By Dennis Last update August 11, 2017 Comments: 10

google-adwords-wasted-money

Google Adwords’ reputation has taken a bad hit over the last couple of years. It went from being the darling of marketers to being expensive, outdated and unsexy.

While the headlines have shifted to new and sexier platforms like Facebook and Instagram, Google continues to post strong revenue numbers. Currently they are still at 4x the revenue of Facebook ($16.8 billion vs 4.5 billion in Q3 of 2015). And some of that money is spent by online stores, big and small, that are making a killing on the platform.

But truth be told, selling with Adwords is not all rainbows and unicorns. If you want to start using Adwords for your store, Google won’t stack the odds in your favour. In fact it will does exactly the opposite.

Let’s start by looking at 3 facts that Google never seems to address, but that have a huge impact on your results.

Fact #1: Adwords’ Default Options are Nasty

While it’s easy to get started with Adwords, it’s not easy to make it profitable. Google’s coupon bombing has worked very well and many businesses have started their own advertising campaigns. But with only very basic knowledge of how Adwords works, they quickly see their free coupon plus their own marketing dollars go up in smoke, without much to show for.

The Google Defaults don’t help at all. These are all the default options Google suggests when you are setting up your campaigns. Like every new software that you learn, when you start you’ve got no idea what every option means. So you figure what they suggest will be best for you right?

Wrong! Following the default suggestions might make your advertisements show up in mobile games or it might show your ads when people search for keywords that aren’t remotely relevant to your products.

Most of these options make more money for Google but make it a lot harder (or even impossible) for you to turn a profit.

Fact #2: The Platform is Super Competitive

Google Adwords has been around for over 15 years and during this time the cost to advertise has gone up dramatically. While in the beginning you could get clicks for as little as $0.05, today you might pay 10x that amount.

The companies that have been using Adwords have also gotten smarter, learning what works and what doesn’t and adjusting their approach. This gives them a huge upside and requires you to bring your A-game to beat them.

Fact #3: Not the Right Fit for Every Store

If you’re not selling the right products, generating sales with Adwords could be close to impossible. This is because of the following reasons:

  • No one is searching for the products, brands or categories that you sell. Nor are they searching for any problems that your product solves. Take a look at the Google Keyword Tool to get a feel for what people are searching for (and how often that happens!)
  • Your margins are small or your average order value is really low. (It’s hard to be profitable selling a $6 product if each click costs $0.5)
  • Your website isn’t generating any sales: people visit your site but can’t find their way to the checkout or they don’t want to the products that you’re selling.
  • You sell rare or unique products. If you have a very limited inventory (like 1 product), the scale of Adwords doesn’t work in your favour because ut takes a while to find the best combination of keywords, ads and bids that generate the best results.

If an entrepreneur tells me they can’t get Adwords to work, it’s usually because of one of those 3 facts.

Good news is that you can tackle the first two (Google defaults & intense competition) if you take the time to learn how to set up your campaigns correctly.

The third one is harder to address. If your site isn’t performing well, like a very low conversion rate or low average order value, those should be the first things to address.

But if there aren’t not enough people looking for your products, Adwords is not right for you. You could try use a different marketing channel to find new customers.

So it’s clear that Google can be very sneaky, but that doesn’t mean you should stay away from Adwords. I believe Adwords can still be very relevant for the right kind of store.

3 Reasons To Still Advertise Your Products on Adwords

Google Search box

It Captures Purchase Intent

Search advertising like Adwords captures people when they are actively looking for a product or a solution to their problem.

This means that they are much more likely to take action right then and there. Compare that to Facebook, where someone is browsing and you have to “interrupt” them to get their attention. This difference in intent is huge, and something only Adwords (or Bing) can deliver.

Let’s look at an example: someone that searches for “mens summer shirts” is probably a man looking for t-shirts to wear in the summer.  In the United States, there are about 880 searches of this keyword per month. That’s 880 people that are actively looking for a shirt. If you show them an ad with an attractive offer, there is a good chance they will end up on your site.

Huge volumes

Every day there are 1.2 billion searches happening on Google. And even though only a tiny tiny amount of them will be relevant to your store, that’s still a lot of potential business.

The example above: 880 searches for a shirt might seem very low vs the millions of people you can target on Facebook. But that is just one of thousands of potential queries you can show ads for.

A quick spin of the Google Keyword Tool shows the following alternatives:

  • mens shirts: 40,500 searches a month
  • casual shirts for men: 9,900 / month
  • mens casual shirts: 6,600 / month
  • mens short sleeve shirts: 3,600 / month
  • white shirts for men: 2,900 / month
  • mens fashion shirts: 1000 / month

It’s a Strong Sales Driver

custora-ecommerce-sales-by-marketing-channels
New customer acquisition per channel by Custora (2013)

The graph above clearly shows the impact of being present in the search results. Whether it’s organically through SEO or paid via Adwords (CPC). It’s already a couple of years old and Facebook has made good progress these last couple of years. But it still shows the potential of Adwords to bring in new business.

MarketingSherpa did a study in 2014 about which marketing channels that e-commerce companies invest in.

ecommerce-companies-marketing-investments
Marketing investments in e-commerce – MarketingSherpa (2014)

Email marketing dominated the investment chart, followed by social media marketing, SEO and paid search. So if it is in the top 4 for so many online stores, it would be foolish not to at least consider its potential to generate sales for your own store.

How To Sell on AdWords And Avoid Google Taking Your Lunch Money

When you start out, your first competitor is Google. Only when you jump through their hoops you can start to think of how to beat your competitors. Here are 4 approaches to do exactly that:

Start small

If you’ve got hundreds of products in your store, don’t start to advertise with all of them at once. You can pick a set of products or a category where you got bigger margins on to give you some extra room.

A smaller amount of products will also reduce the overall cost. As long as you aren’t 100% sure what you’re doing, it’s better to keep your costs under control. When you see orders come and the numbers start to make sense, you can scale up your spending.

Take advantage of automation

I won’t deny it, learning the nuts and bolts of the Google Adwords platform takes a lot of work. But luckily you don’t have to learn everything from day 1.

Adwords offers a couple of campaign types where their algorithms handle most of the heavy lifting. Start with these campaigns:

  • Google Shopping: using the product feed from your store, Adwords will match your product titles & descriptions to the appropriate searches on google.com
  • Dynamic remarketing: show banners(on other websites) that feature specific products to people that have looked at these products on your site but did not buy. If you create a simple template, Adwords will add the details (name, product, price, images,etc.) from your product feed.
Google shopping products on the search results page
Google shopping products on the search results page

One store owner I talked to recently said this about setting up his Shopping campaigns: “I can’t say I feel good about this as it seemed entirely too easy.” But he had in fact done everything right. It just goes to hows how easy these campaigns can be.

Tip: stay away from Adwords Express or Google reps managing your account, that’s too much like putting the fox in the henhouse.

Learn & test

If you start with the campaigns above, you’ll have to worry a lot less about things like keywords and match types compared to Search campaigns.

But do make sure you know the basics, here are some good places to start:

You don’t have to spend any money to open up an account, only to start showing your ads. So when you’re reading a guide or blog post, try to replicate it straight away in Adwords.

Make sure you can track what happens to visitors on your store: what pages they visit, what they buy and how much they spend. That way you can make tweaks to your campaigns based on those results.

If you’ve got the basics down it’s time to level up and go head to head with other stores on Adwords. Some of these will be big companies that are pretty sophisticated about their ad campaigns. This means you’ll have to do your own testing to see what works best: which ads get the best click through, how you can improve quality scores, which match types get you the best ROI, how you can use ad extensions, etc.

In summary, if you’re on Adwords and shouldn’t be, you’ll pay for it. If you’re sloppy or clueless about your campaign setup, you’ll pay for it. But if you’re willing to learn and get smart about testing, Adwords can still offer you a lot of potential.

If you’re interested in learning more about how to optimize your campaigns once they are up and running, have a look at this free ebook and get an insider’s look at the exact strategies we use to generate e-commerce sales with Google Adwords.

About the author

Dennis

Dennis is the main guy behind Store Growers. He's never had a job that he didn't invent himself and loves that freedom.
In writing articles, creating courses or working with ecommerce clients he has one goal: to create more freedom for online store owners.

10 responses to “3 Facts That Google Doesn’t Want You to Know About Using Adwords for Your Online Store

  1. I had one realization after reading this post, that is, it’s very important to do a research first about the strategies and other application you used for your brand’s campaign. Adwords can help online marketers somehow but I agree that you have to think about its negative effect for business too. This post of yours is an eye-opener. Thanks for sharing it and making us all aware of it.

    1. Glad you enjoyed the post Damon!

      You are right, if you’re clueless about this and you start advertising , you are likely to waste a lot of money and get really frustrated.

  2. You are spot on about google ads regarding keywords – we were surprised to find the keywords potential customers use to find our site is vastly different set from what we use in the google ads.

    1. Thanks for taking the time to comment!

      Even if you’ve done a good job with your keyword research, it’s only after you launch your campaigns that you see which keywords are out there and what the actual traffic volume on them is.

  3. Great article. You shouldn’t just start straight off with adwords. Use Google Analytics first with the Webmasters tools to understand how your website is being used. Then you can see the search terms people are using to access your site. Take those keywords and put together a small campaign and go from there. If you don’t have much spend, ensure you go for a the exact match or phrase match option. The broad match option can suck dry your funds on misclicks.

    1. Thanks a lot James!

      I like your approach a lot, starting small and really focused with match types and slowly expanding when you see that things are working.

  4. Dennis – I only just found this article today in a search for a related query. You offer a very valuable perspective. IMHO, Adwords is one platform that works best with very deep research before and while spending money on advertising.

    I do find that Google’s new assistance to help AdWords managers better understand shifts in ad performance via the Report Editor is a nice step forward. How is your experience with it?

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