What NZ Small Businesses Need to Know About Paid Search

In a typical month, 91.7% of Kiwi web users visit a search engine (and all but about 5% of those visits are to Google).

And yes, those search engine visits are under threat, thanks to the dramatic changes being wrought by AI. And today’s consumers do plenty of searching elsewhere, including on social media platforms, on Amazon, on YouTube and a variety of other sources.

For now, though, Google is far and away the place to be, attracting 547 million monthly NZ visits (vs 16.5 million for Bing and 12.9 million for ChatGPT).

The Importance of Ranking on the First Page of Search Results

The truth is, it’s really easy to get ranked on Google or Bing. Just publish any page online and Google or Bing will usually find you. That’s what search engines do.

The challenge, however, is for your website and its pages to appear on the first page of results for a given search term.

After all, you are competing with a billion other websites (and who knows how many billion web pages) to appear on that first page of search results.

Does it really matter if your website is not listed on that first page?

Well, yes, as this graph shows:

We humans are lazy. Nine out of ten of us, if we don’t find what we are looking for on the first page of Google search results, won’t bother clicking through to check out other pages. We will settle for what we find on page one, or we will start over with the new search term.

Actually, we are even lazier than that (or perhaps we have just learned to trust Google and Bing to deliver effective results for us). A third of us will click on the very first result served up by Google, 18% will click on the second result, 11% on the third — and the numbers continue to go downhill from there.

What all this means, in summary, is that if you’re not one of the first few natural results on the first page of Google or Bing, you just lost half of your traffic (and leads and sales).

Getting to the Top

Of course, not every page can be Number One, Number Two or Number Three search result on Google. So if you want to hit the top of the search engine rankings (especially for the most popular search phrases in your product or service category), sometimes you have to pay.

And pay, Kiwi marketers do, spending more than a billion dollars a year on Search Advertising, all aiming to be the answer for consumers looking for products or services.

Google Ads (formerly called AdWords) is Google’s online advertising platform that lets you pay to display your website at the top of search results.

Appearing in Google results can dramatically increase your local visibility. Unlike SEO (which can take time to have an effect), Google Ads offers immediate visibility: your business can appear for relevant searches as soon as your campaign is live​.

This can be a game-changer for small Kiwi businesses looking to compete, as it increases visibility, attracts targeted audiences, and lets you effectively compete in the digital marketplace​.

Effective Targeting in Google Search Ads

Google Search Ads appear on Google’s search engine results pages (SERPs) when a user’s query matches the advertiser’s keywords. These ads offer a direct way to reach potential customers at the moment of search, crucial for driving traffic and conversions.

Targeting is the process of ensuring these ads are shown to the right audience, maximising ROI and minimising wasted spend. The importance of targeting cannot be overstated, as it aligns ads with user intent, ensuring relevance and efficiency.

The Importance of Targeting

Targeting is vital for small businesses due to their often-constrained advertising budgets. Without precise targeting, ads might appear for irrelevant searches, such as a Christchurch bakery’s ad showing for “cake decorating supplies” when it only sells cakes. This inefficiency can drain resources, reducing the ability to compete with larger players.

Effective targeting ensures ads reach local customers, like targeting “best bakery Christchurch” to attract nearby patrons, enhancing conversion rates and brand visibility. It also provides a competitive edge in a market where every dollar counts, helping businesses stand out when potential customers are ready to buy.

How Targeting Works

Targeting primarily relies on keyword matching, where your ad appears when a user’s search query matches your keywords. Beyond keywords, additional targeting options include:

• Location Targeting: Essential for NZ businesses, this allows you to specify geographic areas, such as Auckland, Wellington, or nationwide. For local businesses, targeting specific suburbs or post codes ensures ads reach customers within service areas, like a Dunedin electrician targeting “electrician Dunedin CBD.”
• Audience Targeting: This involves reaching specific groups based on interests, demographics, or past interactions. For instance, targeting “parents” for a children’s clothing store in Hamilton can refine reach, though it’s more advanced and may require larger budgets.
• Device Targeting: You can choose to show ads on desktops, mobiles, or tablets. Given NZ’s high mobile usage, focusing on mobile might be effective for on-the-go searches, like finding “nearest café Auckland” via smartphone.
• Time Targeting: This allows scheduling ads for specific times, such as evenings for a restaurant targeting “dinner reservations Auckland.” It’s particularly useful for businesses with peak hours, like retail on weekends.

This layered approach ensures your ads are seen by the right people at the right time, enhancing effectiveness.

Determining Your Target Audience

Determining the target audience involves a structured approach:

1. Identify Your Target Audience: Start by defining your ideal customer. Consider demographics like age, gender, and income, as well as interests and behaviours. For example, a surf shop in Tauranga might target young adults interested in water sports. Understanding customer personas, such as “busy parents looking for quick meals” for a takeaway in Palmerston North, helps tailor ads effectively.
2. Choose the Right Keywords: Keywords should reflect what your target audience searches for. Conduct thorough research using tools like Google’s Keyword Planner, which provides insights into search volume and competition. For a Wellington florist, keywords might include “flower delivery Wellington” or “wedding flowers NZ.” Consider customer intent: “buy flowers online NZ” indicates purchase readiness, while “flower care tips” is more informational.
3. Set Up Location Targeting: Given NZ’s regional diversity, location targeting is crucial. For local businesses, focus on specific cities or suburbs, like “best pizza delivery Christchurch.” For broader reach, target nationwide, but ensure it aligns with your service area to avoid irrelevant clicks. Use post codes for precision, such as targeting “6011 Wellington” for a CBD-based business.
4. Consider Device and Time Targeting: Analyse customer behaviour to determine device preferences. In NZ, mobile searches are prevalent, especially for local services, so targeting mobile might be key for “nearest mechanic Auckland.” For time targeting, consider peak hours, like lunchtimes for cafés or evenings for restaurants, adjusting ad schedules to match.

Choosing the Right Keywords

Keyword selection is central to Search Ads success, and understanding match types is essential. There are four keyword match types:

Choosing the right match type depends on your goals:

• Use broad match for general terms to cast a wide net, like “coffee Auckland,” but monitor for irrelevant traffic.
• Use phrase or exact match for specific terms, like “coffee shop Auckland CBD,” to ensure intent aligns with your offering.
• Always use negative keywords, such as “free” or “DIY,” to exclude non-converting searches, enhancing cost efficiency.

For keyword research, start with seed keywords based on your offerings, then expand using Google’s Keyword Planner. Analyse competitors’ ads for ideas, and prioritize long-tail keywords, like “organic coffee shop Auckland,” which have lower competition and higher conversion potential due to specific intent. Regularly review performance data to refine your list, adding new keywords and removing underperformers.

Intent-Based Targeting

A big strength of Google Search ads is targeting users based on intent. Think of the customer journey as a funnel: at the top, people are just becoming aware of a need (they might see a Display ad or social media ad). In the middle, they are researching options. At the bottom, they have intent to purchase or take action.

Search ads are “pull” advertising – they pull in users who are actively looking for something (“plumber Auckland”, “best cafe near me”), meaning these users often have strong intent to act​. That places Search ads towards the end of the customer journey – great for driving conversions.

Display ads are more “push” advertising – showing ads based on demographics or interests, even if the person isn’t currently searching​. Thus, display is often used at earlier stages (brand awareness or reminding past visitors). For a small business, this means a Search campaign lets you capture demand (e.g. someone searching “tax accountant Wellington” can see your ad and call you immediately).

Remarketing, which we’ll cover later, helps keep your brand in front of people who browsed your site or fit your target profile, nurturing them until they’re ready. By aligning your campaign to the customer’s intent, you’ll get better results.

In short: Google Search ads reach customers when their intent is highest (ready to buy or inquire)​, while display and other campaign types help fill the funnel at earlier stages. Using intent-based keywords (what your customers would actually search for at purchase time) is key to success.

The Importance of Intent-Based Targeting

Intent-based targeting in pay-per-click search ads means showing ads to users based on what they’re trying to achieve with their search. For example, if someone searches “buy running shoes online,” they likely want to purchase, so your ad should offer shoes for sale. This approach ensures ads match user intent, like finding information, navigating to a site, or making a purchase.

Relevance and Click-Through Rates (CTR):

Aligning ads with user intent can boost click-through rates (CTR) because the ad feels relevant. It also increases conversion rates, as users ready to buy are more likely to act. This focus reduces wasted spend on clicks that don’t convert, improving return on investment (ROI). Plus, search engines like Google favour relevant ads, which can lower your cost per click (CPC).

For instance, showing an ad for “buy women’s boots” to someone searching for that exact phrase increases the likelihood of a click compared to a generic shoe ad.

This relevance ensures that the ad resonates with the user’s immediate need, improving engagement.

Conversion Rates and ROI:

Users with transactional or commercial intent are more likely to convert, as they are further along in the buying funnel. For example, targeting “book flights to Auckland” is more likely to result in a booking than “best travel destinations in NZ.”

This focus reduces wasted spend on clicks that do not convert, enhancing return on investment (ROI). For NZ businesses, where budgets are often tight, this efficiency is critical.

Cost Efficiency and Ad Performance:

By targeting users who are more likely to convert, businesses can reduce the cost per acquisition (CPA), making each dollar spent more effective.

Search engines like Google favour ads that are relevant to the user’s search, which can improve ad quality scores and lower cost per click (CPC). This is particularly important in competitive markets where ad costs can escalate.

Avoiding Wasted Spend:

Failing to consider search intent can lead to exhausting the daily budget quickly on irrelevant clicks, such as informational searches that do not convert. For example, targeting “how to choose running shoes” might attract clicks but few sales, wasting ad spend.

Intent Types

Intent-based targeting in PPC search ads involves aligning advertising efforts with the specific purpose or goal behind a user’s search query. Search intent refers to the underlying motivation driving an individual’s online search, which can be categorized into several types:

• Informational Intent: Users are seeking information, such as answers to questions or explanations (e.g., “best running shoes for beginners”).
• Navigational Intent: Users want to navigate to a specific website or page (e.g., “Nike official website”).
• Transaction Intent: Users are ready to make a purchase or perform a transaction (e.g., “buy running shoes online”).
• Commercial Intent: Users are researching products or services with the intent to buy in the near future (e.g., “running shoe reviews 2025”).

In the context of PPC advertising, focusing on transactional and commercial intents is typically most beneficial, as these users are closer to making a purchase decision, thereby enhancing conversion potential.

Implementation

To effectively implement intent-based targeting, follow these steps:

Keyword Research and Selection:

Identify keywords that reflect the user’s intent. For transactional intent, look for keywords that include terms like “buy,” “purchase,” “discount,” etc. (e.g., “buy organic coffee Auckland”).

For commercial intent, consider keywords involving comparisons or reviews (e.g., “best café in Wellington reviews”).

Use tools like Google’s Keyword Planner to find terms with good search volume and intent alignment, ensuring they match your business offerings.

Keyword Categorization and Campaign Structure:

Categorize keywords based on their intent to organize campaigns and ad groups effectively. For example, create separate ad groups for informational keywords (e.g., “coffee brewing tips”) and transactional keywords (e.g., “coffee shop Auckland delivery”).

Structure campaigns to reflect funnel stages: top-of-funnel for awareness (informational), middle-of-funnel for consideration (commercial), and bottom-of-funnel for action (transactional).

For smaller budgets, focus on bottom-of-funnel, high-intent keywords. For larger budgets, test a broader range, including top-of-funnel terms, in separate campaigns to capture a wider audience.

Ad Copy and Landing Page Optimization:

Ensure that ad copy and landing pages are aligned with the user’s intent. For transactional intent, the ad should clearly show the product or service and include a strong call to action (CTA), like “Order Now for Free Delivery.”

For informational intent, the ad might offer a guide or resource, such as “Discover Top Coffee Tips – Download Our Free Guide.”

The landing page should facilitate the user’s intent, such as a purchase form for transactional searches or a detailed blog post for informational searches.

Negative Keywords and Refinement:

Use negative keywords to exclude searches that do not align with your target intent. For instance, if targeting buyers, exclude keywords related to informational searches, like “free coffee recipes” or “DIY coffee machine.”

Regularly review search term reports to identify new negative keywords and refine targeting, ensuring ad spend is not wasted on irrelevant traffic.

Monitoring, Testing, and Optimisation:

Continuously monitor the performance of different keyword groups using platform analytics. Adjust bidding strategies based on conversion rates and ROI, increasing bids for high-performing, high-intent keywords.

Test different ad copies and landing pages for various intent categories. For example, test soft CTAs for informational ads (“Learn More”) versus direct CTAs for transactional ads (“Buy Now”).

Use broad match keywords with AI optimization, available in platforms like Google Ads and Microsoft Ads, to capture various search variations based on user intent and previous search behaviour. This can reveal additional insights without manual testing of numerous keyword variations.

Best Practices

To maximize the effectiveness of intent-based targeting, consider the following best practices:

Identify Intent Indicators:

• Use indicators like cost per click (CPC), competition, and search engine results page (SERP) features to identify intent. For example:
• High CPC and competition often indicate transactional intent (e.g., “buy flights Auckland” might have a high CPC).
• Presence of review sites (e.g., Capterra, Software Advice) or multiple ads (4-pack ads are 6x more likely for transactional intent) can suggest commercial or transactional intent.
• Informational intent keywords typically have lower CPC and competition, with SERP features like featured snippets or in-depth articles.

Campaign and Ad Group Structure:

Structure campaigns and ad groups around specific intent categories to ensure relevance. For example, have separate ad groups for “coffee shop Auckland” (transactional) and “coffee brewing tips NZ” (informational).

Avoid over-segmenting, such as using single keyword ad groups (SKAGs), which can complicate management for small businesses. Instead, group related keywords by theme and intent.

Testing and Iteration:

Run tests in separate test campaigns to keep budgets distinct, allowing for clear performance comparison. For instance, test top-of-funnel keywords like “kitchen remodelling ideas” in one campaign and bottom-of-funnel keywords like “kitchen remodelling company near me” in another.

Monitor campaigns regularly, adding negative keywords as needed to refine targeting. Conduct negative keyword research before launching to minimize initial waste.

Leverage Technology and Trends:

Stay updated with industry trends and algorithm changes, as search intent can shift based on current events or market changes. For example, during holiday seasons, adjust keywords to capture seasonal intent, like “Christmas gift ideas NZ.”

Utilize AI-driven features, such as broad match with intent consideration, to automate some aspects of targeting while maintaining control over high-value keywords.

Challenges and Common Mistakes

Despite its benefits, intent-based targeting can face challenges, particularly for NZ small businesses:

Assuming Uniform Intent: A common mistake is assuming all keywords related to your product or service have the same intent, leading to a one-size-fits-all approach. For example, “running shoes” could have informational intent (“best running shoes for beginners”) or transactional intent (“buy running shoes online”), requiring separate targeting.

Neglecting Updates: Failing to update keyword lists and intent categorization over time can lead to outdated strategies, missing new search trends or behaviors.

Over-Reliance on Automation: While AI tools can help, over-reliance without understanding intent can result in irrelevant ad placements, wasting budget on low-value clicks.

To mitigate these, continuous monitoring and optimization are essential, ensuring strategies remain aligned with user behaviour and business goals.

Spend some time considering intent-based keywords for your own product or service category, splitting them into the four segments:

• Informational Intent: Users are seeking information, such as answers to questions or explanations.
• Navigational Intent: Users want to navigate to a specific website or page
• Transaction Intent: Users are ready to make a purchase or perform a transaction.
• Commercial Intent: Users are researching products or services with the intent to buy in the near future.

Then pay specific attention to transactional and commercial keywords, and start brainstorming a list of relevant keywords in those two intent-based groupings.

Want to know more about how NZ small businesses can master Paid Search, and other aspects of Digital Marketing?

Check out our online training course, Practical Digital Marketing for NZ Small Business.