Google gave small businesses the impression they will succeed if they just use the Google Ads platform. Learn why that may not be so anymore.
Google Ads is not for small businesses anymore.
Increasingly, our agency and many others are seeing the effectiveness of Google Ads waning for new clients spending less than $3,000 per month media.
Just a year ago, we saw businesses with new small accounts (under $3,000/month) averaging a return of advertising spend (ROAS) of 3:1 after the first month of advertising across all verticals.
Why Isn’t Google Ads Working for Small Businesses?
Over the last few years, Google has been slowly but surely changing the game.
Some of these changes have come in the name of privacy.
Some have come in the guise of making the platform easier to manage for less-sophisticated marketers.
But rest assured, Google made the changes to make more money.
Google’s strong-handed attempts to move its customers into automated bidding structures have taken away advertiser’s control.
When the advertiser isn’t in control, the algorithm dictates the cost-per-click.
This forces local advertisers to compete with big-budget national brands automatically inserted into results where they may not even be relevant – just because Google’s ads algorithm thinks a click might result from the placement.
Does Google Think It’s Smarter Than Humans?
For those not involved in day-to-day paid search – the simple fact is that Google has made it harder to optimize your paid search spend.
In typical Google fashion, Ads has become a robot marketing to consumers, looking for patterns amidst many data points they believe constitute an audience’s psyche.
It’s ironic that Google encourages marketers to appeal to humans instead of robots when it comes to SEO.
Google Says “Feed Me”
To make decisions, Google’s robot requires food.
In other words, the Google Ads algorithm can’t make decisions unless it gorges itself on data.
So, for Google to serve ads to the right people at the right time, the slothful robot needs to see data on where the right people are at the right time.
Once Google understands this, the results can be spectacular.
But unfortunately, lately, that point occurs sometime after an advertiser has spent north of $3,000 per month.
Over time a small advertiser should see the benefits of the Google Ads learning algorithm, in theory.
But the reality is changing user behavior, shifting budgets, and changes at Google itself make it, so those small advertisers spending less are more likely to give up before they see the types of results the big boys experience every month.
Most small businesses don’t have six months to a year of spending $3,000/month to see results.
Small accounts that “take a break” also appear to have to start this process all over again.
It’s almost as if once an advertiser stops feeding Google, the advertising algorithm acquires sudden and total amnesia.
Am I Spending Enough to Be Effective?
It’s always tricky to understand how much to spend on Google Ads.
It’s harder to know if you can afford to pay enough to get results.