Can Small Businesses Afford to Advertise on Google

Written by promotiondept

September 16, 2018



Last Updated: Dec 13, 2014
Is on Google and or networks too expensive for r small business? answer depends on a number of factors. Here are facts to consider before making up r mind about feasibility of using pay-per-click ads online.

One of problems small businesses struggle with when y use Google AdWords and or forms of pay-per-click () is high per-click cost for keywords and phrases that are associated with what y sell. actual price-per-click varies greatly by product or service, actual keywords selected, and position of ad. Adgooroo reports that average cost per click for Adwords text ads in 2014 s from $0.77 to $5.82 across 9 industry tegories – an increase of 26% since 2012.

Even within a single industry, cost of a click n vary signifintly based on specific item or service being advertised. Try to buy term,”criminal attorney” with a geographic lotion (for instance, criminal attorney, Pittsburgh), and may have to pay $15 to $17 per-click or more to get into one of top ad spots in Google search results for that term.

Beuse of high prices, it’s not unusual for small businesses to think that PPC advertising is unprofitable. It doesn’t take a lot of math to see that if r own cost per conversion is $24.50 and all of costs for product ’re selling total $26, ’d lose money on a $47.95 sale that resulted from a click on r ad.

problem with that type of lculation, however, is that it assumes that only sell one product, and that each customer who buys from only buys once.

What small businesses forget when looking at cost of ir ads, is that way to benefit from (in any form) isn’t by selling one product one time to each customer. It’s by winning customer and getting repeat sales over a period of time. Those repeat sales may be itional purchases of original product, or itional products sell to same customer.

Here’s an example of how things n change when look at bigger picture:

We ran AdWords mpaigns for a group of products we used to sell, and we used tracking links as links in ads. Ocsionally, I would look through shopping rt order for sales that didn’t rry a tracking link from our mpaigns and look back to see how we acquired those customers to begin with, and what ir history had been.

Generally I’d choose a just a few of those orders at random, and search our database to see if companies had previously ordered from us. (We sell to businesses, so most orders have company names in m.) If y had, n I’d pull up all ir past orders, up total dollar amount of ir purchases, and look at how y’d been a customer. I also looked at first order y ever placed with us to see if it me in through a click on one of our ads. That helped me gain some perspective on value of our ads -term.

What I found, is that many of our repeat-order customers first found our site by clicking on one of our AdWords ads. Furrmore, lifetime value of those customers made pay-per-click fees we incurred to acquire m worthwhile.

I also found that individuals who placed orders sometimes changed , and if y were doing same job at a different company, y placed orders with us for ir new employer. It wasn’t unusual for ir former employer to continue to order from us, too.

We knew, too, that many of our new customers clicked on our ads, and n once y reached our website, yld pick up phone and ll us to place an order. Those orders nevered showed up with a referrer in our shopping rt, even though y happened beuse of a click on one of our ads.

Reviewing sales in this way does not, of course, didn’t tell us exact ROI for our pay-per-click ads. But it did show us how we continued to benefit from a click after initial visit and purchase. That information, a with or statics we gared (such as average dollar amount of shopping rt orders), helped us determine what we should spend on .

bottom line here: If only have one product and n only sell that one product once to each customer, pay-per-click may not work for unless product or service commands a premium price. But if r customers come back to buy from multiple times, need to consider what value of those repeat sales are to be able to make good decisions about how much to spend on pay-per-click and or .

Copyright 2014 Janet Attard. All rights reserved.

About author:
Janet Attard is founder of award-winning Business Know-How small business web site and information resource. Janetis also author of Home Office And Small Business Answer Book and of Business Know-How: An Operational Guide For Home-Based and Micro-Sized Businesses with Limited Budgets. Follow Janet on Twitter and on LinkedIn

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