The Small Business Strategy Guide to Google AdWords


Promoting products and services while trying to compete with mega-giants like Amazon and Walmart is often a daunting task for small business owners. The good news is that Google AdWords has created a way for advertisers to do just that. Bigger brands may have an advantage when it comes to PPC, but they don’t hold all the cards. Even with a small budget, you can get impressions and clicks on Google with a smart account  structure and the right targeting options.

Having consulted hundreds of small and medium-sized business (SMBs) owners and marketing managers, my eyes have been opened to the struggles they face every day.

The Problem

Let me take a second to set the stage. Anyone who tells you that AdWords is easy or that they can guarantee you numbers is lying to you. AdWords is complicated and difficult to master, but when done right, it can yield amazing returns.

Not only does it take preparation to master but it takes time and affection. Think of your AdWords account like a new dog.

Small Business AdWords Guide

Is your AdWords account looking at you with sad eyes?

Set it and forget it doesn’t work with your dog and it doesn’t work with AdWords either. You need to love your account, take care of it, clean it up, and feed it. I can tell you it loves the taste of money. If you take the time to nurture your account it will yield you a return.

Keep it Simple

One misconception I hear time and time again is that you need a large account with thousands of keywords. You don’t. Running a small business means you wear multiple hats. You don’t need a huge account to be successful. In fact with that amount of keywords you have a greater opportunity to overreach and waste money.

Start small and progressively grow your account. I mentioned before that you need to spend the time to nurture the account, so the smaller you keep it the less time you will need to put in.

Tracking Your AdWords Progress

Tracking is one of the most important things you can do to your account. I highly recommend setting up Google Analytics with your website for in-depth analysis. Otherwise, conversion tracking is a must, as it will tell you which Campaigns, Ad Groups, Keywords, Ads, etc. are performing for you while also telling you where you are flushing money down the drain (do I have any plumbers out there?).


Don’t Overreach

Overreaching can be an account killer and it can take a couple forms. For example, incorrectly targeting your ads. Whether it’s location, device, or network targeting or simply the match types you choose for your keywords, incorrectly targeting ads is going to waste your money. Make sure you have refined your targeting choices and your match types to focus your traffic down to pre-qualified viewers. Prequalifying will allow you to get higher click-through rates and with that higher conversion rates. This means more $$$$$ in your pocket!

Don’t Overpay – Set a Consistent AdWords Budget

Another common struggle I see is trying to be the top advertisement on the page. While it is important to get up to the top, it doesn’t need to happen, especially if you have a small marketing budget.

Let’s take a step back and look at budgeting. Setting a daily budget is important when it comes to how much money you will spend in a month. Here is a simple formula to budget setting:

(Total Marketing Budget * Percentage towards AdWords)/Days in the Month = Daily Budget

I can’t stress enough how you should set your budget and stick with it. Don’t go in day after day and change your budget. If you set everything correctly, you will not go over budget and you wont have to pause your account two weeks into the month. Changing your budget frequently can actually reduce your account’s performance, because Google will have to recalibrate how they show your ads.

AdWords Bidding for Small Businesses

Bidding helps determine positioning, so calculate how much you should be bidding based off of your budget to ensure an ROI. Try this formula to determine your bids:

Revenue or Customer’s LTV * conversion rate = Max Bid

Once you have determined your max bid, your quality score will determine your ad positioning. The higher your quality score the more likely you are to rank towards the top of the page.

Next Steps

Now that we have focused our traffic, set our budget and determined our bids, we are well on our way towards running a successful (profitable) account.

Remarketing is a great next step for the average small business owner. Remarketing will allow you to show your ads to people who have previously shown interest in your products or services. If you are worried that remarketing won’t work for you, just keep an eye out for our WordStream display ads. I’m sure now that you have read our blog you will be followed around by our offerings. Remarketing often yields high conversion rates and is a great way for small business owners to spend their precious advertising budget.

AdWords is very complicated and can often be frustrating, so follow the strategies I’ve listed above and you will be well on your way towards AdWords success. Remember, in the end Adwords is about turning a profit so focus your strategy around being profitable. Don’t worry if you are not the first ad on the page because you can and will still make money while on the side of the page. All you should worry about is staying in the black. This will help you drive more traffic and grow your business over time. Once you’ve got your account to a spot where you can devote a larger budget, you can then take that opportunity to move up in the results. But for now, start small, refine your targeting and manage your bids and budget closely.

One last thing I would like to point out is this neat comment section we have below. Please don’t hesitate to respond with questions or comments. And let me ask you this: As a small business, what struggles have you faced? What has and has not worked for you in the past?

Image via Sukanto Debnath

Ben Cohen is a Customer Success Specialist at WordStream and supports WordStream’s managed services team on numerous accounts. That means his days are full of training and consulting clients on their PPC accounts. Born and raised in Boston, Ben has not wandered far from home, having studied Marketing and Management at the University of Maine, Orono. Ben is also a diehard Boston sports fan. When he is not out hiking New England, you can find him at America’s most beloved Fenway Park. Go Sox!


Jul 15, 2013

Very good post, I've bookmarked it. Have you found targeting very specific, long-tail keywords an effective way of saving money?

Ben Cohen
Jul 15, 2013

Hi Jonny,Thanks for reading and great question! I have found long tail keywords to be effecitive in certain circumstances. I know you probably hear this a lot but it really comes down to your business, industry, account, etc.The easist way to waste money is by bidding on broad match head terms without negative keywords. So I highly recommend making sure you have a strong list of negative keywords to ensure your traffic is qualified to see your ads. Thanks again!-Ben

Randall Magwood
Jul 16, 2013

My Adwords account used to look at me with the sad puppy eyes lol. But i've found that by sticking to a good budget, and using the money that i make from Adwords - to re-invest into Adwords - keeps my business thriving and profitable. Especially with backend marketing.

Jul 16, 2013

I think the biggest problem for small business is really that AdWords is very complicated for beginners. Keep it simple is really very important.

Mike Russell
Jul 28, 2013

Thanks for the tips! Setting an AdWords budget is a really smart idea!

Jul 30, 2013

I helped my friend run his AdWords campaign. The big problem as small business is surely the budget, and my friend insist to to be the top advertisement on the page. I think I should apply all your stragegy. 

Aug 24, 2013

It is very easy to lose you hard earned money through google adword campaign, therefore it is necessary to study the system, create a budget or hire an expert to settup the campagn.Great piecie, thanks for sharing. 

PPC Specialist
Aug 26, 2013

Very nice post Ben, the biggest miscenception i found in most of the small business owner, is about number 1 postion. Most of the advertisers believe that sucess comes only if you are at top position or atleast in top three. However, truth is quite different, if you keep yourself between 5-10th position, you can cut down 50% of cost per conversion. I have bookmark your post and will certainly show it my clients in future.    

Sep 19, 2013

We are about to plan a Goggle adword display network campaign and are grateful for the guide given -Is it correct that it is also a good idea to have several different sized ads prepared for uploadingbecause some sites only have specific sizes available for display adwords?Thanks...Denis per pro: Konst-Verk Studios

Ben Cohen
Sep 30, 2013

Hey Dennis, I would absolutely recommend setting up different sized ads for your display campaign which will allow you gain greater impression shares and have more opportunity to show your ads. 

Ben Cohen
May 01, 2014

Hey Dennis,Thanks for reading! Nursing wear is a great fit for AdWords. I have a couple clients globally selling similar products. Best of luck!

Sep 24, 2013

Great read and some handy hints. This was very help particularly as I am trying to figure out how I can use Adwords for my online nursing wear site.

Feb 20, 2017

I am curious to find out what blog platform you happen to be using?

I'm experiencing some small security problems with my latest blog and I'd
like to find something more secure. Do you have any suggestions?

Nov 24, 2013

OK. So where can I get good advice on how to start with Google ads? Thanks. John

Ben Cohen
May 01, 2014

Sign up for WordStream and our consulting services

Angie - Online marketer
Dec 18, 2013

I was wondering how do I get the conversion rate before I start the google adwords campaign?

Ben Cohen
May 01, 2014

Hi Angie,Thanks for reading!It is impossible to get your conversion rate for AdWords if you dont run anything. One suggestion is that you can refer to organic data in Google Analytics. While it is not as targeted it atleast gives you a benchmark to work with.If you see your AdWords conversion rates are too low then you are probably bidding on very broad terms that are not highly relevant. Keep the keywords tight and targeted and always set negatives!-Ben

Augustus O
Dec 28, 2013

Great write up. I wrote a comprehensive article on Top Google tools that could be used in promoting small businesses, where I referenced this blog post. Here is the link to the article 

Zach @small business strategy
Jan 28, 2014

Excellent post Ben! At least everyone now knows that Adwords is not an easy job like counting from one to ten. It requires in depth analysis of your target market and as well as your competitors. It's a process wherein every details counts.

Apr 16, 2014

A great read, I'm going to keep coming back to it as a refresher. I've recently taken up a position where I'm dealing with an Adwords account for a small fashion company, I have about a years experience working with AdWords so I'm kind of in the deep end! Looking through the account, most campaigns have around £2 daily budget per campaign. So my question is, would it be best to focus on one campaign, increasing the budget and keyword list rather than trying to deal with five different campaigns with very small budgets?Cheers!

Ben Cohen
May 01, 2014

Hey Adam, Thats a great question and it comes up quite a bit in my consultations. I would recommend setting up campaigns based on product type or return on a given group of products. By the old standards of AdWords each of those campaigns will get its own budget. That is not necissarily true anymore. A newer release from Google allows for the set up of share budgets within the shared library of Google. This way you can properly segment your campaigns and keep better organization without having to worry about keeping small budgets for each campaign.I hope this helps!-Ben

Oct 08, 2014

A great tips Ben,I run a small advertising agency, Adwords is very good choice for small and medium solution for low cost and high impact advertising.With low budget i usually using automatic bidding, so just let adwords system do the job :D, don't get the top spot, but get the most clickfor limited budget.Cheers

Nicolas Colombres
Jun 22, 2015

Excelent post indeed! Thanks for the insight. This will be helpfull for us :D

Ben Cohen
Jun 23, 2015

Thanks Nicolas! I am glad you enjoyed it.

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