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Is Google Ads Still Worth It?

Updated: Nov 14, 2023

Short Answer: Maybe.

It depends on several factors such as your business, products or services you offer, products or services you want to target online, keywords (i.e., keywords your potential customers are searching for) you're targeting, and your budget.

Long Answer:

We've found that actually Google Ads are not for everyone.

There are many factors to consider if you want to run Google Ads for your business:

1. Are our ideal customers searching for our keywords that we can afford to pay for?

2. Do we have budget for hiring an agency to run and optimize our campaigns and pay ad spend to Google?

3. Do we have optimized landing pages for the goals we want to accomplish so that the traffic we send to the page easily converts for what we want?

As you can see it is worth it if you answer these questions thoroughly.

How do Google Ads work in general?

This is my SUPER simplified way to think about how Google Search Ads work.

If you're doing Google Search Ads then you're targeting keywords to show up as a "sponsored" ad. i.e., top of the list or on page 1.

The benefit is the "pay to play" model that guarantees (if you with the bid) that you'll show up to prospective customers when they search for a keyword in your campaign.

However, your ad only shows up if you win a "bid" for the keyword you're targeting.

For example, if you're targeting "Electrician in <geographic location>" and the cost-per-click range of the keyword is $2-$10 AND you win the bid for the cost of that keyword, then your ad will show when someone searches for those keywords. Cost depends on many factors.. so how much does Google Ads cost?

It's critical to do keyword research first to determine if you have the budget to spend on sending traffic to your website.. but remember that traffic is just the first step, if you don't have a strategy to collect or capture a lead (product purchased, phone number, email, or appointment booked) then you're wasting your advertising spend.

Will Google Ads work for my business?

Let's talk different business price points: Low ticket businesses vs High ticket businesses.

Low Ticket Businesses

If you're a "low ticket" business, then your Advertising Return on Ad Spend (ROAS) will be lower because you're going to need to spend at least $1500/month on Google Search Ads to really see a volume of traffic that will increase the chances of higher conversions.

Let's run the numbers on "low ticket" and it'll make more sense.

Let's say you sell a $48 product (which I'm considering "low ticket" in this case, i.e., anything under $500).

If you pay $5/day for 30 days that's $150 you spent on Google Search Ads... a budget that will probably result in you wasting your money. (I wouldn't recommend $5/day in Google Ads, ideally closer to $30-50 per day to start with, unless your keywords are more expensive.. more on that later).

Let's get more specific..

If the cost-per-click for each keyword ranges from $2 - $10, that means you'll be able to afford the less competitive keywords under $5 because your budget is $5/day.

If a keyword you're targeting is over $5 you won't win that bid because your budget limits this naturally.

Which in reality means these results:

1 click at $5, 2 clicks at $2.50, or 3 clicks at $1.67, etc.

At 1, 2, and 3 clicks per day you're website BETTER convert well... and if you understand the E-Commerce space you know your conversion rate average will be 2-3% (unless you've increased it with optimized landing pages and behavioral analytics data).

So at the low end:

1 click per day = 30 clicks per month.

Out of 30 people visiting your website, let's assume 2-3% conversion is one $48 purchase.

You spent $150 to make one $48 sale. Some might say, "that's a bad return on ad spend". Yes, it is if you look at it purely from this perspective.

BUT, look at the brighter side. You may have also captured emails, phone numbers, cart abandonments, pixel data, or other pieces of information that you can "retarget" now into higher ticket items or to remind them to purchase.

At the higher end:

3 clicks per day = 90 clicks.

Out of 90 people visit your website, assume 2-3% is 2-3 purchases or $96 in sales.

You spent $150 to make $96 in sales. Again, not AMAZING return on ad spend on the front-end but remember that you're paying for "information" or leads directly from Google and you need to capture it somehow.

More ad spend, means more traffic. Let's look at this scenario.

Instead of $5/day let's say we want more clicks so we have to increase our Ad spend.

500 clicks for example would cost at $2.50 per click = $1,250.

At 500 clicks, let's assume 2-3% (10 people) purchase the $48 product = $480. So you spent $1,250 to get $480... again not the best return on ad spend, but you can retarget those users as mentioned earlier.

My take on why Google Ads is challenging for low-ticket

When you sell lower ticket items it's more challenging to see a pure ROAS from the first 90 days because.. that's just it.. you're selling stuff that is difficult to see a return on ad spend online (unless you are comfortable buying these leads at cost, then re-marketing to them over time with upsells).

As a result, I think it's helpful for low-ticket products to be advertised, however, just look at it as your "buying potential customer data from Google" instead of "I'll make a HUGE ROI on this campaign".

At the lower ticket, Google Ads may not be worth it unless you look at Advertising as a "loss leader" that will capture leads for you to eventually upsell your customers over time... in other words, it's a long game at a lower ticket business.

So purely looking at it from this lower ticket perspective you have to consider several solutions:

  1. Capture the lead AND allow for up-sells to breakeven on your Ad spend (i.e., Add a $150 up-sell or higher instead of the $48 or as an add-on)

  2. Sell more expensive stuff or focus the Ads on a higher ticket service or product you provide

  3. Suck it up by running Ads anyway.. and think about the long-game with your customers instead of the short-term.. to know that your Ad spend doesn't always exactly translate into direct sales right now at a lower price point business.

  4. or... Don't run Google Ads at all and it's not right for you.

Higher Ticket Businesses

When I refer to "higher ticket" I'm referring to anything over $500 to purchase. Now, with this business model just know that cold traffic doesn't convert nearly as high because it's a longer sales cycle for someone to know, trust, like your brand to make a higher ticket purchase decision.

You know what I mean.. when you go to buy an expensive vacuum you research the hell out of it look at articles, price compare, before purchasing.

The challenge nowadays is everyone price compares so in the higher ticket businesses I would argue that you need to not be in the "price game" but in the "value game".

Meaning that if you sell a product or service that's higher ticket then it better have a higher perceived value so that price is not even a comparable option to the consumer.

This is where Google Ads thrives the most.

If you have a lower ticket product or service, forget about it.. and instead focus on "What's the highest value I can provide to someone AND charge a higher ticket for it?".

^^ This is the product or service you need to be advertising. Why? Because your Google Ads will have a higher return on investment.

Some examples of higher ticket services that we offer PPC for:

If you differentiate your product or service by showing value (in these cases solving major problems for businesses and consumers) vs price then you're golden.

  • Home Services

    • New Roof or Roof Repair Service

    • Plumbing Repiping Service

    • Water Heater Replacement Service

    • Restoration, Water, or Termite Damage

    • HVAC System Replacement Service

    • Foundation Replacement Services

    • Electrician Rewiring

    • Septic Replacement

    • Fence Replacements

    • Large Landscaping Project

  • Professional Services

    • Attorney Cases

    • Coaching Programs

    • Raising Capital for Real Estate Investors

    • Real Estate Buyer/Seller in a high-end or luxury neighborhood

    • Online Courses

  • IT Software & Services

    • Annual Software Licenses/SaaS products

    • Enterprise SaaS Sales

    • Mobile App Development Project

    • Cloud Consulting Project

    • SaaS Development Project

    • E-commerce Development Project

    • IT Managed Services Annual Contract

  • Health Care

    • Orthodontist Braces

    • Dentist Root Canals

    • Plastic Surgery

    • Laser Skin Resurfacing

    • Wellness Center Annual Memberships

So how to do you build trust with prospective customers?

  • Phase 1: Cold traffic - Strangers.. nobody knows you.

  • Phase 2: Warm traffic - They know you, you have their information, and you're providing value. This could also be a retargeting campaign.

  • Phase 3: Hot traffic - They know you, like you, trust you, have purchased from you, or provided a referral to you. This could be a retargeting campaign too.

As a result, you need to run campaigns for each of these phases to continuously provide value and drive traffic to your offers.

Let's get into the numbers

You sell a $1,000 - $10,000 service (i.e., a roofer or plumber repiping, or an Attorney, or a coach/consultant, or Realtor).

When you spend $1500/month on Google Search ads, this is 600 clicks at $2.50 per click, assuming 2-3% conversion that's 12 conversions at possibly $1k per conversion = $12k.

At the higher ticket product or service, you can see the opportunity for a higher return on Ad Spend is there compared to lower tickets because each customer, on average, is worth more.


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