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Google Ads is no longer for small businesses. Here’s why.

Google Ads is no longer for small businesses.  Here's why.

Google Ads is no longer for small businesses.

Increasingly, my agency and many others are seeing the effectiveness of Google Ads decline for new customers spending less than $ 3,000 per month. Month in the media.

Just a year ago, we companies with new small accounts (under $ 3,000 / month) saw an average return on advertising spend (ROAS) of 3: 1 after the first month of advertising across all verticals.

The average ROAS for small accounts is 1.5 to 1 – or barely equal breaks in the last six months.

Of course, this is only one agency’s experience.

So I contacted other agency owners I know and asked some queries on Facebook and Twitter that asked what others see.

It seems that while some are still claiming sufficient returns, many others see the same thing that I see.

Google Ads does not seem to work for businesses that spend less than $ 3,000 per click. Month.

Why is Google Ads not working for small businesses?

Over the last few years, Google has slowly but surely changed the game.

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Some of these changes have come in the name of confidentiality.

Some have come in the form of making the platform easier to manage for less sophisticated marketers.

But rest assured that Google made the changes to make more money.

It would be nice to think I’m just cynical, but it’s hard to argue with my assumptions based on the company’s earnings.

We no longer live in a world of equal auctions.

It’s challenging to determine what the actual price of a click is – or even the true factors that resulted in the pricing of the click.

Google’s strong efforts to move its customers to automatic bidding structures have removed the advertiser’s control.

When the advertiser is not in control, the algorithm dictates the price per. Click.

This forces local advertisers to compete with large-budget national brands that are automatically inserted into results where they may not even be relevant — just because Google’s advertising algorithm thinks a click may be due to placement.

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Does Google think it’s smarter than humans?

For those who are not involved in the daily paid search- the simple fact is that Google has made it harder to optimize your paid search spend.

Google is increasingly demanding that advertisers trust Google to optimize their accounts.

Gone are the days when advertisers were presented with the data and given the opportunity to make their own decisions.

In typical Google fashion, Ads has become a robot marketing to consumers looking for patterns among many data points they believe make up an audience’s psyche.

It is ironic that Google encourages marketers to appeal to humans instead of robots when it comes to SEO.

In paid search, Google believes that its robots are better at appealing to humans than actual humans.

Google says “Feed Me”

To make decisions, Google’s robot requires food.

In other words, the Google Ads algorithm cannot make decisions unless it gurgles on data.

So in order for Google to show ads to the right people at the right time, the lazy robot needs to see data about where the right people are at the right time.

Once Google understands this, the results can be spectacular.

But unfortunately, in the end, that point happens sometime after an advertiser spends north of $ 3,000 a month.

Over time, a small advertiser should see the theory behind the benefits of the Google Ads learning algorithm.

But reality is changing user behavior, changing budgets, and changes in Google itself are making it so that the small advertisers who spend less are more likely to give up before they see the types of results the big boys experience each month.

Most small businesses do not have six months to a year to spend $ 3,000 / month to see results.

Small accounts that “take a break” also seem to have to start this process all over again.

It’s almost as if when an advertiser stops feeding Google, the advertising algorithm suddenly and totally loses memory.

Am I using enough to be effective?

It’s always hard to understand how much to spend on Google Ads.

It’s harder to know if you can afford to pay enough to get results.

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I asked my friend Navah Hopkins, VP of Strategic Marketing at AdZooma and one of the world’s most recognized and decorated paid search experts, for her advice on the matter.

Here’s what she had to say:

“Google Ads can be a powerful tool or a frustrating waste of money. It all comes down to how much you can invest in acquiring leads and understanding what goal you are giving your campaign.

As a general rule, you want to make sure that your budget has enough numbers to fit enough clicks on the day to get at least one lead / customer. Depending on your industry / market it can mean 10 or 100.

While the average CPC is around $ 3 per Click, many industries have clicks upwards of $ 25.

If you have a conversion rate of 10%:

Average CPC in the US: $ 30 per Day or $ 912 per. Month. $ 25 Average CPC: $ 250 per. Day or $ 7,600 per. Month. $ 150 Average CPC (low for legal): $ 1,500 per Day or $ 45,600.

If you have a 1% conversion rate:

Average U.S. CPC: $ 300 per Day or $ 912 per. Month. $ 25 Average CPC: $ 250 per. Day or $ 7,600 per. Month. $ 150 Average CPC (low for legal): $ 1,500 per Day or $ 45,600.

When setting a budget, it is crucial to include the customer’s value, location and vertical in the discussion. While it is not impossible to achieve value with a smaller budget, any budget lower than $ 5000 will struggle to burn the algorithm (ultimately costing you more because you are in the learning period longer), as well as not being able to support the objectives for which it is responsible. “

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Navah is nicer than I am.

We all know that it takes money to make money.

However, most small businesses cannot afford to lose $ 3,000- $ 5,000 a month just to see if a marketing channel will work for them.

And that’s what Google is asking small businesses to do.

This is despite the fact that in the last few years, the search engine has spent millions of dollars on encouraging small businesses to use their platform.

Many small businesses come to me with their free $ 100 Google Ads vouchers they have received from some marketing campaign and ask what kind of results they get from their newfound wind.

The answer is virtually nothing.

Now it seems that these ad coupons may be worth even less.

Google created the idea that small businesses will succeed if they just use the Google Ads platform.

Millions of small businesses hear the message and run to Google to get rid of their hard-earned money with the zeal of a prospector on his way to San Francisco in 1849 — Google sells the shovels.

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But as soon as the pay-per-click drug has these small businesses hooked on results, they raise the stakes, remove the controls and say pay up or stand by the trip.

But enough preaching.

If you can afford to spend the money, Google Ads is great.

If you can not spend the money, it is better to go on another trip.

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