Google Adwords: Your Business’ Best Friend or Worst Enemy?

This article was sparked by a conversation I had with a friend a few days ago. His dilemma is pretty cut and dry:

If you're not careful, Adwords can burn a huge hole right through your bank account.

His business (he installs swimming pools just like my company) is not getting enough leads, his suppliers are not sending him enough leads, and his website stinks in terms of lead generation…. and SEO(free search visits).

So what was his proposed solution to the problem? Well in his mind, he needs to get leads right away. He also knows the old methods of advertising (radio, print, TV,etc) are no longer the answer. But with a website garnering zero visitors via organic search, his last line of relief is Google Adwords (aka Pay Per Click). And frankly, he’s right—at least for now.

In terms of Google Adwords supplying quick, qualified leads for businesses, it is a viable solution– but with it comes the potential of some major problems, which are as follows:

• Spending money faster than you can burn it on a camp fire
• Reaching a small percentage of your customer base
• Adwords Dependency Syndrome (ADS)

Money, Money, Money

Heck, even my friend mentioned how one of his buddies in the pool industry had spent $120,000 on Adwords last year just to sell 30 pools. Although such might sound like a good trade off to some, the amount this person was spending in advertising dollars(to Google alone) just for one sale was roughly $4,000. Considering the average sale price was about 35k for one of the gentleman’s, the numbers were eating him alive.

My business used to be no different. Because our website stunk for so long in terms of its SEO, we were forced to give the Mother Ship(aka Google) way too much of our money. But like every business in this dilemma, we needed leads from somewhere, somehow, and fast. 2 years ago, we were getting roughly 85% of our traffic from Adwords. Literally, every 2-3 days we were having $500 kicks to the groin by the ‘Mother Ship’. Although many leads were coming in, we knew there was still room for improvement, and Adwords was quickly becoming a blessing and a curse.

Percentages

Although the studies vary, the general rule of thumb is that 60-70% of ALL searchers on the Internet will not click the right side of the page—AKA Sponsored Links. There are a variety of explanations for this but it really just comes down to, as the old adage states, ‘People don’t want to be sold, they want to buy.’ And because of this paradigm, the majority of Internet users never even bother clicking on Adwords advertisers. So as you can see, if you have a business that is relying solely on Pay Per Click campaigns to drive traffic to your website, then you’re likely missing out on over half of your potential clients.

Adwords Dependency Syndrome (ADS)

I’ve seen many businesses suffer from ADS. And why is this such a deadly disease? Because the fact is most businesses are now finally waking up to the reality that if they don’t have a powerful Internet presence, they are up a creek without a paddle. Old school advertising will soon be as extinct as the dinosaur simply because of the poor return on investment (It’s too freaking expensive). But at the same time, because businesses are now fully understanding just how consumers shop and research, and because so many of these businesses have not bothered to properly optimize their website, their only means for lead generation is Pay Per Click—the same dilemma my friend had. This leads us to a whole new problem, which is the fact that so many businesses are advertising on the ‘Mother Ship’ and using Adwords that the cost/competition to advertise on Pay Per Click and actually showing up on the first page is becoming outrageously expensive and unaffordable for many important industry keywords.

So this is the catch-22 that so many businesses are now enveloped in. And what’s the solution? Although there are hundreds of ways to deal with small business marketing in 2010 and beyond, here are my top 5 solutions for anyone who hasn’t yet gotten on the train:

1. Change your paradigm: Embrace the internet and everything about it. See yourself as an internet/web expert (If you’re not already, you will be someday, so you’re essentially just stating a fact before it has actually happened.)
2. Take charge of your website: You no longer have to be a web designer to design and manage your business’ website. With so many incredible CMS (content management systems) out there, any dummy (I should know) can now produce great websites.
3. Along with #2, take the time to truly study your website. Develop it. Learn analytics. Because they had such a profound impact on my life and my business, I suggest you start with Hubspot. The money you’ll spend on their monthly service is more than worth it.
4. Start Blogging: I can’t talk about the power and impact of this medium enough. It does not matter what type of business you have, you need start integrating blogging into the everyday life of your business. Only 1-2 articles a week and you will see major organic (free) search results in no time.
5. Continue with Adwords: As I mentioned earlier, Adwords used to generate over 80% of my business’ web traffic. Today, after blogging and working on SEO for less than one year, Adwords brings in roughly 10% of all traffic. Despite the fact that 10% is a low number and many people would say that because my organic search traffic is so good I don’t have to worry any longer about Adwords, I still like leveraging both mediums. And although only 20-40% of all internet users actually click on Adwords, these same shoppers have a much higher conversion rate in many cases because they are so serious about finding a certain product. Also, when it comes to Adwords, don’t feel like you have to rank #1 just to get clicks. What matters is that you’re on the first page. The difference between the two can literally be thousands of dollars over the course of the year.

So is Google Adwords bad for business? No, of course not. But like every other information technology we pay for, it requires a balance, oversight, and hard work. So that’s the task before most businesses in today’s world. And to sum it all up, I’ll leave you with this most simple guideline to follow.

Self sufficieny(SEO) + a little reliancy(Adwords)= Small Business Marketing Success

Questions or Comments about Adwords, Small Biz Marketing, etc? Please don’t hesitate to put your thoughts, article additions, etc below.

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