Google AdWords is a closed-loop money-making machine... if you do it right. With traditional advertising such as magazines, newspaper, radio, television, phone book, highway signs, and transportation ads, you focus on impressions - and you HOPE that people see your ad and pay attention to it.


While it’s true that you spend money on advertising and you get sales back, it’s much more difficult to track where your offline sales are coming from. Sometimes marketers try to ask questions like “where did you hear about us?” - but this is similar to amatuer pollsters trying to guess election results. With a background in advertising, I’m not saying that other forms of advertising are an ineffective part of your overall marketing strategy, I’m just saying it is difficult to measure their effectiveness and that they are typically better suited to larger brands.

On the other hand, I would call Google AdWords a “closed loop advertising system.” What I mean by that is that unlike other advertising where you spend money and don’t know exactly how much you get back, with AdWords you should know exactly what you get back. If you don’t know, then you’re doing it wrong.

If you are selling online, then you should have value tracking installed. Enough said. Tracking the value will show you exactly how much you spent and how much you made. You can see it right in your AdWords account. If you’re doing it right, then the amount you made will be much more than what you spent.

If you are gathering leads online and trying to convert them into sales, then understanding their value is a little more complex. Here are a couple of suggestions:

  1. You must set up a CRM system. Zoho is a good, less expensive option and free for just a few users. Salesforce, Sugar, Microsoft Dynamics, and Netsuite are all great. When you capture a lead, you must attribute the source of the lead back to AdWords.
  2. Strive to capture leads online. You’re advertising online; you should capture leads online. Try using a landing page that captures the leads information online and puts it directly into your CRM. This also helps remove the human-mistake factor.
  3. Track AdWords phone calls separately. If you have to, set up a phone number just for AdWords. When that phone number rings, you know it’s an AdWords sale. You may have to modify your website to display a different number for AdWords referrals. Record the sale in your CRM system.
  4. After the lead is in the CRM, you need to track the value of that sale. But at this point, you should be able to figure out how much you’ve spent to win this sale. Don’t forget to capture the cost of salesperson salary and commissions.

Using this type of methodology, you should now know how much you are spending on AdWords and how much you are making on AdWords when turning leads into sales.

It’s all about closing the loop in the sales process. Once you’ve done this, then you’ll see how dependable AdWords can be for your success. Also - you’ll start thinking about AdWords as a sales commission expense rather than just an advertising expenditure.