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Ads for the iced teas

4 parts, about 20 minutes. Your work saves itself in this browser.

Before you start: what you need to know

SEA (Search Engine Advertising) is the paid ads that appear on Google above or below the normal results, labelled "Sponsored". People in this role decide which searches the ads appear for, what to write in them and how much to spend, and then check with the numbers whether the spend brings in more than it costs.

  1. You pay per click

    The ad can appear a thousand times for free: you only pay when someone clicks it. The price of a click is called CPC (cost per click) and it's decided by an auction between everyone who wants to appear for the same search.

    For exampleIf a click costs €0.50 and you get 200 clicks in a month, you spend €100.

  2. Keywords and negative keywords

    Keywords are the searches you want to appear for. Negative keywords are the ones you DON'T want to appear for, because the people searching them won't buy. They stop you wasting money.

    For exampleA teapot shop wants to appear for "cast iron teapot", but excludes "used cast iron teapot" and "how to clean a teapot": the people searching those don't want to buy a new one.

  3. The ad

    A good ad repeats what the person searched for, states a concrete benefit and has a call to action (order, discover, try). In Europe you can't promise a health effect for a food, or say "the best" without being able to prove it.

    For example"Cast iron teapot 0.8 l | Keeps the heat for a long time | 24-hour shipping. Discover."

  4. The numbers: CPA and ROAS

    CPA is how much you spend to get one order (spend ÷ orders). ROAS is how much you take in for every euro spent (revenue ÷ spend). With ROAS below 1 you spend more than you take in.

    For exampleYou spend €100 and get 4 orders of €40: CPA = 100 ÷ 4 = €25; revenue = €160; ROAS = 160 ÷ 100 = 1.6.

What you'll do

  1. Choose which searches the ads appear for and which to exclude
  2. Choose the best ad out of four
  3. Calculate the month's clicks, orders, CPA and ROAS
  4. Decide what to advise Luca based on the numbers
Done reading, start part 1
1

Choose which searches to appear for

Before you answer

For each search ask yourself: could the person typing it buy our product today? If yes, it's a keyword. If they want free information, things we don't sell, or to make it themselves, exclude it.

For exampleFor teapots: "buy cast iron teapot", yes; "DIY cast iron teapot", no; "electric kettle", no, because we don't sell it.

For each search decide whether to add it as a keyword or exclude it (negative keyword).

ItemAddExclude
iced tea kit
sencha iced tea
buy iced tea online
homemade iced tea recipe
free iced tea
iced tea maker

Why it matters. With paid ads you pay for every click. Negative keywords stop you paying for people who will never buy.

2

Choose the ad

Before you answer

Read each ad and check four things: is it about the product searched for? Does it have a call to action? Does it avoid health claims? Does it only say things that can be proven? One no is enough to discard it.

For example"Magic teapot that helps you lose weight" makes a health claim: banned. "The most beautiful teapots in Italy" can't be proven.

Which ad would you publish?

Choose the ad

Why it matters. A relevant ad gets more clicks and Google rewards it with a lower cost per click. Health claims and claims that can't be proven can be misleading advertising.

3

Do the maths

Before you answer

You go in order, because each number is needed for the next. 1) Clicks = budget ÷ cost per click. 2) Orders = clicks × conversion (2 in 100 means clicks ÷ 100 × 2). 3) CPA = budget ÷ orders. 4) ROAS = (orders × price) ÷ budget.

For exampleBudget €100, clicks at €0.50: 200 clicks. Conversion 3 in 100: 6 orders. CPA = 100 ÷ 6 ≈ €16.67. If the product costs €20: revenue €120, ROAS 1.2.

Using the data on the card, how much does a month of ads bring in?

Why it matters. ROAS says how many euros you take in for every euro spent. Below 1 means you spend more than you take in: the campaign as it stands doesn't pay off.

4

What do you suggest to Luca?

Before you answer

If a campaign is losing money (ROAS below 1), increasing the budget only loses more. First fix what turns a click into an order: the product page, the chosen searches and the measurement of results. Remember that in the EU conversion tracking with cookies requires consent.

For exampleIf the teapot page doesn't show shipping costs, many people leave without buying: fixing it raises conversion without spending a single extra euro on ads.

ROAS is below 1. Choose all the useful actions (and only those).

What do you suggest to Luca?

Why it matters. First you fix what turns a click into an order, then you increase the budget. In the EU, conversion tracking with cookies requires consent.

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Your SEA specialist exercise

Luca has written to you: Ads for the iced teas. You'll solve it in 4 parts, in about 20 minutes.