Why SMBs Should Not Run AdWords Accounts
The headline may seem like click bait, but rest assured, I fully believe this statement. I’m writing this post because for years, AdWords’ marketing has simplified the management process and claimed that businesses of any size can participate. Though this messaging has tailed off as of late, small businesses are still at a severe disadvantage when trying to run AdWords accounts.
Before everyone gets up in arms about my statement, I want to clarify a few items. First off, I consider an SMB account to be one which spends no more than $500 in ad spend per month in Google. Even with the most precise settings and the best account management, $500 does not go far in the ever-competitive landscape of Google.
Secondly, if a company is spending no more than $500 on ad spend, how much of an extra budget is realistically going toward someone or an agency to manage the account? Even for a freelancer, I would say a conservative amount to charge is $75 an hour, however, I often find that number closer to $125. So let’s say the management charge is $75. For 3 hours of work, the cost comes to $225. In this case, the total AdWords investment between ad spend and management is $725. Just over 31% of this investment is going to management.
On the flip side, if the company determines that the management fee is better allocated toward ad budget, it means someone in house is running the account. Generally, this person is managing the account as only one of his/her responsibilities. Ad spend may be greater, but the account is run by someone that doesn’t specialize in paid search full time. Most of the time, that someone is the business owner, who already has a full plate of tasks.
Finally, a big piece of the puzzle is the website. With so little budget, how much effort is being put into the website to improve conversion rate? Even if the goal is a phone call or foot traffic to a store, the website still needs to effectively convey the message.
Whereas running the AdWords account may have once been considered part of someone’s job, it now requires full-time attention, which leads to an inevitable point – if you aren’t going to do it right, don’t do it at all.
AdWords Is Difficult
AdWords has never been as simple as choosing which keywords to bid on and writing related copy, yet, this is the impression that SMBs are given. Over the years, I’ve reviewed many accounts that contained one campaign with one ad group consisting of a few broad match keywords and one generic ad leading to the homepage. It’s no wonder that the associated poor performance has turned these SMBs off to AdWords.
It starts from the beginning. If proper segmentation and settings aren’t addressed correctly, one can’t expect to utilize the full compliment of AdWords features. Like anything else, AdWords needs a solid foundation to be able to show effective results and long-term growth. The notion that an account can be setup quickly with little research is both false and degrades the process.
Think about this premise from the standpoint of a hardware store where most customers live within 20 miles of the physical location. The owner’s goal may be to encourage more foot traffic to the store. The owner may have an idea for potential keywords, but is he going to know how to:
- Segment campaigns and ad groups accordingly?
- Understand user search intent and utilize keywords in the appropriate match type(s)?
- Implement negative keywords to remove unqualified traffic?
- Write ads that match user search queries and contain a call to action?
- Geo-target so ads are only showing in the correct location?
- Determine correct landing pages?
These questions don’t even take into account how performance will be judged. How will the owner tie AdWords clicks to store visits? This question is hard enough for companies spending millions in AdWords, let alone an SMB.
The bottom line is that the deck is stacked against SMBs. There may be intermittent wins, but over time SMBs will lose money and become frustrated with AdWords. It’s too big of a business to spend little and/or not have proper management. AdWords requires a dedication that SMBs can rarely give.
What Should SMBs Do?
Even though AdWords may not be the right option, there are other platforms that require less time and effort while being more cost effective. Chief among these platforms is Facebook.
Generally, most SMBs already have a Facebook page setup for their business. They may not be posting frequently or actively following the pages’ activity, but the presence is there. And that’s all you need with Facebook. SMBs can boost posts and/or create simple ads that drive awareness and engagement (likes, comments, and shares).
Facebook Ads allow SMBs the granular targeting they need without having to worry about in-depth segmentation. Using our hardware store example, the owner can show ads in a specific area while showing any combination of ads to people who:
- Like the company page
- Encompass specific demographics
- Show applicable interests
- Meet other criteria
From a cost perspective, the owner can set a budget and allow Facebook to control bidding. Unlike Google, SMBs can see a fair amount of activity on a limited budget.
It may sound counter-intuitive to actually do less work, but for an SMB that is strapped on time and wants to advertise on a limited budget, Facebook is an ideal solution. Less management and optimization is needed for Facebook and the targeting tends to be more granular than Google. The caveat is that the foundation needs to be created accordingly. Just like Google, appropriate research and planning should be conducted before going live. Overall, Facebook Ads require less effort and can better help SMBs achieve their goals.
In fact, it behooves SMBs to test additional paid search channels such as Pinterest and Instagram (which can now be managed through Facebook). Again, these channels are more self-contained and don’t necessarily require users to go to external websites to drive action.
If SMBs do want to go the traditional paid search route, Bing Ads is a good alternative. The effort is on par with AdWords, however, traffic tends to be less expensive and management isn’t as rigorous. Additionally, Microsoft sites now account for just over 21% of search engine share. The traffic won’t be as substantial, but the platform is more cost-effective for SMBs.
I understand that telling SMBs not to run AdWords accounts is a bold statement, and perhaps taking this action in the past would have been unrealistic. Costs were lower and management wasn’t as involved. However, due to the complexity of AdWords today, SMBs don’t have the resources to consistently succeed. There are alternatives that provide granular targeting to better meet SMBs’ needs.