The Real Reason Your Search Ads Aren't Profitable

The answer is pretty obvious. Your campaigns cost too much for the revenue they are bring in.  

It might seem like a cop-out answer, but it contains useful insight.  

Making Google Ads work, is all about controlling cost.  

And that starts by not wasting any money.  

You might not be aware of it, but Google has optimized its own system to extract as much profit as possible from unaware advertisers.  

These are things like default options, new features, and more automation that instantly put you on the track towards unprofitability.

Like this one:

The screenshot shows how advertisers can improve their "Optimization Score" by 5%. A small detail Google forgets to mention that clicking "Apply all" this campaign switches to a bid strategy that would absolutely tank this campaign.

People have been calling Google out on this BS for years. But they continue their shady practices and advertisers keep getting screwed by them.  

And it is not just the small advertisers. Advertisers that spend $10k/mo and up are also making these exact same mistakes.  

Across Google Ads accounts, I’ve consistently found that 10-25% of the ad budget is being wasted.  

So if you want to control cost, that’s the number one thing you need to handle ASAP!  

Once you’ve got that sorted, the return of your campaigns should already be a little bit better.  

At that point, the main thing that’s driving up costs is your competitors.  

While things like Shopping and YouTube Ads are pretty recent additions to the Google Ads platform, Search Ads have been in place from the start.  

That‘s already 20 years ago, which means that some advertisers have gotten really good at it.  

So how can you compete effectively against that? Even if you are new at it?

How To Compete Against 20 Years of Experience

The first step is to learn a lot more about how every piece of Google Ads works.  

And if you start searching around, you’ll find plenty of advice and tips.  

But most of the articles and videos you find stay right on the surface.  

Google’s whole certification program isn’t any different. It’s interesting to go through it, you can learn how to set up the first campaign, how to activate feature X or where to find a certain report. 

But where that program and most other materials are lacking is in telling you what to do when all of those basics have been taken care of.  

Because Google’s main advice at that point is to encourage you to increase your cost per click or budget. 

But if you’re losing money with every click, it’s pretty simple what will happen.  

It might take a few months to finally pull the plug, but eventually, you’re going to stop advertising.  

Or maybe you’ll keep your campaigns going for a couple of dollars a day. Because it's cheap enough and “it can’t hurt, right?”.  

But at that point, it is clear that Google Search Ads aren’t going to translate into a sales channel you can rely on and bank on.  

Instead of having a steady stream of customers and revenue that you can use to build the rest of your business, you’ll have to look at some other channels to find traffic and sales.  

But some ecommerce businesses do see results from Google Search Ads.  

So, is there some kind of underlying approach that these advertisers use to bring in enough sales for what they spend? And how did they get there?

The $10M Google Ads Playbook 

It’s been about 12 years since I first heard of something called Google Adwords.  

A friend asked whether I could create some ads for his software tool. He asked me because I’d studied marketing so he figured I must know a little bit more about it than he did.  

In reality, I didn’t. But I managed to set up campaigns, get some clicks to his website, and get him a bill of around $400.  

He didn’t sell any extra software because of it. And I’m pretty sure I made every mistake in the book. But he was happy with the website visitors, I was happy to get some experience. (And I’m sure Google was happy as well!)  

A couple of years later I was working as a marketing consultant, and one time a client asked me whether I could help them out with their Search Ads campaigns.  

Not wanting to admit I didn’t really know what I was doing (and not mentioning my earlier attempts), I said: “Sure, I’ll have a look”.  

When I opened up their ad account for the first time, I was pretty excited, but also a little terrified.  

Here was this big company that was spending thousands of $ on ads every month, and sometimes even paying a couple of dollars per click (I thought they were crazy for wasting so much money at the time).  

And they wanted me to help out.  

It was obvious I was in a little over my head.  

So I started reading books, attending conferences, got my Google Ads certification, and even managed to get myself invited to the Google office in Brussels for advanced training.  

And those things helped.  

Step by step, I was now able to look at that same client’s account, understand what was going on, and even make some changes that improved the results.  

But I was far from confident.  

That only came after doing the work.  

In the 8 years that followed, I worked with hundreds of different ecommerce businesses all around the world. All selling different products in different markets with different economics.  

And over time, most of the campaigns I managed did ok, some did REALLY well, and a few absolutely failed.  

If you have a client that is trusting you with their hard-earned profits and you fail to generate enough in sales to cover the cost of the product, things can get pretty stressful.  

So every time that happened, I tried to get to the bottom of it. Why did this happen? What could be some alternative approaches I could try in the future?

And bit by bit, I started improving my process, something that continued to this day.

That process enables me to know exactly what to do in each stage of a campaign, what tactics to try, and which metrics to focus on.

The goal of this story is to tell you that you’re not going to become a Google Ads expert overnight, nor should you.  

There are no secret strategies, weird settings, or clever hacks that allow you to instantly go from 0 to insane profits.  

But if you have the right input, do the work and be patient, you can get great results.  

While I can’t help you with the patience part, I can help you by providing the right inputs.  

So what you are about to see is all of that knowledge and experience distilled to its essence. 

I break down what you need to know about Google Search Ads in a way that I’ve tested to be easy to understand and apply to your own campaigns.