Are Google Ads worth it?

Are Google Ads worth it?

June 21, 2021
(Reading time: 9 - 18 minutes)

As someone who makes their living helping small businesses grow, I am often asked about advertising on the internet. An acquaintance, friend, prospect, or client will ask what do you think about Facebook ads, Google Ads, or Pay-per-click (PPC). My reply is usually it depends. Not to be vague, but it is an impossible answer without more context. With that being said, I see many pros and cons of them. In this post, I will attempt to educate you on how we got here, the pros and cons of using Google Search Ads so you can make an informed decision as to what is best for you and your business. I will also give you a few tips if you choose to go at it alone.

A brief history of advertising

We can trace the history of advertising back to ancient civilizations. By the mid-1800’s it became a significant force in industrialized and capitalist economies. These early ads were found primarily in newspapers.

Over the next hundred years, advertising would evolve and change. It would adapt to the new mediums such as radio and TV. By the 1960s up through the 1980s is the era that many historians will say is the “Golden Age of Advertising.” This was a time of big ideas, larger-than-life personalities, and three-martini lunches.

By the mid-90’s the internet was in its infancy, and we were introduced to the first banner ads. Banner ads were a novelty and something new and exciting. The first banner ad (seen below) is credited to AT&T and was first seen on HotWired.com in 1994. At the time, approximately 44 percent of users who saw it, actually clicked on it.

According to Jay Walker-Smith in an article that appeared on CBS Sunday Morning in the 1970s, the average consumer in the U.S. saw around 500 ads per day; by 2006, when the article was published, it had increased by a factor of 10 or upwards of 5,000 ads per day. Well, what about today? Sam Carr, with PPC Protect, in his article “How Many Ads Do We See A Day In 2021,” said, “although there are no official figures, the average person is now estimated to encounter between 6,000 to 10,000 ads every single day.”

What is Pay Per Click Advertising (PPC)?

HubSpot defines Pay-per-click or PPC as “a paid advertising model that falls under search engine marketing (SEM). With PPC, the advertiser only pays when people interact with their ad through impressions or clicks.”

It goes without saying that Google Ads is by far the largest PPC network available, and according to Small Business Trends, at least 45% of small businesses utilize PPC ads.

At least 45% of small businesses utilize PPC ads.

Google Ads: Search and Display

Google Ads are split into two enormous networks, Search and Display.

Google Search Network Example

Google Search Network

If you're a service area business and your prospects are using Google, they will most likely see a search ad from the Google Search Network (GSN). Search ads are the text ads usually seen at the top, bottom, or both of the search results page (SERPs) above the organic listings. These ads look similar to organic search listings except for the tag “AD,” which is to help differentiate them from organic listings. Fortunately or unfortunately, WebFX says that “50% of users can’t tell the difference between a paid ad and an organic listing.”

Google Display Network

To understand what the Google Display Network (GDN) is, indulge me with a brief history of how we got here. In 2007-2008 Google bought DoubleClick, which at the time the largest display ad network in the world. They paid $3.1 billion for it. In Q1 of 2021, their total revenue from Google Ads (formerly Google Adwords) was $44.7 billion! I care to bet that a small fraction of that is contributed to the GDN.

Now the with the GDN, your small business can advertise on more than two million websites. Including sites such as Oprah.com and ESPN.com. You can even advertise down to niche websites, forums, and the smallest blogs.

For the purpose of this post, I will be focusing on the Google Search Network as it is what most small businesses think about when it comes to PPC and Google Ads. 

Pros to Google Ads and the Google Search Network

Here are twelve pros in no particular order to using Google Ads to help get the word out about your small business or service area business.

1. When it comes to internet searches, keywords have become increasingly competitive with PPC you can cut through some of the competition.

Keywords have become increasingly harder and harder to rank for. Depending on your industry and the keywords, it can be extremely difficult for a small business that doesn’t have a high domain authority to get on the first page of Google. On average, Google will show up to four ads on the top and three or more on the bottom of the SERPs.

2. Your return on investment is nearly double what you spend

When it comes to PPC investment, businesses can usually make what they spend on GSN. In a report from PowerTraffick, “Small businesses earn an average of $3 in revenue for every $1.60 they spend on Google Ads.” 

Small businesses earn an average of $3 in revenue for every $1.60 they spend on Google Ads.

3. Google Search Network Ads gives you quick results

One of the best aspects of Google Ads, especially search ads, is that the results are pretty much instant. Once your campaign has been approved, you may start receiving traffic in a matter of minutes. 

Unlike SEO, there will is no waiting months for it to work. Content marketing will often take months to yield results, while Google Ads does not. Google Ads may be cheaper in the short run as you can increase or decrease your marketing expenditures at any moment.

4. Google Ads Has Impressive Analytics

Google Ads offers a fantastic collection of analytics and charts built into its software. These statistics enable you to understand how well your campaigns are doing and whether you should make any modifications. 

5. Google Search Network Ads can be good for the searcher

At the end of 2018, Clutch.io surveyed 506 people who had clicked on a paid search ad in the previous month. They found that people click on paid search ads that provide the most relevant information to their online search. Here are three of the key findings:

  • Three-fourths of people (75%) say paid search ads make it easier to find the information they are searching for on a website or search engine.
  • One-third of people (33%) click on a paid search ad because it directly answers their search query.
  • About four times as many people are more likely to click on a paid search ad on Google (63%) than on any other search engine – Amazon (15%), YouTube (9%), and Bing (6%).

6. You can target potential clients when they are engaged

No matter what you search for, Google has always and will always want to try and show you the most relevant results for that topic. This may or may not include ads, but let’s be honest, chances are they will. 

For example, you just moved to a new town, and you need to get your oil changed. You have a couple of options, take it to a dealer or find a local mechanic and lube shop near you. You opt for the latter, and you type in “oil change near me” into the Google search box. On the SERP, you will see several relevant Google Ad links to mechanics websites that do oil changes before the list of organic results or even the three-pack. You can click one of the ads and find out more about that particular shop.

This is an example of one of GSNs’ most significant benefits. They can accurately target and reach people at the precise moment when they are most ready to connect. As a result, as long as you bid on the proper keywords for your sector, you may be in front of potential clients at the precise moment they are browsing for your services.

7. Google Search Network Ads can help you focus on the local market

GSN can be an excellent complement for local businesses that have an online presence other than a social media page they think is their website. Think about this, if you run a local service area business, you don’t care about appearing in search results outside of your service area. GSN will let you target searches based on a geographical area and effectively reach potential clients in your area. For searches on a mobile device, you can have ads with location and call extensions functionality that will display your phone number and shops location. This makes it easier for the client to or call you or get directions to your location. Also, by using a geographic range to limit your keywords or keyword phrases, you avoid competing with national brands and reach your local clientele.

8. Google Search Network Ads can be budget-friendly

Google will let you set key parameters in your campaign that helps you to control your spending.

GSN works by allowing you to bid on a cost-per-click basis. This means that you only pay when somebody clicks on your ad, thus the term pay-per-click or PPC. With the bidding system, you can set a maximum you are willing to pay for a single click, then the system will not let you exceed it. There are other controls you can implement, but for the scope of this post, I will leave it at that.

9. You can cancel your Google Ads campaigns at any time

Two advantages of Google Ads and PPC, in general, are that you can pause your campaign at any time if it is not profitable. This provides you a lot of freedom and the opportunity to regulate your budget better. 

10. Get a leg up on your smaller competitors

It doesn’t matter if you are a general contractor, mechanic, softwash business, or a plumber. You will always have rivals that are continuously attempting to steal your traffic. The competition between you and your competition will always be challenging. This is the same for SEO, social media, or PPC ads. Fortunately, GSN allows you to outperform your competitors, all for the right price, of course.

11. Target multiple audiences that use the same service

The best way to explain this point is by example. Let’s say you are a mechanic and you can do oil changes, and it is your sweet spot and the most profitable for your business. With a Google Ad, you can target a wide range of people looking for oil changes and servicing. They may own a compact car or a diesel pickup truck. Either way, if it has an engine, it will need its oil changed. With the GSN, you can target both demographics by tweaking the keywords for essentially the same essential services.

12. Ads will let you send people to specific landing pages

With organic search, Google will serve up the page that it thinks is the most relevant for the searcher. With ads, you can control that somewhat based on the keywords you are bidding on and send them to a page on your website that focuses on that keyword.

Frankly, the last thing you will want to do is send your paid traffic directly to your home page. I know you have agonized over the design of it, but the fact is most of the time, that page isn’t set up to convert a visitor right off the bat. You would be much better off sending them to a page that is focused on the keyword or problem they are trying to overcome and convert them there.

Cons to Google Search Network Ads

Here are seven cons in no particular order to using Google Ads to help get the word out about your small business or service area business.

1. Click-through rates can be low

According to Searchenginewatch.com, “Google Ads advertisers are getting conversion rates of 3.17% on the Search network and 0.46% on the Display network."

2. You pay for clicks regardless of conversion

Now you know going into this, you are going to be paying for clicks. The issue comes in when those clicks are astronomically expensive. Want to know how expensive? Take a look at the Keyword Top Lists from SpyFu.com. As of the writing of this post, the keyword phrase “how to put my business on google map” was $977 per click for something free to do through the Google My Business listing service.

Now let's say you were bidding on that keyword. Every time someone clicks on your ad or, even worse, accidentally clicks it, you still have to pay Google. Google doesn't care if you didn’t convert them or it was an accident. You still owe them $977. 

3. Hard to compete with bigger companies

In an often-cited article by Robert Kenney titled “Google AdWords - Destroyer of Small Business,” he references many of the same sentiments that I have (more on that later). In his article, he hits these significant points about what was then Google Adwords. 

Advertising on Google AdWords was a grand equalizing force. Any Tom, Dick, or Harriett could create a campaign and start delivering high-quality traffic to their website at a reasonable cost. Win-win, no bones about it.

But nowadays (approximately 2016), the metrics of this channel have changed dramatically, making it impossible or nearly impossible for small and mid-sized business to turn a profit using AdWords. In fact, most small businesses can’t break even using AdWords.

This goes for many large businesses as well, but they don’t care. And that is the key difference and precisely why small brands using AdWords nowadays are being bludgeoned out of existence.

AdWords is was so great at acquiring customers that large organizations have carved enormous budgets devoted to AdWords spending. It’s not unusual for a big brand to spend $300,000 to $500,000 – per month on their AdWords campaigns.

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You can try to use Lifetime Value to rationalize very high per-click costs. That’s what managers in big online marketing departments are doing. But this sort of economics is far, far riskier for smaller brands and companies. They don’t have the cash flow or often a 12-month or 3-year plan required to make this work. They don’t have the market dollar war chest needed to make this work.

4. Limited Number of Characters

One complaint that you will hear about Search ads is the limit on the number of characters you can have. Currently, you can have up to three headlines of 30 characters each, two descriptions of 90 characters each, and two paths of 15 characters each.

5. Mistakes Can Cost You Dearly

In Perry Marshall's book “Ultimate Guide to Google Ads,” he says that, 

There's an old saying: “You can't learn to ride a bicycle at a seminar,” and it definitely applies to Ads.

When Google Ads (formerly Google AdWords) was brand-new, there were many inexpensive clicks available, and you could find your way by making lots of cheap mistakes.

Those days are over today. That strategy will get you slaughtered.

Given Perry Marshall’s explanation above, you can see that it isn’t necessarily easy to learn. Here are a few things to watch out for:

  • Navigating the tool can be complicated
  • Understand how the bidding system works
  • You have to figure out what keywords you need to target and not going with your gut or what you think will work.
  • You have to invest time into monitoring how your ads are doing and making tweaks whenever needed. Or, in other words, test and measure!

6. Keyword pricing can impact your budget

Because keyword price is heavily impacted by your competition, it can have a significant impact on the money you've budgeted for Google Ads. If more businesses are competing for the same keyword, then your bid will need to be higher to compete. If a national advertiser with a considerably greater budget than yours decides to boost their bid on the keywords, you're targeting. You’ll have to increase your budget to keep up with them.

7. 59% of users don’t trust online ads 

Kristen Herhold with Cluth.io reports in a post titled How Consumers View Advertising: 2017 Survey that according to their findings, that “The least trustworthy advertisements are the newer forms of advertising; just 41% of respondents trust online advertisements and 38% trust social media advertisements.” One can’t help but wonder what the statistics are now following the Facebook-Cambridge Analytica scandal that was exposed in 2018.

The least trustworthy advertisements are the newer forms of advertising; just 41% of respondents trust online advertisements and 38% trust social media advertisements.

Pro or Con, your call

The below list could be seen as both a pro or a con, depending on several factors. Therefore, I will let you make the ultimate decision.

1. Small businesses will usually spend between $9,000 and $10,000 per month on PPC

Ryan Maake with WebFX says that “Generally, small-to-midsized companies will spend $9000 to $10,000 per month on Google Ads, which doesn’t include additional costs, like software.” Depending on your industry, it could be more or less than that. However, if you are in the insurance, legal or financial industries, you can bet you will pay more. On average, these businesses account for more than $1.2 billion per year in PPC advertising on Google.

enerally, small-to-midsized companies will spend $9000 to $10,000 per month on Google Ads, which doesn’t include additional costs, like software.

Benyamin Elias with ActiveCampaign says that “Google Ads are generally not worth it if you can’t spend at least $1,000 per month, because you need to test what works for your business.” If you are just starting, Google recommends $10-$50 for a daily budget for a Google Ads campaign.

2. The potential of Google Ads is practically limitless

Google Ads can be a scalable marketing strategy. With it, you have millions of keywords that you can bid on and new ones every single day, not to mention an almost unlimited audience to target. The only real limits are your time to invest in researching keywords, your budget, and your capacity to service clients.

Final Thoughts

I have strived to keep my personal opinion out of the pros and cons list until now. Personally, I do not like ads when it comes to radio, TV, an online display ad, or a search network ad on the SERPs. I especially despise social media ads. I despise most of these because they are often an interruption to what I am watching, listening to, trying to read, or trying to find. Frankly, I am not alone as “according to the latest estimates, the ad-blocking user penetration rate in the United States stood at approximately 26 percent in 2020, indicating that roughly 73 million internet users had installed some form of ad-blocking software, plugin, or browser on their web-enabled devices that year.” (Source: Statista)

The bottom line is this; I readily admit that I am a minority in my general feeling on both display ads and search network ads. I also see value in Google Ads and PPC as a whole for specific topics. My advice is if you can really hone in on a keyword or keyword phrase that people are actively searching for, then it may be worthwhile. In other words, think sniper rifle versus a shotgun.

I would also be remiss if I didn’t mention that one shouldn’t think that ads are the end-all-be-all solution to getting more clients. Your website is still where you need to direct people to learn more about what the ad is offering or where you complete the conversion. In other words, small businesses should utilize PPC to guide their SEO strategy, rather than relying just on PPC to gain exposure in SERPs.

If you find yourself thinking about starting or implementing a PPC campaign, then reach out to us. We are experienced in helping small businesses grow and get the most bang for their buck, be it with PPC, content marketing, or a combination of both.

Chad Treadway

Written by:  |  June 21, 2021

Chad is our business development manager. He will help you survey your business needs, ensuring you are educated on your options before suggesting any solution. Chad also has several certifications through HubSpot to better assist you with your internet and inbound marketing.

See Chad Treadway's' bio: cubecreative.design/about/chad-treadway