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Google AdWords ROI

AdwordsNormally I wouldn't speculate about something like this, but after hearing a common theme so many times I can't resist...  I'm talking about Google's AdWords program and whether it's a good investment.

In the past few weeks I've had three different conversations with three different people from totally different industries and all of them were complaining about the poor ROI from their AdWords campaigns.  Only one of these three companies is involved in book publishing, but it was interesting to hear how all three have come to the same conclusion: They're all abandoning any future AdWords campaigns because the click-thru's have been so expensive and the conversion rates are miserable.

My own browsing experience is a reasonable example.  I rarely click (maybe 6 times in my whole life) on any of the "sponsored links" in Google search results and I've never bought anything as a result of those clicks.  Never.

I wonder how long it will be before someone comes up with a more effective advertising model than this.  I realize that Google is making money hand over fist but it sure seems like there are opportunities to build a better mousetrap.  I'm hoping that 10 years from now we'll look back and laugh at the simplicity and inefficiency of the current online advertising model.

Comments

Newt Barrett

Joe,
I experimented with AdWords and with the Yahoo version as well. My experience was also disappointing. In my field of marketing, any broad term was so expensive that I couldn't afford it. 'Content marketing' was cheaper but ineffective. I got almost no traffic from a variety of ad approaches.
Although it might seem self-promotional, I genuinely believe that the best long-term approach to driving traffic is to provide a lot of targeted, quality content over time.
As of today, when you search for 'content marketing', my site is #1 on Google and #2 on Yahoo(after the content marketing page from Wikipedia). I haven't done nearly enough SEM or SEO. I have simply tried to do the best job I can writing stuff that people will want to read.
For what it's worth, several months ago, I had achieved page one status on Google, but disappeared sometime after and was many pages down the hierarchy. So, I'm delighted to be #1 for the moment, but am not taking anything for granted.
The bottomline, organic google search results are the #2 traffic driver to my site. #1 is from 5 cent ads on Stumbleupon--but that's another story.
Newt

Joe Wikert

Newt, you make an *excellent* point. I've had the same experience. For example, if you Google "average advance" my blog is the first link that pops up. That phrase and several others related to publishing are what drive the majority of my incoming traffic from Google. And all that traffic is coming to me without having to invest in AdWords or any other pricey campaign.

rbtroj

The only businesses getting ROI on AdWords are porn peddlers.

Atilla Vekony

Joe,

We are a book publishing company where we use PPC ads to reach authors who want to self-publish their books. I can confirm that the ROI from PPC ads is less and less attractive. We're selling services that are hundreds, thousands of dollars' worth, and I can't imagine what the ROI would look like for a PPC campaign that is selling a book for $20...

I have found that vertical PPC services (like Business.com) have a much higher returns on investment, although still very low. As the rates are going up and as the ROI is diminishing, businesses will need to turn to what they should have been focusing on all along: provide excellent content on their sites (SEO) and get clients by referrals (customer service, networking).

Newt Barrett

I'm gratified to see that Atilla, who knows about selling books and book publishing services, emphasizes the importance of content above all.
Indeed, I believe that, as traditional media companies struggle, the opportunity for product and service companies to become publishers has never been better.

Seth B.

It depends on the vertical you're advertising in and how you monetize the traffic...95%+ of Google's revenues come from these ads, most of them purchased by people/companies monitoring the ROI with an eagle eye. So something's working (i.e. they keep growing their revenues, meaning advertisers are investing more and more money). It's a confirmed fact that hundreds of advertisers are spending hundreds of thousands, if not millions a dollars a month with Google...so while it may not be a perfect system, it's a far more accountable way of advertising than has been seen in quite some time.

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