Technology / SEM strategies

Is AdWords too expensive for small business in 2016?

With AdWords more competitive than ever, here's what your small business can do to turn those expensive clicks into more customers.

28 June 2016 by

$7 per click, $12 per click, $40 per click (gasp) – AdWords is more expensive than it used to be. But is AdWords too expensive for your business? Who can compete with those companies spending up big on AdWords?

You can.

AdWords no longer works as well for businesses selling low-cost products (under $100), but there’s still money to be made if your business ticks these two criteria:

  1. You’re selling a service where a sale is worth hundreds or thousands.
  2. You’ve got a bunch of competitors advertising in your niche.

Here’s how to compete with the big boys and girls:

"Remember, sales and enquiries don’t happen in your AdWords account, they happen on your website."

1. Compete on your turf

When someone searches for an accountant in Fortitude Valley and finds your ad, you’d better send them to a page showing that Fortitude Valley is your turf. If you have an office there it’s easy (show your address, show your office), but if not there are other ways to show it:

  • ‘We have 24 clients here.’
  • ‘We often meet clients for coffee on James St.’
  • ‘Ben’s Burgers on Winn St is one of our favourite local clients.’

Geography is one of the most important reasons people choose a business, and many larger businesses will have no genuine link to your area, so you need to win that battle. Own your turf.

2. Compete service by service

When someone searches for ‘air-con installation’ (and finds your ad), you’d better send them to a page about your air-conditioning installation service.

Not your homepage.

Not your range of air conditioners.

Not your cleaning service.

Give people exactly what they’ve asked for and you’ll get more sales than a competitor who doesn’t do the customer this common courtesy.

3. Don’t look like a scammer

Alongside the established companies in your industry, there are dozens of ‘websites’ trying to cash in on your market. These include:

  • Scam sites.
  • Brand new companies who’ve popped up overnight.
  • Websites that target customers locally but outsource overseas.
  • Lead generation sites who sell their customers for a commission.

These websites have one thing in common – lack of transparency. They do not want anyone to see their real business model, so they can’t show their company (no address, names, photos, owners, staff, clients, results, or testimonials).

You’ll get lumped in with them (and lose sales) unless you have a website that shows the reputable company behind your website.

Beyond your AdWords account

Notice we haven’t spoken about bidding or keywords or other AdWords geek-speak? That’s because simply working on the finer mechanics of AdWords will leave you short. Remember, sales and enquiries don’t happen in your AdWords account, they happen on your website.

So, where to start?

It’s a competition remember, so start where you have an unfair advantage. Advertise your most profitable or most popular service in your town or suburb and you’ll be hard to beat.

Clicks still may not be cheap, but they will be focused on your strengths and hopefully now worth more to your business than the $2, $8, or $25 they’re costing you.

Are you still finding Google Ads affordable in your market?

Dave Gillen

improves under-performing AdWords campaigns at Bankable Online Marketing in Brisbane.

Comments

  • Good article- thanks !

    • Glad you liked it Podicare, and I hope it’s given you some ideas for your market 🙂

      Dave

  • My brief answer to your question Dave is a resounding Yes. I’m a service/education/arts small business (Bottom of the discretionary spending rung!). I’ve used adwords for about 12 months. Its complexity is the biggest problem, initially. Reducing the CCP can be done over time as you learn to work the system, find and adjust target words, suburbs or geographical areas, and hone your adverts and the amount you apply to the adverts. Much research is needed and I’d suggest it is the time factor (learning, followup, research) that most troubles micro biz. The bottom line for me is, my business comes through search, and Google have this tied up. Other marketing is ticking away, but Adwords has been affordable, and timely.

    • Awesome job Kath! What you’ve done is not easy on a tight budget, so it’s definitely a credit to the time you’ve put into it. Glad to hear it’s been worth it for your biz.

      Dave

  • Dave, you make some good points here and I would agree that AdWords is simply the shopfront to get people onto a website, which then has to do the selling to achieve a conversion at an acceptable cost. Very often AdWords can be seen to be ineffective when it may be the website that is not performing (and so Google Analytics and other tools have a role to play here).

    I know you’ve avoided some of the more techie elements of AdWords, but quality score is something that has to be considered as the cost per click creeps up. Getting a good QS compared to others in your market can give you an edge and this is often overlooked or seen to be too difficult, when things like adgroup structure and keyword match types could be used more effectively.

    AdWords is very much a data-driven marketing technique that needs to be used correctly. It’s also still one of the most effective online advertising methods and there’s not much that can beat it for a cost per lead / sale for many businesses, other than word of mouth!

    • I hear a social media companies citing the decline of Adwords, so it’s good to hear you still find it right up there for ROI. I think as long as Google is the first place we look online for services it will continue to be a (or the) primary customer source for businesses.

  • Adwords and subsequent word of mouth from happy customers have been the main driver of quote leads for our small business (tradie). The cost per click is a lot more cost effective than other quote lead services (ie Hipages).

    • Good to hear! You’re able to make that judgement because you know your profit margins and you know the cost to acquire customers from other channels – kudos to you 🙂

  • Hi Dave. Good article – again 🙂 I am a big believer in Adwords for the right business and have had some success and failures using the platform.

    For those new to Adwords, I recommend researching 2 concepts in order to save money before diving right in.

    The first is “Negative Keywords” – using them will prevent the wrong type of visitor ie, one you know will not buy. For example, a Plumber might use the word “Jobs” so that the plumbers site will not show up in search when someone types in Plumbing Jobs – you don’t want somebody looking for a plumbing job costing you $25 when you are trying to sell a plumbing service.

    The Second is Lifetime Customer Value ie, net value of the customer over the lifetime of an average customer. For example, if you know you make $500 lifetime and it takes 5 x $25 clicks to turn 5 visitors into 1 customer, then you know you are making $375 for every $125 spent. Within that context, $25 per click seems cheap. On the other hand, if you make $100 lifetime per customer but have to invest $125 for a new customer, then you are losing money and the same $25 click is way too expensive.

    • Brilliant advice from the trenches Paul. Your points are spot on. Search for any service and scan the ads and you’ll find a company paying to advertise for the wrong terms because they’ve failed to use negative kws. For example although I’m in Brisbane I was searching for “cleaners Sydney” the other day and was still seeing (wasted) ads from Brisbane companies.

  • Hi Dave, I have found that Google shopping works the best for me because I have products that come up well as an image. The adds cost only 40-50 cents per click and the CTR is between 2-3%.

    • Great that sounds pretty affordable, good to know it’s still working for product sellers 🙂

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