I’m often asked this question: Is Adwords Worth It?
Adwords now called Google Ads can be a solid way to get your business in front of qualified customers who are ready to buy.
For some businesses, Google Ads are driving over 90% of their sales. But for a lot of people, Adwords is a money pit. They run ads, they fail to generate a profit and usually stop ads because it didn’t work. They would say that Adwords are not worth it.
Watch the video version of this article below:
Is Adwords Worth It? The GOOD the BAD and the UGLY
In most cases, those who struggle with Google Ads are simply making some simple, but not always obvious, mistakes.
Before anything else, let’s talk about what’s good about Google Ads, and let’s dig into the common mistakes to avoid so you’ll have a better understanding of Google Ads are worth it or not.
The 3-pack advantage
Google has changed its platform. Local search used to be called the 7-pack. This means 7 local businesses were listed in the maps section at the top of the page. These were organic results, 100% free listing, $0 cost per click.
Google changed this to 3 pack listing. They’ve dedicated a much greater portion to the section above the maps. They allow 4 paid listings plus Google shopping to go above the free maps and free organic sections.
If you run Google ads you can have the #1 spot in Google maps. 90% of Google’s revenue comes from advertising so that’s why you see a shift away from organic results, giving more real estate to paid ads.
When someone asks: Is Adwords worth it? Based on this major shift, you can take full advantage of the Google Ads platform. But can you make it profitable for you? That is the key.
So let us discuss some of the factors you need to know to be successful at running your Google Ads campaign.
CPC vs CPA
I see so many people get hung up on cost per clicks (CPCs), trying to manage the campaign based on getting the best CPCs. CPC is only a vanity number. It’s not the way to navigate a campaign.
The more important number to measure and guide your campaign is based on your cost per acquisition (CPA) or how much it costs you to get a lead.
Your goals and analytics must be spot on so that you have good data and can attribute every conversion or lead. You must understand the lifetime value of a customer and how much you can afford to pay to acquire a customer.
When you know that then you shape your campaign to generate consistent CPAs. And once you have a profitable CPA, then you can scale your business as far as you want to.
Google Adwords is an auction
Before deciding if Adwords is worth it for you or not, you need to understand one very important factor and that is Adwords is an auction. You and all your competitors get the same bid. Don’t just rely on Google setting it up for you.
You have no bidding control. Imagine all your competitors have paddled in the auction. How do you beat everyone? You do it in an expert mode where you can take control of the auction. All you need to do is win by a nose, which I will explain below.
Win by a nose in Google Ads
In the Pegasus World Cup, the #1 horse got $4 Million in prize money and second place only received 1 million. Was the #1 horse 4 times faster? Was he 4 times better? No. He only won by a nose, but a mere hundredth of a second.
In the Google Ads auction, you only need to win in the auction by a nose. If all your competitors are all using smart mode and you are just a little bit better, you can win in the auction more often.
You’ll have better setup tools, better targeting, better control. It’s that simple, get control and win by a nose.
You must be on top of your keywords. Measure and understand how they are performing and know the intent well. For example, you run ads for a plastic surgeon who offers tummy tucks. You run ads for the terms ‘tummy tuck’ and ‘tummy tuck surgeon near me’.
The second term shows a much greater intent and probably looking to see a doctor soon. We measure the costs and conversions and find the winners and eliminate the budget wasters.
Use negative keywords and block terms that waste money like ‘cheap tummy tuck’, terms like this is a fast budget waster.
This is probably the best-kept secret that makes Google Ads work extremely profitable. With goals, you develop a process that generates more profit, identifying who’s seriously interested and who is not.
Having said this, in every campaign we create a scorecard. The average landing page has a 3-8% conversion rate which means that 93% or more will bounce.
We build a virtual scorecard on the landing page based on micro-goals and macro goals. Micro goals are actions like time on site, the longer they are on the site, the higher score they get. Some other actions you can add to points include the number of pages they browse, how far down they scroll on the page, and how much video they watch on the landing page.
If anyone leaves your site without hitting a macro goal or converting, then the micro goal scorecard instantly identifies who is seriously interested and who is not.
With this data, you can go after the customers with the highest intent and you hit them heavily through a remarketing campaign like display ads, Gmail banner ads, and video remarketing.
So back to our question: Is Adwords worth it? My answer: yes. Absolutely without a double IF you understand the common pitfalls to avoid, If there are customers in your marketing looking for your product or service and if you run tightly managed campaigns. You can have an incredible chance of being successful. But this also requires testing different strategies and finding the one that works best for you.