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Does Google Ads Work? 3 Things You Need to Know

Google Ads can be expensive, especially if your marketing spend isn’t bringing in new customers. However, running paid ads remains the quickest way to scale your business and maximize your ROI. If your PPC campaigns aren’t delivering, it’s time to ask why. Does Google Ads work … or is there a problem with the way you’re using it?

Google Ads are triggered by a search query, so the leads tend to be higher quality because they are only shown to people who are actively searching for the products or services that you offer. However, this can be expensive if your business offers products or services with high search volume. With PPC services as an extra expense, does Google Ads work and make sense for small businesses?

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Are Google Ads Cost Effective?

When considering running Google Ads, some people who are unfamiliar with the platform are taken aback, because they will be charged every single time someone clicks on their ad or takes a particular action. While this is an understandable concern, it is imperative to keep in mind when it comes to Google Ads, the cost per click (CPC) and cost per action (CPA) do not determine the effectiveness or profitability of a campaign.

It is also important to keep in mind that if your campaign is well optimized, you will be charged at a rate low enough to make whatever you paid for back, in addition to a relatively healthy profit. Effectively optimized PPC campaigns always create a healthy ROI. It’s been proven that PPC advertising is the quickest and most efficient way to generate new business.

Why is this? Your ads are only being shown to people who searched for something related to your business or industry, and in doing that, they have taken the first step in self identifying as a lead. This makes PPC the most effective form of online advertising for brands that want more customers now.

Related: Discover how to grow your business with paid ads.

How Much Do Google Ads Cost?

Does Google Ads work if you don’t spend a fortune on it? Actually, yes - provided you know what you're doing. The cost of Google Ads can vary dramatically based on your industry and location. Some e-commerce businesses have a CPC of about $0.60, while other industries, such as lawyers or other professional services, face CPCs of $100 or more.

For businesses on the higher end, it is important to know that the CPC doesn’t solely determine the effectiveness or profitability of a campaign.

Are PPC Services Worth It?

It’s important to remember that the purpose of Google Ads is to generate ROI — meaning that you have to invest in order to generate a return. If the cost of your keywords seem a bit steep, think about your customer value. How valuable is a customer that seeks your business? Depending on your business, your customer value can be a few thousand dollars or $300,000.

Using $300,000 for this example, does it really matter if you dish out $40, $150 or even $400 dollars for 300 clicks if the value of one customer is $300,000? Probably not.

Let’s say that the value of your customer isn’t six figures. If your average customer value is about $150 and you spend $15 on a few clicks to generate that customer, was the ad (and the PPC services that led to it) worth the price? Typically, your CPC will be priced fairly according to your industry, and with consistent campaign optimization, can reduce over time.

Your CPC is not the primary determinant on if your program is profitable or not. A good PPC strategy will make or break your ability to run a profitable campaign. Here are a few ways to maintain a relatively lower CPC:

  • Focus on bidding on long-tailed keywords: These tend to attract searchers that are further down the funnel and are more likely ready to convert. They also are cheaper than the shorter keywords. For example, think of more intent-based keywords like “Marketing Agency That Does SEO” opposed to just “SEO.”
  • Stay away from broad match keywords: These appear to be cheap, but the traffic they bring in is less likely to be relevant and those cheap clicks add up quickly! Modified broad match keywords perform well if monitored closely, but running a campaign with regular broad match keywords is opening up the gates to all traffic and is guaranteed to exhaust your budget while (at best) very minimal return on your investment.
  • Review your Search Terms report frequently: Make sure that your keywords are as close to the searcher's query as possible. This will help with your Quality Score and will result in a lower CPC. It will also allow you another opportunity to review your search traffic and block your ad from showing up in irrelevant keywords or search phrases, decreasing irrelevant clicks and wasted costs.
  • Put your keywords in your headline, ad copy, and on your landing page: This shows Google that your keywords and ads are relevant. This will also help increase your Quality Score, lower your CPC, and will also help improve your ad placement. Those are three pretty great benefits that do not require too much time or effort on your part.
  • Review your search keywords report frequently: Pause any keywords that are spending money but aren't generating conversions for you. If you have a $10 keyword that has gotten ten clicks but no conversions, and a $30 keyword that has gotten 4 clicks and 3 conversions, the $30 keyword is more expensive but also the most profitable. Pause any keywords (regardless of cost) that aren’t generating conversions for you and focus on the keywords that are generating leads.

Those are a few expert tips on how to maintain a lower CPC, but be mindful that the term “lower” is relative to your industry. Does Google Ads work if your CPC seems high? That ultimately depends on the sales your campaign brings in. The amount of your CPC should not be what determines if you pull the plug or not.

The last thing that we want you to consider is the lifetime value of your customer. The CPC that makes sense for your ad campaign will depend on the average value of the customers you are targeting.

For Example: Let’s look at a pool service company

Pool service in this market is between $80 - $90 a month which works out to an annual payment or an annual amount of about $1,000. If we're buying clicks for $8 - $12, we may spend $80 before we get a customer. Even if it takes two or three months to get that first customer, it still would be worth it, because we have a cost of acquisition to get that new customer. In this example, if you spent $200 or $300 to acquire that customer and they stay for two years, their lifetime value could still be anywhere from $1,300 to $1,600.

It simply takes some time to see a full return on your PPC advertising investment, but if you understand your customer lifetime value, the ROI is easy to see while you’re running your PPC campaigns.

Too Much of a Good Thing? How Our PPC Campaign is Working for a Local B2C Client

In August 2015, a Las Vegas divorce attorney wanted to bring in more clients online. After speaking with the client, we offered them our PPC services to bring them new business from online ads. We selected a number of ad groups that target keywords the lawyer’s clients are most likely to search for. We also used radius targeting within the Las Vegas metro to only go after those who are most likely to use the client’s services.

Six years later, we’re still working with this client and continue to deliver them a large number of high quality leads. Recently, this client received an average of 66 “Contact Us'' submissions and 40 CTM calls per month through our PPC campaign. They are now requesting changes to their campaign so their business isn’t overwhelmed. It’s a good problem for any business to have, and it could be yours when you start working with us.

Does Google Ads Work? Our PPC Services Will Prove That It Does

PPC ads are a fast and effective way to reach your customers online … if your campaign is set up right. It’s easy to be skeptical of PPC ads if you haven’t gotten good results from a PPC campaign yet, but as customers increasingly move online, it’s vital that your business learns how to take advantage of this potential revenue stream.

If Google Ads campaigns aren’t working for you or if you don’t have the time or skills needed to manage PPC campaigns, contact us today to speak with us about our PPC services! You can also schedule a free strategy session with us, where we can examine your current marketing strategy and identify areas of improvement that can bring you the greatest results in the shortest time. We’re here to help you make Google Ads work for your business, no matter your industry!

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