Does Google Ads Work & Will it Work for My Startup?

Google Ads are ad units that run on Google search pages.

Marketers love Google Ads. Why?

1. They’re scaleable: there’s almost infinite search volume on Google.
2. They’re targeted: searches can get pretty targeted to the intent of the user.

What are Google Ads?

When you search Google, you see two types of results: advertisements and organic results.

How Much Do Google Ads Cost?

Google NASDAQ:GOOG didn’t become a $817B company by giving away ad space.

Google Ads aren’t exactly cheap.

Amazon spent $158 million on Google Ads alone in 2013. See some of the other biggest spenders below.

Google Ads is an auction.

Some of the largest advertisers can bid very high on keywords ($$$) and “win” the auctions, appearing #1 in Google’s search results.

Others can bid less and appear #2 or #3.

Still others don’t bid at all and instead focus on a search engine optimization strategy to try and appear at the top of the organic results.

Unsurprisingly, some industries have become famous for hyper-precise, hyper-competitive bid wars. The online travel vertical — Priceline and Expedia — is one of the most competitive.

Because search intent is so local, there are literally hundreds of thousands of SEM auctions happening in the travel industry at any given moment. Below is the SEMRush report for the “flights to san francisco” search query. This query is Googled over 12,000 times per month. Close derivatives of that term are searched many thousands more times.

Now imagine the keyword combinations: “flight from san francisco to la,” “san francisco flight to boston,” “flight to boston from san francisco july 7.”

In the travel vertical, companies employ teams of search engine marketers to manage their portfolio of keywords, optimizing on a daily or even hourly basis. That shit is crazy!

Will Google Ads Work for My Startup?

The good news is that Google Ads are relatively affordable and easy to test for small companies too. You don’t have to spend millions.

Countless small businesses and tech startups have crushed it with a search engine marketing-focused acquisition strategy.

But which businesses aren’t Google Ads-friendly?

Google Ads May Not Work if…

1. You’re in a huge SEM vertical

With few exceptions, it is tough to make search engine marketing (SEM) work if your startup is playing in the travel, loans, legal and fashion space.

• You probably won’t beat Kayak.com, Priceline, Expedia and the rest in the travel search vertical.
• There are a lot of highly-capitalized online lenders who own the “lending” search verticals for real estate, personal loans, auto and student loans.
• Good luck beating LegalZoom, Avvo or RocketLawyer in the legal space (though local businesses can succeed in this space!).
• Zara, Nordstrom, Urban Outfitters, ASOS and every other retailer have “white tee shirt” somewhere in their Ads portfolio. You likely won’t beat the big fashion retailers.

Unless you are prepared to outbid and out-optimize your competition you will face an uphill battle in any of those search verticals.

Of course, there are exceptions and occasional pockets of success with Google Ads for almost any type of business.

2. You’re in a space with no search volume

While it is all-powerful — even omnipotent, Google cannot force Googlers to search for anything. Some verticals and products simply have no search intent.

For instance, if you’re selling a “salmon filet pillow,” you might do quite well, but not with SEM.

Pretty much nobody on earth is searching specifically for that.

Use a tool like SEMRush to determine if your startup product offering has search volume.

3. You’re a Blog or Online Publication with Low Lifetime Value

Google Ads is perfect for acquiring very specific (based on search intent) customers for as little as a couple bucks.

But blogs and online publications make very little revenue per visitor as compared with websites selling a product. If a blog is relying on selling digital ad space, they’re making just a few cents per visitor.

This blog makes a few hundred thousand dollars per year, but our revenue per visitor is only a dollar or so. If we get 30,000 site visitors in a given month, we make about $30,000.

We can’t possibly afford Google Ads — particularly when you consider that most Google Ad keyword bids are more than a couple dollars per click.

Try Google Ads If…

1. If Your business is urgent

Interestingly, local small businesses like locksmiths, glass fixers and repair shops perform pretty well with Google Ads.

Some of the auctions for those keywords bid keywords to $50 or more per click.

The reason is that these services are needed asap. If your car is broken down, you are likely to call the first or second Google search result to get it fixed because you can’t get to work without it.

2. There is high search volume and low competition

Do you remember the movie The Endless Summer – when Robert August and Mike Hynson crest the hill in South Africa and finally see the perfect wave at Cape St Francis?

That is what it feels like when search engine marketers find a batch of keywords that are high traffic and low competition.

While it’s tough to know whether your small business or startup will hit a jackpot of profitable keywords, but I highly recommend using SEMRush or the Google Keyword Tool to do your homework and find out.

In order to your research, you will simply type the keywords you’re considering into SEMRush or Google Keyword Tool. Both tools spit out a list of derivative keywords (sometimes hundreds or thousands) accompanied by a traffic score (“volume”) and competition score (“KD”).

SEMRush’s “Phrase Match Report” gave me 139 keywords for the search query “analytics software.”

In order to find profitable keyword sets that relate to your product, you have to pick terms with low competition (KD score) and, low CPCs (cost per click).

CPCs dictate how much you will pay for each click that comes to your website from each keyword ad.

3. SEO is working

If you’re already mastering Google organic search (SEO), you may find success with Google Ads.

Want to read more? Learn how we’re making $90,648 this year with just one SEO strategy.

It makes sense. If you’re converting your organic traffic today, why not double down and get even more of the same traffic that’s working?

If you’re lucky enough to have an SEO strategy that’s working, check out the Google Search Console and landing page report in Google Analytics to uncover what keywords you’re ranking for and converting.

You should test bidding on those same keywords in the Google Ads editor.

What Next? How to Run Google Ads

Step 1: set yourself up to track your ads

1. Set up conversion tracking, so that Google Ads can report on cost-per-acquisition (the total advertising cost divided by the number of products sold), allowing you to optimize campaigns and keywords by performance on a cost-per-acquisition basis. Adding conversion tracking to the site is as simple as adding one line of code to your website. Set up conversion tracking here.
2. To start your campaign, go to https://adwords.google.com, find the “Get started now” button, and sign up for an AdWords account. Once you’re logged in, click the “Create your first campaign” button.
3. Click the “+ Campaign button.” From the drop-down menu, select the campaign type you want to use. Select “Shopping.”

Step 2: Determine Your Budget

Now that you have tracking in place, figure out how much you are willing and able to spend on Google Ads.

As discussed above, Google Ads are… not cheap.

But, that doesn’t mean they aren’t worth it.

In my mind, a great starting point for a Google Ad budget is $25 per day. You can obviously increase or decrease this amount once you have a better idea of what you need to bid per keyword. The nice thing about setting a budget is that Google will make sure you do not spend more than that amount – a great way to make sure you are tracking your spending carefully.

Another good way to set your budget is to figure out what percentage of clicks will become sales conversions.

If, for example, 5 out of 100 site visitors actually purchase a product, then you have a 5% conversion rate. With this knowledge, you can decide how much you are willing to spend for each person to purchase a product.

If you sell products that cost $1000, you are likely willing to pay more than someone who sells products that are $5.

Step 3: Set Your Location

Google gives you the power to decide what geographical location you want your ads to come up in.

This is super important particularly for local businesses, because you can make sure your business’s ad only comes up in the areas you serve. This saves you money and increases your conversion rate.

You can even get really specific and target a particular radius from your zip code by clicking “Advanced search” and choosing “radius targeting.”

If, for example, you know that your customers are typically within a 15 mile radius of your business, you can target that area to get an even better conversion rate.

Another tip for using radius targeting is to set a collection of different radius targets and then adjust bid by location. This way, your ad spend will be focused on users who are closer to your locations.

For example, you can put in your business’s address and then target two miles, six miles, and ten miles. Then, add bid adjustments, so that the closer radius has a 20% bid increase, the medium radius has a 10% increase, and the largest radius doesn’t have an increase.

Step 4: Choose A Network

With Google Ads, you can choose whether your ads are displayed exclusively on Google’s search results page – the search network option – or on the display network, which includes ads on Google content sites as well.