Now that we have five reasons to reconsider that investment into Google Adwords, what else should we know about paid search before making a decision?
6. Three quarters of all search leads are organic, not paid: Okay, we know this one already. Do you really want to pay for your customers leads? Do you want to pay for three of them for every one you get? I didn’t think so. (If you do the math, you’re actually paying for 10-12 of your competitors’ organic clicks for every single click your Adwords listing gets. What a deal … NOT!) Keep in mind too that the overall quality of paid search links hasn’t exactly gotten better over time. People are a little wary to click over there on the right side. Most of them aren’t even looking in that direction anyway! (Source: Compete/TNS Media, Advertising Age)
7. I can’t time my advertising with Paid Search: Paid-search programs don’t take into account the fact that specific retail and service categories have extraordinarily higher advertising effectiveness when timed properly … i.e. closer to the weekend, near holidays, around paycheck periods, etc. This is evidenced-based fact, backed up by at least three decades of real-world advertising experience, not “research” or “survey results”.
8. Specific search volume is small: Be sure to check just how many inquiries per month you can expect before you buy those keywords. If you’re okay with talking to dozens – as opposed to hundreds or thousands – of your potential customers, more power to you. Usually, search volume on your chosen keywords will be much smaller than you would’ve guessed (or hoped), and that’s not a good thing. Unless you’re planning on buying a lot of keyword combinations. Wait, that isn’t a good thing either, is it? (Source: Go to Adwords and check for yourself!)
9. Current Paid-Search Users Aren’t Impressed: As noted by SEMPO and reported in Ad Age (SEMPO is a well-respected search marketing group), 13% of advertisers think local paid search “works great”. As for the other 87%? Their opinions range from “okay” to “unimpressed” to “not using it”. Funny how a full 36% of agencies think paid search “works great” (nearly three times the rate of advertisers), but when you ask their clients — the advertisers footing the bill — their response to this same question can’t even be described as “lukewarm”.
10. Help? If, after reading the first nine bullets you still think paid search is a good avenue to find your next customer or grow your business, we wish you the best of luck — and our clients thank you for underwriting their free organic leads. If you should need some help or run into issues, don’t call Google. Don’t email them either. Their customer support for businesses like yours is “over-stressed” at best. Don’t believe me? Why don’t you check for yourself, on a forum hosted by Google. That may explain the general feeling toward paid search mentioned in #9 above.
Okay, so this supposed “cheap and easy” medium doesn’t really convert leads for the local advertiser, has lower than expected volume (audience), bad timing relative to the retail category, an unimpressed client base, and an “understaffed” help desk. Local advertisers would be much better served working on their organic search listing, and using an ad medium that can answer the bell — better yet, a medium that makes the bell ring. Paid search doesn’t sound cheap, or easy, to me.
No more secrets, just smarter decisions ahead.
Dave Eckstein is a partner in the firm ESA & Company, based in Red Bank, New Jersey. Dave specializes in highly profitable market share growth for local business and gets a kick out of demonstrating a declining cost of customer acquisition for his clients.
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I strongly disagree. PPC is extremely effective if managed properly. Many local business owners have tried to do it themselves, hence the “okay” and “unimpressed” responses. As well, having great organic, plus sponsored ad placement can increase click through rates up to 90%. If PPC is suggested as irrelevant within a local business’ media mix, there’s huge opportunities being missed to grow revenues. Google’s Adword business model would be non existent and advertisers would not be staying on board with strong retention rates if this article was true. There are companies out there that provide “conversion-based optimization” management that only focuses on “productive” keywords, more than just clicks.
Thanks for your thoughtful comment, David. You make good points, especially where you say “if managed properly.” I believe our goals to be similar — delivering customers and leads at an efficient rate of acquisition. In working with roughly 5,000 local businesses each year, we encounter the good and bad of media and marketing plans. Unfortunately, many out there are pumping excess funds into paid search without equating acquisition costs on an apples-to-apples basis with other media options. This article helps our clients view this medium with a discerning eye, as they should any medium. Improving click-through rates is good news, but our penultimate metric is the ASR, PVR, or other measurement of retail / business advertising efficiency. Trust me, I definitely appreciate the Adwords business model. In fact, it helps more than a few of our clients to fetch highly efficient leads — leads that are underwritten by their competition. We appreciate your post and hope you visit The Catalyst again soon.