SHOULD I USE GOOGLE ADS?

Heard of Google before?  Do you use it? Or are you more of a Yahoo kind of guy/gal?  Maybe you just bought a new computer complete with Internet Explorer, and are happy to kick it with Bing?  Good for you! Societal norms don’t influence your decision. I respect that. Unfortunately, the rest of the world ain’t with you on that one.

Google owns two of the biggest search engines on the planet, the most used email platform, the most popular internet browser, widest used maps application, broadest advertising network, and countless other applications used by billions of people.  Chances are, they know quite a lot about you, and as marketers we stand to benefit from this substantially.

Easily the most frequent question that I get asked, is whether or not they (as a company/business/freelancer) should be using Google Ads.  It’s all pretty daunting and confusing, and Google’s attempts at simplifying the platform for smaller introductory users (Adwords Express) has a tendency to target traffic too broadly and spend money on less relevant user searches.  It’s basic, and unfortunately you get what you pay for especially in this case.

If you’re asking me if you should try Google Ads, the answer is a resounding ‘yes’.  Any business stands to benefit from more traffic, attention, and leads.  But what will it cost you to try it effectively? That’s the caveat.

Getting more eyes on your business isn’t difficult with Google Ads, the flow can sometimes be almost endless.  The difficult part is filtering that flow of traffic, to the point where the only attention that you’re paying for, are those people most likely to buy your product.  This sounds easy, but it’s where most people get overwhelmed by the platform, and inevitably end up wasting a lot of money on traffic that just isn’t relevant. That’s where hiring someone like an account manager can end up making you much more money than if you tried to manage it all on your own.  In other words you should try Google Ads, but if your account isn’t set up to only acquire relevant traffic and then track exactly what percentage of that traffic converts, then you’re wasting your time and money.

WHAT ARE GOOGLE ADS?

Google Ads come in a few different shapes and sizes, in different places throughout day to day life.  It’s beyond the scope of this article to hammer down into each one, but here’s the quick gist of the main ones:

 

SEARCH ADS

Type something into Google.  It may show you anywhere from 1 to 4 text ads at the top, or a product carousal.  These are all paid ad locations.

 

DISPLAY ADS

Primarily banner-type ads.  These show up anywhere a website has elected to show Google Adsense ads, apps, or one of Google’s display partners.  There are literally everywhere. You see them every day, whether you realise or not.

 

YOUTUBE ADS

Ads on Youtube.  They annoy you every day when you’re just trying to watch what you want.

 

GMAIL ADS

Ads that sit at the top of your Gmail inbox tabs.

 

APP ADS

Ads that appear in various apps, usually free-to-use apps.

 

SHOPPING ADS

If your search term is interpreted by the algorithm as shopping for a particular product, you may be served shopping ads showcasing individual products and their prices.

 

COST PER CLIENT ACQUISITION & RETURN ON AD SPEND

Before we talk about getting into Google Ads, we need to get one concept down.  The costs of acquiring a client (CPA) or the sales return on ad spend (ROAS). Unless every client you’ve ever had has been via referral, then you’ve no doubt experienced the cost of marketing.  It can be expensive, and the kicker is that it’s not even guaranteed to work. It’s just one big game of trial and error. Defining, measuring, and reporting on success in marketing is extremely important. Probably understated.  If you can’t measure and quantify your return on investment in some capacity, then you’re shooting in the dark. One of the great things about digital advertising is that your return on investment can be quantified, usually fairly accurately.  

Typically you can calculate your cost per customer acquisition (how much dosh it costs you in advertising to get a new client), or a return on ad spend (how much dosh you put in, and how much you got back).  Broadly speaking, the former (CPA) typically applies to service providers, and the latter (ROAS) is typical of a retailer. In either case, based on your business and the costs associated with delivering your product or service, you need to identify a target CPA or ROAS.

So why am I banging on about CPA and ROAS?  Because the sustainability of your advertising boils down to these metrics, and whether the economics of spending money on advertising to acquire those sales is actually feasible.

THE COST OF EXECUTION

Gone are the days of free advertising and exposure (unless you’re virally creative or lucky….I am neither).  Facebook gave us a little taste of free advertising for a while there, but hastily yanked it back and demanded us to pay for customer reach.  People whined, but nothing is free. They’re a business. That’s life.

Google’s platform is seeing a similar, albeit gradual and subtle movement in their search engine results pages (SERPs).  Google Ads are taking up more real estate than ever before, as detailed by this awesome article by David Deppner.  Customers clicking on your organic search results may not cost you anything per click per se, but it’s not the cakewalk to the top that it used to be.  Google’s algorithm is so much smarter these days, and demands high quality content that people engage with. Creating high quality content is not only expensive, but backlinks cost money, and good SEO experts aren’t cheap.  

Google Ads also cost money (spoiler, sorry).  If you’re looking at running Google Ads, then you have two options:  

  1. Build and manage your own account, or
  2. Hire someone to build and manage your account for you

Let’s look at each individually.  

SELF MANAGED

On paper, this is the cheapest option.  If you’re just starting out or run a small business then chances are that you’re the company’s default digital marketing expert (as well as HR manager, logistics, accounts payable and receivable, you get the gist), and as such will be tasked with learning this new platform and skillset.  Lucky you’ve got plenty of spare time, right? Take it from someone who jumped into Google Ads many many years ago to try and generate business for a brick and mortar store – you’re going to want to invest some time into learning.

One thing Google Ads does exceedingly well is spend your money if you’re not very specific about your targeting.  Small oversights in your account can easily burn through cash, and without any real return on investment. Many people dive-in, get burned, and exit scorned.  Good times! If you’re wanting to fly solo, I can’t stress enough – educate yourself.

Running the actual ads themselves obviously cost money, and if you can get your campaigns to the point where your ad spend and conversion rates result in a profitable CPA or ROI, then you’re laughing.  Unfortunately fine-tuning your skills to that point of success can take a long time, and take its toll on your wallet and mental wellbeing. So while deciding to DYI your ad account seems cheaper, in the long run it may just end up costing you money.

HIRE SOMEONE (GOOD)

Making sure you hire somebody who is actually good at managing Google Ads is a topic on it’s own but be warned – there are plenty of people who are bad at it, and that in itself is a costly exercise.  However, if you do engage a good account manager, you can reasonably expect the following costs:

  • Ad spend (duh)
  • Account setup
  • Monthly retainer

A manager’s monthly retainer can vary from a fixed amount, to a set percentage of your ad spend.  Naturally in this scenario there are more factors contributing to your overall expenses, which can make it tougher to achieve a CPA or ROI that’s acceptable.  The big advantage is that a good account manager should increase your rate of conversion, which in turn will drive down CPA and increase ROI. If you’re a small business owner or freelancer, it can be tough to justify having someone manage your account unless you are spending a decent amount of money on ads, have a high item/service price point, or high lifetime customer value.  Sometimes the economics just don’t work out.

In both scenarios it’s apparent that the costs can add-up.  Do you take a stab at managing it yourself and potentially waste a pile of cash?  Or do you take a leap and hire someone to manage it for you in the hopes that they can create a profitable stream of customers?   This is the hardest part of being a small business owner. You need help, but it’s too expensive, so you have to piece it together yourself.  But you’re also trying to do everything else to keep the engine running and putting money in the bank. Nothing about being a small business owner is easy.  

INTENT vs IMPULSE

Let’s look at whether you might benefit from Google Ads.  Firstly, you’ll want to assess whether the type of product that you offer is suitable for this particular stream of advertising.  In general, I like to look at products or services benefiting from two types of human interaction – intent or impulse.  Sometimes it can be a combination of both.  

For example, let’s look at a company that offers corporate catering.  Typically customers will require the services of a caterer and will act with intent by searching for such a provider (whether that’s via search engine, asking around, etc).  However, if customers are shown ads for corporate catering, there’s a low likelihood that they will act on impulse and decide to use their services.  It’s unlikely that someone will decide to host a corporate event because the catering looks so damn good.

On the flip side, customers probably aren’t going to deliberately go searching for a gelato store (apart from those killer cravings).  Their customers are usually acting on impulse when they walk past or see a sign. Wish.com built a multi-billion dollar company by running ads on Facebook for items that people didn’t actively search for or need, but were likely to act on impulse to buy.  McDonalds runs ads around dinner time. It’s marketing 101.

There are also businesses in the middle that have varying degrees of intent and impulse directing their customers’ purchasing decisions.  Car companies will have customers actively searching for a new car after their Ford POS finally bites the dust, while simultaneously servicing customers who saw an ad for the newest drop-top on the market, and gotta have that.  Customers could be actively looking for a dentist, or shown an ad for a new dentist that makes them reassess their level of satisfaction with their current dentist. Office furniture suppliers benefit from people actively looking for a new desk, and also from people that saw an ad for a new desk and realised that they don’t actually have a workspace.  The mix differs from company to company and of course the range of products or services that they offer.

Take a good look at your products and services.  Which mix of intent and impulse drives customers to buy from you?  If you don’t know, ask some of them.

In terms of application, businesses that benefit from intent driven behaviour will typically see better results on the Search Network (google.com) and covert at a much higher rate.  It makes sense, they are warmer traffic and further into making a buying decision. If you’re all about driving impulse purchasing, then Youtube and Display Network are more beneficial (Facebook is arguably even better).  Though re-targeting and general brand awareness works for every business, and these are excellent via Youtube and Display Network.

WHAT WILL MY ADS COST?

There are many tools that will use Google’s API to give you an estimate of what each click on your ad will cost you.  The cost per click (CPC) is determined by the number of competitors that are bidding on the same keywords as you, as well as what they are willing to pay for that click.  Google uses an auction system to determine the CPC, which means that on particular search terms the CPC can quickly become astonishingly high. Here’s what Wordstream details are the top 10 most expensive keywords…

 

Keyword Cost per Click (CPC)
Insurance $54.91
Loans $44.28
Mortgage $47.12
Attorney $47.07
Credit $36.06
Lawyer $42.51
Donate $42.02
Degree $40.61
Hosting $31.91
Claim $45.51

 

On the surface you’re probably gasping at the thought of paying $45+ per click.  Since you’ve made it this far in this article, hopefully you’ve worked out that it’s fine to pay an exorbitantly high amount per click if you are able to generate a positive return on your ad investment.  One thing you’re probably noticing about all of the above terms is that they all pertain to a very expensive product or service, so companies are willing to spend more to acquire the customer. This is the core principle of advertising on Google (and any other media/platform), which is why it’s so important to work out what you can afford to spend in order to acquire a customer and then measure those costs and acquisitions.

It used to be easier to find out keyword search volumes and costs per click, but Google has stashed their Keyword Planner away now inside of the Google Ads platform.  You don’t need to be actually spending any money to take a look, but you do have to go through the process of setting up your Google Ads account. Once you’re in there the Keyword Planner will let you get a glimpse of what keywords are typically costing per click, and how many people are using those search terms per month.  

My favourite keyword research tool is KWFinder (http://kwfinder.com), although it is a paid service.  They do offer some free searches – if you sign up they’ll give you 5 freebies per 24 hours which is probably enough for most people starting out to sneak a peek under the hood for the main keywords they are looking at.  

YOU CAN LEAD A HORSE TO WATER, BUT…..

Once you have an idea of what each click is going to cost, the other main factor that you need to consider will be your conversion rate (conversions / clicks). Simply put, how likely are people to purchase from you if they land on your site? Unfortunately working out your conversion rate for the most part is a massive stab in the dark, and can be strongly subject to your own personal bias.  Disregard any “industry guides” that you’ve read about conversion rates – they are worthless.

Some factors that can dictate your rate of conversion:

  • Buyer’s readiness to purchase/book/commit
  • Relevance of your keywords to your product/service
  • Relevance of where your ad was shown to the user
  • Relevance and quality of your landing page
  • The quality, price, or value proposition of your product
  • The perceived credibility of your company
  • How you stack up vs your competitors

 

Naturally the higher the rate of conversion, the better your return on investment, so improving any of these areas will help your chances of turning a profit relating to your ad spend.  Start by taking a good look at your site.

Would you buy from a site like yours if you landed there?

Is it clear, professional, easy to use?  

Is your product competitively priced?  

Are you offering real value in what you are selling?  

Is your product/service actually good?

Be honest with yourself, because you’ll quickly find out if you’re not.

Whether you decide to try and manage your ads on your own, or employ an expert to do so, the key point is to know what a customer is worth to you (in dollars) and to measure your activities as tightly as possible.  That way you can make an accurate and informed decision about the feasibility of advertising on Google (or anywhere else).

WANT SOME FREE ADVICE?

14 + 10 =

Whether you're managing your account on your own, or someone else is managing it for you, I offer open and honest account audits completely free of charge.

  • Get peace of mind that you're running your account effectively
  • Sleep well at night knowing that your account manager is doing a good job
  • Find out what else you could be doing to improve your return on investment

Just enter your details and I'll be in touch asap.

WANT SOME FREE ADVICE?

Whether you're managing your account on your own, or someone else is managing it for you, I offer open and honest account audits completely free of charge.

  • Get peace of mind that you're running your account effectively
  • Sleep well at night knowing that your account manager is doing a good job
  • Find out what else you could be doing to improve your return on investment

Just enter your details and I'll be in touch asap.

6 + 9 =

Ryan Thwaites

Google Ads & Analytics
Data & Business enthusiast and over-analyst
Lantern Room is a collection of my analytical musings.