A question I’m often asked is, “Do Google Ads work?” The answer is yes and no. Google ads can be a major revenue generator for a small business or it can quickly become a money pit if you aren’t aware of the pitfalls.
In this article, Do Google Ads Work For Small Business?, I’ll show you how to increase your odds at having greater results from your Google Ads. I will also discuss the common mistakes that you need be aware of.
Watch the video version of this article below:
Do Google Ads Work For Small Business
One thing to remember for your Google Ads to work is strategy. There is nothing that will drive leads like Google Ads for business, but it will require some strategy.
This is straightforward if you follow these 4 important steps. Your chances of generating a positive cash flow from Google will be greater.
Google Ads success for businesses
First, let’s look at what successful business is doing on Google:
- Amazon has grown into the largest company on earth in market value. Look at how they drive leads, through Google. Their Google ads budget is $157 Million.
- Lowes and Home Depot both spend of $50 Million per year on Google ads.
- Yelp spends millions and resells the leads to small businesses.
- Home advisor does the same thing as Yelp.
Those who know how to extract leads at an affordable price consistently not only can generate profitable income but also sell it to you and create a billion-dollar company from it.
So it’s important to understand that the consumer’s buying journey is often started through Google. That’s where a cornerstone of your marketing effort should be.
But the problem is that everyone in your industry wants those precious leads but the ones who are successful are the ones with good strategy.
Here are 4 things you MUST be doing when running Google ads to ensure success.
Tips to succeed in Google Ads
#1 Create an ROI Budget
Do not focus on your cost per click, but I want you to focus on your CPA or the cost of acquiring a new lead and subsequently the cost of acquiring a new customer.
A mistake I often see is small businesses will run ads based on the one-time value of the customer without focusing on how much revenue the customer will generate over the first year based on referrals, upsells, cross-sells, or repeat sales.
I’ll assure you that your competition is bidding based on lifetime value. They understand the long-term revenue value and this is the #1 place where businesses will lose out with Google ads because it seems too expensive.
So ask yourself, what is my lifetime value, and then how much can I afford to pay to acquire a new customer? Then start optimizing your campaign and bids to get customers inside your budget. A quick search in the Google keywords research tool will show you the average cost per click. He who can afford to acquire a customer at the highest cost will win.
#2 Measure everything
Test each campaign, ad group, and keyword and find the winners for you. Turn off all the expensive keywords that don’t convert into customers. Watch your numbers very closely. In the dashboard, you can see the Cost, CTR, CPC. Don’t try to go after everything. Find the keywords that are performing best for you.
Use Match Types
The four types of keywords modifiers you should be using are:
- Broad Modified Negative
This is one of the fastest ways to see your campaigns spend way too much on unqualified leads. Strategy and planning are important. Think about your customer and how they are searching and how surrounding keywords affect the search results and modify them.
In this chart you can see examples of types of keywords that should be modified in every campaign, this is a must
Use Negative Keywords
Remember to use your money wisely and beware of keywords that will destroy your campaign. So you want to be running a keyword report regularly and watching for search terms that are generating poor quality leads. This is one of the biggest budget wastes I see is when someone isn’t carefully watching this list.
Scan your keywords list and sort by spend to see where most of your budget is going. Identify the bad keywords and go to the tool wrench and add them to your list. Don’t ever stop watching this list, you’ll see new terms pop up often that need suppressing.
In short, Google Ads do work for small businesses that take the time to do research and plan for a successful campaign.