesses use. This means that it can be very expensive for some industries. There are many other AdWords formats which might be much more cost effective for your business;


Remarketing is a clever use of targeting because it works for branding and is a form of display advertising but it also converts extremely well if done correctly.

My top advice for Remarketing is to make sure your ads have synergy with your website and are branded well. Remember to use the frequency capping functionality in the settings tab of every remarketing campaign you create, so you don’t stalk your visitors too much.

Product Listing Ads (these are replacing product extensions)

If your site is an ecommerce site, Product Listing Ads (PLAs) are a great way to get extra ad exposure alongside your standard text ads. Set your PLAs up in a separate campaign and remember to optimise these campaigns with lots of negative keywords. If you have products which don’t tend to convert often or have a very high cost per conversion then you can exclude the product. PLAs are created in Google AdWords although you will need to have linked your Google Merchant Centre account and AdWords account for them to work.

YouTube Advertising

There are lots of interesting BETA’s for YouTube advertising around at the moment, and many more soon to be announced. This makes it a great platform for trialling new ad formats which not everyone will be using, and as a result will be less costly.

It’s a well-known fact that videos are a huge catalyst for encouraging conversions, whether they are testimonials or ‘how to’ videos. YouTube advertising can be done in so many ways, from remarketing to your YouTube channel subscribers and audience, to TrueView ads

I have seen very competitive industries where a click on the search network can cost around £17,yet convert just as well (if not better) on the display network, at just a fraction of that Cost per Click.

If you haven’t given YouTube advertising a try yet, I’d recommend at least trailing it in its own separate campaign. If you aren’t sure about setting it up, ring the AdWords helpline and often they are happy to set it up for you or provide you with detailed instructions as video ads are an area Google are keen to push at the moment.

Time Is Money

I appreciate that as a small business, your time is extremely valuable and not only are you overseeing the business AdWords campaign but you’re probably skilfully juggling a plethora of other tasks too. Automated rules probably sound more scary than they are, but they can be a great way to keep on top of optimisation without having to spend as much time on the account.

Rules can be scheduled to run daily, weekly or simply each time a certain criteria is met. If you set them up with care and read any email alerts which are sent to you when the rules run, they can work really well and save you lots of valuable time.

One simple automated rule you could set up to keep on top of the average position of your keywords is to increase bids by 4% on a weekly basis on keywords where the average position is below 2 based on data from the last 14 days. You can set a maximum CPC limit so the bids will never get higher than you are comfortable with and Google will send you an email each time this rule runs so you can review the changes.

If you are really pushed for time, and would prefer to let your AdWords account ‘optimise itself’ you should be aware that nothing is going to be more effective than human optimisation, but Google’s Automated Bidding Strategies can help.


Google are trying to get more small and local businesses on board with features such as “AdWords Express” where they set up your AdWords account for you and make the process seem effortless. The set up process is effortless, but from looking at a number of these kind of ‘express accounts’ I would highly recommend that you do not use them. You cannot access or change the account through any of Google’s normal AdWords tools or even the AdWords interface. This means you can’t even perform basic optimisation such as increasing bids or adding negative keywords. From the accounts I have seen using this feature, they tend to have a poor Click through Rate and low average positions which means they probably pay more than they need to per click. In short; avoid AdWords Express like the plague.

I hope you have found this guide helpful and that it has helped you get started with AdWords for your small business. If you have any questions or experiences you want to share please leave them below.

Image credit

Key Local by Bigstock Photo


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