How to Expand to New Markets Using Google Ads

23 July 2021

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Many businesses use Google Ads to market their products or services locally and internationally. The pay-per-click (PPC) advertising platform is a robust solution with extensive capabilities, which is likely why over 7 million advertisers use it for marketing their businesses.
If you’re looking for ways to expand into new markets, Google Ads can be a valuable tool in your arsenal. However, it’s critical to plan your expansion and execute it carefully to avoid wasting your budget.
In this article, we’re going to look at:

  • Whether you should use Google Ads or not.
  • How to expand into new markets using Google Ads.
  • Key factors you should consider before expanding.

Should You Use Google Ads?

There are many arguments against using Google Ads, especially for small businesses since managing the ratio of cost vs. ROI might be challenging. When Google Ads is a Paid Search advertising platform, others may argue that SEO is free and can deliver the required results without paid advertising. And they have the point. If you have the time and patience to build up your SERP rank, SEO can certainly help you get to a top spot – under the paid ads. From the other side, SMEs recognize the value of Google Ads, with every two in five running a Google PPC campaign reporting that the top ads earn 65% of clicks from people using purchase-intent keywords.
Google Ads is a great tool to grow into new markets, opening a world of opportunities. However, it’s extremely easy to expand too rapidly, costing you valuable time and money. If you’re planning to expand into new markets, you would want to use these best practices.

1. First Things First: Preparation

Before you can expand, you need to consider your current position. Start with the below three steps that help you with the foundation of your expansion plan:

  • Determine the potential cost of expansion.
  • Evaluate your marketing budget.
  • Develop a reasonable timeline.

Unfortunately, there’s no one single way to define an “ideal” Google Ads budget. Your costs are influenced by the type of campaign you run, competition, chosen keywords, and industry. You can check a rough estimate by looking at WordStream’s last Google Ads Industry Benchmarks report. Small to medium businesses typically spend around $10,000 on campaigns. However, the average industry CPC may affect that number. For example, the legal industry has a higher average CPC of $6.75, and may need to look at increasing their monthly budget to $100,000 or more. The e-commerce industry, however, has a significantly lower average CPC of $1.16. They may spend the same amount to get more results or decrease their budget to $10,000 to $20,000 to get a similar number of clicks. For comparison, large retailers may spend up to $50 million per year on their ad campaigns.
To bring more clarity, let’s look at an example. Let’s say that an e-commerce business wants to get around 15,000 clicks per month. To achieve that goal, they run a single campaign containing five ads groups, each with three ads and five keywords. At an average CPC of $1.16, their minimum budget may be:

  • 1,000 Clicks x 3 Ads x 5 Ads Groups = 15,000 Clicks
  • 15,000 x $1,16 = $17,400

You can use this example as a basis (along with experimental ads) to determine the potential cost of your expansion. As you prepare to expand, carefully study your current campaign costs and ROI.

2. Evaluate Your Opportunities

It’s great when you already know the market you are expanding into, however, in most cases, it’s a challenge to select the right one. Below are the very first questions you would like to ask yourself before making a decision:

  • Is there a clear demand for my products or services in this particular market?
  • What’s the level of competition I’ll be facing?
  • How easy is it to break into this market?
  • Is my offering affordable in the region?
  • Is there a clear opportunity for a high ROI?

Despite the questions being rather general, you have to be critical, particularly if it is your first expansion. It’s vital to ensure that you identify an opportunity that will offer an excellent return on investment. Choosing the wrong market to invest in can be a costly mistake.
When you’ve identified potential markets, it may be tempting to expand to several immediately. But don’t. The cause is very reasonable – expanding too quickly is a surefire way to overextend your budget. Campaigns will typically waste 20-50% of their budget initially. It takes time and effort to build brand awareness, learn the local idiosyncrasies, discover and overcome market-specific challenges and optimize your accounts to start spending the budget efficiently. If you try to expand to several new markets, the wastage may drain your budget before you get a return on your investment.
Whenever you target a new market with Google Ads, your account becomes more complex. Every new market means new research, additional optimizations, more resources, and higher risks. If you want to get the most out of your investment, take it slow, target only one market at a time, develop it to its full potential, and then move on. Below are the tips to make your research easier:

  • Start By Expanding Into Easier Markets. Not all markets offer easy expansion opportunities and some may have significant local competition or other barriers to entry. Start by expanding into a market that already shares key commonalities like language and behavior. This way, your assets and processes will adapt easier.
  • Account for Cultural Differences. Each culture and market will have unique traits, preferences, and idiosyncrasies. Simply translating your ads into the local language may not be enough. Account for everything in your ads and landing pages, from color preferences to localized selling propositions.
  • Use Techniques That are Already Working for You. Don’t start from scratch immediately. Utilize what’s already working in existing markets, and then make changes depending on the results you achieve.
  • Commit To An Account Structure Across Campaigns. With a clear and consistent structure, you’ll have a strong foundation for control. You’ll also have a much better understanding of how to manage the account, read reports, and determine budgets. Make sure to set up custom goals for new markets.
  • Use Consistent Naming Conventions in a Single Language. Even though you’re customizing campaigns for local language, use uniform naming practices throughout the account. That will allow for easier optimization and reporting.

3. Understand Your Metrics and Aim for Smart Bidding in a Long-Run

Typically, businesses who are new to Google Ads will start with campaigns that use manual bidding. It’s a basic bidding strategy that gives users complete control over their ads and their maximum cost-per-click right down to the keyword level. While a manual bidding strategy can be a great way to set a baseline, it takes a dedicated PPC expert or team to continually monitor and improve the campaign effectively. Manual bidding is best suited for start-ups that are at the beginning of their ads journey. With fewer campaigns to manage, you won’t need as many internal resources to manage the account. However, eventually a lack of data, increased complexity, and time-intensive management requirements will make automated bidding a better option. This will allow Google Ads to take full advantage of the available data to provide you with the best results while requiring less manual input from you or an internal PPC team.
What is Smart Bidding? Smart Bidding is a Google Ads technology that uses a learning AI to track and interpret a wide variety of signals. The system uses that data to adjust your bids to reach your specific campaign goals automatically. There are several benefits to using automated Smart Bidding, most significant is the amount of time you’ll save. While you’ll still need to monitor and adjust your campaigns, you’ll be able to spend your time on valuable actions rather than continually changing manual bids. Additionally, Smart Bidding can take advantage of several data points that are not accessible to users. It uses this data to try and get you high-value conversions and automatically adjust bids accordingly. The data may be instrumental if you’re expanding into a new market that you’re not already intimately familiar with. The system can make adjustments and recommendations based on information to which you don’t have access.

4. Continually Evaluate and Optimize Metrics: Examples of Metrics on Google Ads

Metrics are how you determine whether your campaigns are performing well or if there’s an underlying issue that you must identify and fix. There are five key metrics you should be tracking apart from ROAS. These metrics will quickly let you know if there’s a problem hiding in your funnel:

  • Impressions. This metric shows how often your ad is displayed and viewed by users.
  • Click-through-rate (CTR). It shows how many people clicked on your ad compared to how many people saw it.
  • Cost-per-click (CPC). Actual CPC may differ per click and is determined by how much you paid for each individual click in an auction. For example, if you paid $1,000 for 200 clicks, your average CPC is $5.
  • Conversion rate.
  • Cost per acquisition (CPA).

You can dig deeper into measurement by reading our latest piece about the development of successful campaigns on Google, Facebook and LinkedIn.

Read Now: Increase your ROI by Running Effective Campaigns

Knowing which numbers to track is one thing, however, knowing how to evaluate good performance is another. Various factors, including your industry, competition, and the market itself will influence the results. Let’s have a look at the example with some metrics from different industries. To illustrate the differences, we have e-commerce, consumer services, and health & medical industries. We’ve compared Search and Display Network averages in the tables below:

These metrics can help you navigate the campaign by evaluating your results and making improvements. For example:

  • If you have a high CPC but a low CTR, you may need to improve your quality score (QS). In order to improve your QS, you have to write more compelling ad copy or improve the landing page.
  • If you have a high CTR but a low conversion rate, you need to determine why your site isn’t converting visitors and make the necessary changes.

You or your PPC team need to pay close attention to these metrics, evaluate campaign performance, and continually optimize ads to get the best results.

Conclusion

Google Ads is an excellent way to expand into new markets, but it can be a technical and time-consuming process. It’s critical to prepare for each expansion by evaluating the business’ finances, capabilities, and right opportunities. It makes sense to target only one new market at a time to prevent overextending the budget and it’s crucial to continually optimize metrics to get greater results. If you need a hand with crafting your expansion plan, our Google Ads PPC team can help you achieve the best results. Get in touch with us to give your marketing a boost.

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