Confused About Pay Per Click

Turn Prospects Into Customers and Opportunities Into Sales.

I am, and have been for years now.

Last year we ran a pilot campaign with the help of agency. It cost a lot of money, and achieved precisely nothing. This was exactly as I expected, and we did it against my better judgement. Luckily we pulled the plug before all the money was gone.

It’s obvious PPC must be more cost effective than other forms of outbound marketing – TV, radio, print, tele sales etc. After all we only pay for it when the target clicks on our ad. The sale is half made at that point. And for some businesses it obviously can work well. We know somebody who does all his business thru Google Ads. But he sells cast iron stoves at $750, has the cheapest prices and widest range.

We’re in the small business software market of course, and that’s a totally different matter.

The market amongst small businesses for almost anything is enormous, with 35 + million in the English speaking world, and 500,000 new ones starting every month, in the USA alone. Almost everybody wants to get in front of these people, and Google Ads is the most effective and cost effective way of doing it.

Therein lies our problem – everybody is competing for placing ads related to the keywords associated with small businesses.

Banks, insurance companies, travel businesses, and endless government departments have huge amounts of money for brand building. They don’t need an ROI, and PPC costs a fraction of the alternatives.

The larger software businesses throw money at it, for brand building, and in some cases to protect the lower end of their market share. They don’t need ROI either.

The smaller, but established software businesses also compete for the same ad space. Their prices are pretty high and the $300 – $400 it might cost to win a new customer is quite affordable.

Last on the list comes the new software companies, with innovative products and low prices, down to Free. They’re forced to compete with everybody else for the clicks, because the “auction” is already dominated by the bigger guys. At some point they’ll need ROI, but I’m prepared to bet they won’t get it. They’ll be put out of business – not by competing products but by competing advertising budgets.

Running out of cash is awfully easy, especially in the current economic climate.

The experts talk about “going after the long tail keywords” (see our post Confused About Keywords). Sounds great, but we don’t have to try this for long before finding the guys who dominate the more obvious keywords have found their way deep into the long tail. Even there we have to compete.

Adwords has just informed me we need to pay nearly $10 per click for “consultant sales” in the UK. If this was $0.10 we might be able to justify some spend

Finally we come across Google’s own strategy. Straight auctions for keywords was never going to stand up. The big spenders were always going to want some preference based on their total spend, and now they’re getting it. Small newbies have to spend more per click than the established advertisers to get air time.

Personally I understand this makes sense for Google, but we won’t sit in on a game where the deck is stacked against us.

It seems our only option is feeding Google’s need for content. That way we get close to the top of page one.

To the people who really understand Adwords – please tell me where I’m wrong and what to do about it. We keep asking that question, but never get answers.