Google Adwords Revisited
1st February, 2012
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I am going to write this even though I’m on shaky ground with the flurry of changes Google brings us this winter.
I have compiled data on clients’ performance on Google Adwords over the last 4 years and two things I have known are happening have been proven:
1) The cost of Google Adwords is going up
There is no doubt in my mind that the cost per click is being driven upwards – this is what Google wants obviously and there are numerous factors contributing to it.
- Google’s own desire to get more out of us
- Increased competition between advertisers
- Google ‘quality score’ through which they charge more if an advert is deemed unsuitable.
What this means for us advertisers is simple – we’re paying either more money for the same number of clicks or the same money for fewer clicks.
Example (the data is real):
Client A in 2008 was operating on a budget of £100 per month and getting 590 clicks. In 2011 this same budget brought them just 434 clicks – a drop of 35%.
Client A in 2008 was operating on a budget of £100 per month and getting 590 clicks. In 2011 this same budget brought them just 434 clicks – a drop of 35%.
You easily say that’s actually a price hike of 35% in four years… wow.
2) The cost of Conversions is going down.
The truth is clicks don’t matter – what matters is the cost of Conversions – getting someone to do want you want them to do on your website – be that buying something, enquiring about something, requesting something. Google Adwords in this area is proving remarkably resilient. But only if you know what you’re doing.
- Big updates in Google Adwords make it much more complicated to use and get the most from
- Your keywords and Adverts matter more than ever – they are what drive conversions
- Your website landing pages have to match a user’s expectations to increase the likelihood of a Conversion
The bottom line is that Conversion matters and it is the cost of conversions that counts.
Example (the data is real):
Client B in 2008 was operating a £300 monthly budget and we managed to get 1046 ‘Conversions’ in 12 months. In 2011 that number went up to 2043… a 49% rise in Conversions – this led to a reduction in cost per conversion of 57% – from £1.76 to £1.02 per conversion.
For this client Google Adwords has been a success story – their website and budget remained virtually the same throughout the period and the Advertising has paid off again and again.
Another Client C has had a Budget of about £300 per month and has seen the cost of clicks rise from £0.52 to £0.72 (38%) – but their cost of conversion has fallen from £90.69 to £49.42 (down 54%). So even though Google costs more – it’s very much worth it because the results are costing less.
This all matters to you – because it means Google Adwords still have a very effective way to advertise. At the moment Google is getting bad press and people are thinking about leaving the system, perhaps spending more on SEO and other techniques to get their websites up on the search engines. But Google Adwords still offers one of the fastest and most cost-effective ways to advertise on the web.
My maxine holds true – if you are in any doubt about any advertising service compare it to Google Adwords and decide which one your money would be better spent on – Google Adwords wins every time in my book.