Gino Lancaster
Gino Lancaster, Business Partner at Red Planet Design ~ Digital Marketing Company

Advertising

Is Google AdWords giving you a good return on investment?

Hi Everybody, I have a number of clients who are using Google AdWords, so I wanted to get an understanding of people's experience. The feedback from my clients is that some business sectors it works very well but in others it performs quite badly, to the extent that clients have had little or no return on their investment. So I'm keen on getting an understanding of which business sectors it works for or which it does not.

I do have a follow up question which asks.. Do prospective clients go for the AdWords listing first or do they click the Organic listing first? Looking forward to your answers.

 

 

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6 Answers

Graham Vale

Graham Vale , Founder at grahamvale.com

Hi Gino,

that's a question that I have a fair amount of data on from across several sectors over the last five years. And the short answer is yes.

The long answer is that some sectors are tougher than others. But true ROI happens after Adwords have done their job. If you are getting clicks then Adwords has done its job. To convert that to revenue means the landing page and sales process must do its job. That's where my clients and I spend most of our time before we even look at Adwords.

Your follow up question is also relevant. I have always been amazed at how many more people click the ads before the organic. Maybe because I don't tend to.

But the difference with the ad and the organic is that the ads are far more agile when testing. You can test any number of ads simultaneously and discard poor performers quickly.

In short, make sure your landing pages convert prospects to clients before using Adwords. Otherwise you'll burn through a lot of money figuring it out.

Hop this helps.

Graham

 

Gino Lancaster

Gino Lancaster , Business Partner at Red Planet Design ~ Digital Marketing Company

Thanks for your response..I definalty agree that you have to have a great message and an incentive to buy once the prospective clicks through...and there are a ... read more
Thanks for your response..I definalty agree that you have to have a great message and an incentive to buy once the prospective clicks through...and there are a lot of definations of how that is done. Re Organic and Ads I have to say the jury out this side..I am just not sure if the crediblity is there for the adwords as it is for the organic..again a lot of definations here..I suppose may intial view is that the organic businesses have (most of the time) earnt thier position by great content and credibilty as for the adwords is just about who is bidding up the dollars, you could be landing anywhere...There is lot of debating here!..But thanks for your input..
Joshua Uebergang

Joshua Uebergang , Head of Strategy at Digital Darts

Graham, I respectfully disagree with your comment about "If Adwords gets the click, it's done its job." Click, view, impression, lead... whatever pre-sale metri... read more
Graham, I respectfully disagree with your comment about "If Adwords gets the click, it's done its job." Click, view, impression, lead... whatever pre-sale metric... if it's not the right, hot market, you've screwed up at the Adwords level. No brilliantly written letter for a plumber will get a quote from someone wanting to learn about pipes.
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Bridget Holland

My experience is not as wide as Jayson's, but I would agree with his basic point as I understand it - most Adwords accounts do not deliver ROI because they are not set up and managed properly.

One of my clients had Adwords set up by another agency.  The goal of their site is to generate leads.  There are 4 lead generation mechanisms on the site - only one of these had a goal set up, and it was incorrectly configured.  There was an Adwords campaign targeted specifically at mobile devices, yet the site was not optimised for mobile, and 80% plus of mobile visitors bounced right off again without clicking on anything.  I could go on but I won't...

I do not claim to be an Adwords expert but these are my 'from experience' pointers:

1. Are you offering something people would search for?  Can you make a good guess what they might enter in the search engine?  If yes, give it a go - on a small budget so you don't blow a fortune.

2. Do you have a decent page for when people click through?  Include a 'half-way house' option like a newsletter or download to get contact details if they’re not ready to jump right in.

3. Make sure you have goals set up which you can track.  Install Google Analytics.  Have a 'thank you' page when people submit a form and track the number of times that page is viewed.

4. Make sure you understand match types.  (https://support.google.com/adwords/answer/2497836?hl=en-AU).  Try 2-3 word keywords on phrase match as a good starting point.  Alternatively, if the order of words might switch around ('candle making' vs 'making candles') try broad modified match.

5. Make sure you consider some basic negative match keywords - ie you don't want your ad to show when someone's search includes this term.  Common examples are here http://www.whitespark.ca/blog/post/5-must-have-negative-keywords-for-small-business-local-adwords-campaigns

6. Track your bounce rates – ie when someone clicks on your ad, looks at your site and leaves.  If it’s high, then you need to fix a) the keyword or b) the ad or c) the page people land on.

7. Take any info and advice from Google with a pinch of salt.  They make money every time someone clicks, not every time you get a lead / sale.  (Why do you think they suggest you start off with 'broad match' keywords???)

8. In Google Analytics, you get reports on what people actually typed in when they were searching, both paid and organic search.  Use these.  Look for high bounce rates – what can you add as a negative keyword?  Look for high conversion rates - is there a new keyword you should add?  Or a keyword you should give extra budget to?

Jayson Rodda

Jayson Rodda , Head of Digital Marketing at Find Your Ideal Customers

Very comprehensive list Bridget, well done. Only thing I would add is, make sure that the numbers add up for your business. The 2 most important numbers are: ... read more
Very comprehensive list Bridget, well done. Only thing I would add is, make sure that the numbers add up for your business. The 2 most important numbers are: 1. Conversion rate from visitor into lead is = cost per lead 2. Conversion rate from lead into sale = cost per sale The businesses that have a proper handle on these numbers excel in online marketing, the rest flounder and say it just doen't work.
Bridget Holland

Bridget Holland , Director at Learnings for Success

Jayson you and I are on the same wavelength! Cost of acquisition and lifetime value are the two essential measures in marketing. If COA is more than LTV, ever... read more
Jayson you and I are on the same wavelength! Cost of acquisition and lifetime value are the two essential measures in marketing. If COA is more than LTV, every new customer just sends you broke quicker - but so many businesses have no handle on either...
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Ewan watt

Ewan watt , Director at roi.com.au

Hi Gino,

If Adwords is well segmented, integrated with website conversion etc.. the success rate and ROI is very high.. only exceptions is industries where cost per click is too high compared to the net margin a client is making from sales

The popular thinking 5 years ago, was that 80% of people clicked on organic listings.. however, with the growth of mobile, site links, product listing ads means  the % of google paid traffic has grown exponentially the past 2-3 years...

Every website trying to grow sales should be investing on both SEO and Adwords... the % and $ allocation varies from business to business.  My 2 cents

 

 

 

 

Steve Gray

Steve Gray , Director at Gray Capital Investments

I find it hard when the person making a response is directly part of a business that says they do ROI stuff... No disrespect but of course you will say it works... read more
I find it hard when the person making a response is directly part of a business that says they do ROI stuff... No disrespect but of course you will say it works. I want to hear from Joe Average business people running a business using adwords. E.g. I have heard you need to have results greater than 100 visits per day to your site for google adverts to make any impact on your income. I also know clients that have 1300+ impressions of the advert who then get 3 actual click throughs (consistent over a 12 month period).
Ewan watt

Ewan watt , Director at roi.com.au

Hi Steve.. thanks for your feedback.. some further info for you go to "adwords keyword tool" for transparent monthly search volume from Google Average website... read more
Hi Steve.. thanks for your feedback.. some further info for you go to "adwords keyword tool" for transparent monthly search volume from Google Average website converts at 2%, some of our clients 15%+ - so that's 2-15 leads on 100 clicks - how much you make depends on what you sell your product for, and what % of leads you convert into sales. 3 clicks from 1300 impressions - sounds like a campaign set up on display network or too general - a common error in Adwords campaign is targeting category keywords like "bikes" which can burn cash quickly. The one area I feel Adwords is limited in value ... is growing a new market category where there is limited search.
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Jon Manning

Jon Manning , Managing Director at PricingProphets.com

Gino,

Hasn't worked for me, zero ROI, for a variety of reasons (eg, Google struggles with the difference between a noun and a verb, not good for revolutionary products or services, so-called "online marketing guru's/charlatans" think a lower cost-per-click rate is better ROI than making a sale).

Jon

Gino Lancaster

Gino Lancaster , Business Partner at Red Planet Design ~ Digital Marketing Company

Thanks for your reponse...I had a look at your site..I suppose its hard to sum up within google adwords (space) your services..Your service looks quite unique ... read more
Thanks for your reponse...I had a look at your site..I suppose its hard to sum up within google adwords (space) your services..Your service looks quite unique is that the case ?
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Stephen Pearson

Hi,

Didn't work for me. What happened was:

Job requests

'Column fodder' - Companies wanting quotes but already decided on their chosen supplier and often quite unethical

Cost driven - never a happy place to play in

No issue with the service provider - worked hard and professional but they all confuse ranking in Google with sales. For some businesses this is the case but not for mine - corporate video production.

A business needs to assess its fundamentals. I always have a personal relationship with my buyers and this means impersonal IT searches are not the best way to start that relationship. For other businesses eg Winnings with white goods the Google ranking is critical to their competitive position.

The internet is not the answer to all questions.

Cheers,

 

Stephen

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Jayson Rodda

Jayson Rodda , Head of Digital Marketing at Find Your Ideal Customers

Based on my experience across some 500-1000 adwords accounts in many industries, I would suggest that at least 75% of the adwords accounts I've seen (either self managed or with other adwords agencies) don't make money.  Most common reasons would include: Not having basic tracking in place,    Business owners that say - I just need to be in the top of Google,    Delegating the task to the office junior to look after the adwords account   Poor quality online marketing companies - that lack expertise to fully understand & service your business      What sort of returns would an advertiser expect to get if they recorded video via an iphone and put together a TV commercial in their spare time, then posted it in prime time TV advertising slots.  They would be disappointed no doubt, as well.  Google adwords is the only method on Google, that provides advertisers the ability to target exact search terms, with specific ad copy and direct users to nominated pages. Even better, you decide what you are willing to pay to be on the front page of google in 1 minute.  Those that understand it should make money in majority of industries.  Particularly if you are not paying a management fee, that does change the landscape sometimes with smaller advertisers & in some niche markets.   Areas to avoid for Google adwords: ecommerce - low margin products, poor quality adwords management companies & high CPC markets with low margins.   To answer your second question:   It does not matter if buyers click on adwords or organic.  It matters that you can effectively measure that all of your marketing activities are delivering positive ROI. Whilst I've seen instances when ranking #1 in organic and #1 in adwords you can gain as much as 60% of the market.  This would (for sure) attract most buyers.   CTR's would suggest that top organic rankings still outperform top adwords rankings.  But given all the panda & penguin updates, businesses have lack of certainty have with shrinking organic rankings (above the fold).  This will continue as the days that SEO dominated google search volume will become a distant memory.  Google will continues to push towards a paid model, to keep their share holders happy. If an adwords account is complimented with web experience designed to maximise prospect engagement you should be attracting potential buyers profitably.  This ideally should be well above organic traffic conversion rates.

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