Is It The Beginning of the End for Google Adwords?

This may be hard to believe, but Google Adwords is coming up on its 14th birthday, having started in October of 2000.  At the time, it was a revolutionary design, affording advertisers that their ads would be placed just where those who wanted and searched for your product would see your ad first and click accordingly.  Best part for the advertiser, you only pay when someone actually clicks on the ad.  How great is that!

This concept fueled Google’s incredible growth, as they took over the search world.  A whole cottage industry of search optimization consultants emerged to help companies move up the rankings.  Life was good.  It was Google’s world and we all were just living in it.

Google Adwords image

Now fast forward to 2014.  Google Adwords is multi-billion dollar enterprise, bringing in the bulk of Googles revenues.  Search marketing is huge!  And it has evolved; this is not the Google Adwords of the last decade.  But has it remained effective?  Recently, I did some consulting work in a very competitive and well-funded space.  With the visibility to the competitive landscape that various sem/ppc tools allow you to do, I had a unique snapshot of the industry.  Here are some of the things I found:

  • Huge dollars chasing very few clicks.  There reaches a point, in a competitive industry, where the cost for the next click is just plain astronomical.  Past the point where one can justify the cost of acquiring a new customer, even if everyone converted.  The key players keeping the price high (and typically there are 3-5 players who do this) are afraid of dropping their bids and letting the competition instantly get the traffic.  In this crowded a space, ads cease to be effective.  The searcher is presented with the maximum number of carefully-worded Adwords ads and over time, they are over-messaged.
  • Google’s quality score keeps new bidders out of the game.  Without a reasonable quality score, your ads may not display often.  However, in a crowded space, it is ulta hard to break in as the new Adwords advertiser.  After being shut out of Adwords, these newcomers will find other places for their advertising dollars.  The question is, do they ever come back to Google?
  • Very few will fill out a form on your landing page.  Once upon a time nearly all Google PPC ads went to a “squeeze page” where respondents had to fill out the form to advance in any way.  Today, few would fill out such a form.  In fact, in the industry I have been studying, one major competitor sends it’s PPC traffic to their home page, even at $50-$70 per click!
  • Searchers use Adwords as the default.  The majority of PPC clickers are not purchasers at all.  They are your current customers, vendors looking for your phone number and other not-so-valuable clickers.  These searchers click on the PPC links because they are visible and available.  The fact it’s costing the vendor money is likely a plus.
  • PPC results are different on Mobile Devices.  Frankly, it’s bit harder to scroll past the paid search results on your phone.  The searcher may be less aware what or organic and what is paid.  The situations in which mobile searches are executed may also change the way a search is executed or read.

I found it very ironic that Google’s Adwords world had fallen apart in the crowded industry I was watching, as that industry brings Google a nice chunk of revenue.  It’s ironic because when Google Adwords is taken to its ultimate conclusion, it doesn’t work well for the advertiser, just for Google.

Is this the start of the end?  Time will tell.  Google has changed in the past and will likely adapt.  Or Google’s ultimate demise has already started.  You decide!

What has been your experience with Google Adwords?  Is it a “fair” distribution of the ads?

 

You can connect with Eric on LinkedIn: www.linkedin.com/in/ericlundbohm/

Follow his updates on Twitter @lundbohm

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s