How Do Google Ads Work?
First and foremost, let’s go over how the platform actually works. That way you can not only understand what Google Ads are, and how the marketing channel works, but it helps to give you a deeper understanding of why and how Google Ads can be worth the investment.
In essence, the principle of Google Ads is very simple: you will be paying Google to display your advertisement on their search results. To do this, you select the keywords that best relate to your business and you bid on them, like an auction, depending on how much money you’re willing to spend per click.
Keywords are essentially the searches that users make, and if you manage to bid enough, your ad has a chance of being displayed at the top of Google’s search results page, where a searcher might click on it. The beauty of pay-per-click (PPC) is that you pay only when a searcher clicks on the ad.
If no one clicks on your ads, you won’t be charged anything. So, in a way, it’s easier to control how much you spend thanks to the way PPC works. Finally, Google Ads aren’t limited to just the adverts on Google’s results; in fact, your ads can appear on YouTube, other websites, Google Play, Google Maps, Google Shopping, and so on.
Do Google Ads Actually Work?
Yes, absolutely! If you know what you’re doing, you can definitely boost your income stream thanks to the effective use of Google Ads. For example, take a look at this search results page:
There are 4 paid ads at the top of the page, pushing down the rest of the results by 4 positions! That’s a lot of SERP (search engine results page) real estate taken up. In other words, this means that the ads are the first things that users see when performing this search.
Whether they click on them, however, is another matter entirely.
Are Google Ads Effective?
For Google Ads to be effective, people need to click on your advert and that will depend on many factors, including how much you’re bidding on your keywords, how many keywords you’re bidding on, your headlines, etc. However, let’s say that you’re following all of the Google Ads best practices and you’ve done everything right; what can you expect in terms of traffic?
Let’s illustrate this by way of example. Let’s take this search for best Google Ads agency for instance:
Zefr is a data-solutions company that offers software that helps you with targeting and optimization on Google Ads. Now, let’s take a look at the amount of paid traffic they receive (data courtesy of Semrush):
While their costs are prohibitive for any small business (it’s costing them over $3 million a month to achieve this sort of traffic!), it probably translates to a crazy amount of revenue for them. After all, according to the data we’re looking at, Zefr is receiving around 18,000 users every month—and that’s just in the US. And that’s not even their best month.
And since Zefr sells software, the generated revenue for them must be amazing.
Pros and Cons of Google Ads
So, now that we’ve finally explained a little bit about Google Ads, we now need to take a deep dive into the question: “is Google Ads worth the money?“
To do that, we’re going to be looking at the benefits of Google Ads as well as the drawbacks. That way you’ll have a complete view of whether you should consider paying for Google Ads.
Pro #1: Quicker than SEO
One of the biggest advantages of using Google Ads (and paid advertising in general) is that you’ll be able to see results almost instantly. In fact, sometimes we have seen people receive traffic from Google Ads on the very same day that we ran the campaign.
After going through the process of creating an effective ad (that is, selecting your keywords, setting your budget, creating your ad copy, etc.), you could potentially get results within minutes. This is contrary to other methods of driving traffic to your website, especially organic methods like SEO.
This is because SEO takes many, many months to finally reap the fruits of your labor. This makes Google Ads a good option for brand new businesses that want to get a foothold in the industry. However, don’t neglect SEO at the same time: it’s crucial for your long-term growth!
Pro #2: Targeting Users at the Purchase Stage
The real power of Google Ads comes from the fantastic targeting capabilities that it affords marketers. In fact, it can be particularly powerful thanks to the targeting options available. However, it’s most powerful when targeting searchers who are already committed to making a purchase.
Think of it like this: imagine you’re in the market for new running shoes because you’re competing in a fitness competition pretty soon. You go on Google and type in “buy running shoes online”, or something of the sort, and at the top of the SERPs you see ads targeted towards you. There’s a chance that you might click on that ad and make a purchase.
This is exactly the kind of power that Google Ads can give you.
Pro #3: Perfectly Target Your Niche & Locality
Since we’re on the subject of targeting options, let’s see how truly powerful targeting can be. Google Ads allows you the capability to target users based on a variety of characteristics, including the following:
- Location
- Age range
- Gender
- Parental status
- Household income (not always available)
- Interests
- Habits
- Web searches
This gives you a lot of options allowing you to really refine your advertising efforts and thus being able to target your niche without showing your ads to uninterested searchers. In essence, this allows you to boost conversions and minimize ad spend as much as possible. At the same time, these options allow you to really hone in to local searchers.
In other words, if you have a local business, you can use Google Ads to target only users that live in the vicinity of your business. Moreover, Google Ads offers extra features such as location and call extensions. These allow both your address and your phone number to be displayed on the advert!
Pro #4: Budgetary Control
Yes, Google Ads costs money (and sometimes a lot of it, as we’ve seen above). However, there are many options available to control how much you’re spending on the platform per month. Firstly, as we’ve seen, you only pay when someone clicks on your ads, so you won’t be charged when users simply see them.
Secondly, there’s always the option of pulling the plug on your paid ads in case you’re cutting costs or you simply can’t afford them for a while. There’s no penalties for pausing or even stopping your ads, and you can always pick up where you left off.
Finally, Google provides a number of parameters that limit how much money you spend: for instance, you can set the maximum bid for each keyword you’re advertising on, which means that you won’t spend more money on a click than the limit you’ve set.
Moreover, you can also set a daily budget; in other words, you can cap how much money you spend every day over the course of a month. While the costs of paid advertising fluctuate every day, with this option you won’t exceed the budget you’ve set for the entire month no matter how much the costs rise.
Pro #5: Many Traffic Opportunities
As we’ve seen before, Google Ads can potentially give you a lot of traffic if you play your cards right. And by playing your cards right we mean making the right PPC choices and optimizations to bring in more traffic to your business.
For example, if you want to increase your traffic, you could simply increase the number of keywords you bid on. Otherwise, if you found a keyword that brings you a decent amount of traffic, you could increase how much you bid on it in order to increase your ranking and bring in more traffic that way.
Lastly, we have to mention that Google remains as the king of search engines, accounting for over 90% of the global search engine market share, according to statistics by Semrush. Moreover, the same statistics say that there are almost 6 million searches on Google per minute. Think of the traffic potential there.
Pro #6: Several Available Formats
Speaking of which, Google Ads doesn’t only mean targeting users on the search engine’s results; no, there are so many types of Google Ads campaigns (ad categories), that you can target searchers and users in many different places, giving you a lot of available avenues from you can potentially gain traffic.
We have already seen a little, there is the option to advertise your product with shopping ads, video ads, app ads, etc. It really depends on the type of business you have and the products you offer, but you have many kinds of ads available to you.
Moreover, there are also a large number of features that Google offers in order to make your paid ads much more clickable, including things like social proofing, location targeting, sitelinks, and other forms of ad extensions. Honestly, the possibilities are nearly endless.
Pro #7: Monitoring Your Performance
Other from the powerful targeting options you’re given, Google Ads also provides a plethora of tracking data and analytics options so that you can check on the performance of your advertising efforts, and even optimize your paid ads in order to improve on them and potentially gain more traffic.
In fact, the platform will tell you a number of things related to the performance of your ads, including click-through rate (CTR), keyword search volume, Quality Score, and ad rank. Not only that, but Google also gives you recommendations on how to improve thanks to their Quality Score metric.
Other than the metrics that Google Ads itself provides you with, you can link your Google Ads account with Google Analytics for even more data. Google Analytics is a free and powerful tool that provides a lot of data and analytics, including what devices they use when clicking on your ads, where they are from, what they do on your site, etc.
All these stats can really help in improving your ads, possibly positively affecting their performance.
Pro #8: Hit the Competition Where It Hurts
If you’ve ever wondered why you should invest in Google Ads at all, then aside from the other benefits we’ve seen above, there’s also the very simple answer: because your competition is already investing in Google Ads.
Not only do you need to invest in Google Ads if you hope to compete online, but if you do so, you have a better chance of beating your competition. For example, if your competition has been investing in their SEO for way longer than you have, then you hardly stand a chance of competing with them organically. However, with a little PPC magic, you could potentially steal some of their traffic by ranking at the top with your ads.
Moreover, it’s simply easier to compete with PPC because there are way less factors involved: is your competitors’ ads higher than yours? Then increase your maximum bid to outrank them.
Moreover, another way of outranking the competition is by delivering higher quality and more relevant ads to the user. If your competitors’ ads are pretty shabby in comparison with yours, then you can easily beat them by offering a better user experience with better ads. This also reduces the cost of your ads at the same time, so it’s a win-win!
Con #1: Google Ads Is Actually Pretty Complex
The first downside we have to look at is the most obvious one: Google Ads is not an easy tool to learn. Firstly, if you’re completely new to marketing, you have to learn about all of the relevant marketing concepts that matter in PPC. Then you have to learn how to actually use the tool.
This means understanding how bidding works, what keyword match types are, the differences between all of the Google Ad campaigns, and other aspects of the platform. Not only that, but you also have to learn how to create effective ads and landing pages to complement your paid advertising efforts.
Finally, there’s also the matter of finding the right keywords, learning how to target the right audience, etc. All of these things could mean that you’re essentially blowing away cash and wasting time trying to learn the tool with no tangible results to show for it.
Con #2: Google Ads Can Be Expensive
Probably the biggest downside of using Google Ads is that it ends up costing a lot of money. Depending on your niche, you could be looking at spending anywhere between $1–$3 per click, and some industries require higher costs per click in order to be able to simply compete.
Moreover, as time passes by, Google Ads are becoming ever more expensive thanks to the fact that new businesses open up every day, and there are more people than ever bidding on keywords. This means that costs are simply soaring due to the increased competition, meaning that you need an even bigger budget to compete in PPC than you did a few years ago.
Remember as well that Google Ads require money to work: if you stop paying Google to display your ads, then your PPC has effectively been stopped dead in its tracks. In other words, paid advertising can prove to be a constant drain on your resources.
Con #3: Google Ads Take a Lot of Time
Not only can Google Ads prove to be costly in the long run, but the strategy also takes a lot of time (much like any other marketing strategy, of course). Despite Google’s best efforts to automate as many processes as possible, there is still the necessity to invest a lot of time into your paid advertising.
There’s the matter of researching the right keywords, creating landing pages, monitoring your ads’ performance, analyzing your audience’s preferences, possibly revising strategies, etc. In other words, you can’t just set up an ad campaign, sit back, and watch the money flow in. There are a lot of necessary processes involved in order to get the best out of your ads.
Of course, it’s only natural that you need to spend so much time optimizing, tracking keywords, etc. It’s the same thing with any other form of marketing. But it’s good to be aware of it in case you’re thinking of doing your own PPC.
Con #4: There’s More to PPC Than Just Ads
Unfortunately, a lot of people think that Google Ads, and pay-per-click marketing in general, involves only bidding on the platform and making subtle changes to the way the adverts are displayed to users, like changing headlines, etc. But in reality, there is so much more to it than that.
In fact, we’ve seen that it requires careful keyword research, performance tracking, analytics, and many other facets in order to simply serve up the right ads to the right audience, and thus minimize ad spend as much as possible. However, it doesn’t stop there.
Remember that a user clicking on your ad is only one step of the process. Once a user clicks on your ad, they need to be convinced by your landing page in order to actually convert. Therefore, there’s also the fact that you need to design an attractive, professional, and persuasive landing page in order to get users to convert.
If your landing page is sub-par, then your ads will also be impacted due to a decrease in quality score.
Con #5: Lower CTR Than SEO
Finally, there’s also the sad reality that PPC simply doesn’t attract as many clicks as other marketing channels, like SEO. According to a study conducted by SparkToro in 2019, PPC clicks only account for about 4.42% of searches. That’s tiny compared to the 45.25% of clicks going to organic results (the rest of the searches result in 0 clicks).
That means that while PPC is more instantaneous than SEO, PPC won’t see as many returns as SEO in the long run. Moreover, even if your PPC campaign is bringing in a lot of traffic, eventually users might get tired of seeing your brand pop up on ads, and will look elsewhere for services.
So, Are Google Ads Worth the Money?
To conclude, let’s sum everything up and finally answer the question, “is it worth buying Google Ads?” Of course, we’re naturally a little biased here as not only is PPC our passion, but it’s also our business. However, we feel that we can still give you as objective an answer as possible.
After all we have seen, we can easily conclude that Google Ads can definitely be worth it for businesses of all sizes, ranging from freelancers to large enterprises. As we’ve seen above, the pros outnumber the cons, which is already a good sign. And the benefits you receive from using the platform can really give you an edge when competing with other businesses.
The fact that you can see almost instant results means that you can get your business off the ground relatively quickly! Furthermore, the targeting options that Google Ads provides you with means that you can easily carve out your niche, saving you money and almost guaranteeing your traffic.
Finally, the parameters to control your ad spend, as well as the data you’re given about the performance of your ads, means that using Google Ads gives you a lot of control on how your budget is being spent as well as a lot of information on how you can potentially improve your overall PPC.
Are Google Ads Worth It for Small Businesses?
If you’re a small business, then you’re naturally going to be very attentive to your expenses and you’re going to want to reduce as many costs as possible in order to get your business faster to profitability. So, it’s no wonder that so many people ask, “are Google Ads worth it for a small business?“
We think that, despite the cost of bidding on keywords, Google Ads can really be worth it for small business ventures. This is because they provide a quick way of entering the competition without having to invest a whole lot of money.
Moreover, with the extensive targeting options available to you, you can really zero in on searches that are related to your locality and niche by focusing on long-tail keywords (in other words, keywords that don’t receive a lot of monthly searches). That way, you don’t need to compete with big brands and you can keep your costs down.
FAQs
Is Google Ads really profitable?
If you use Google Ads following all of the best practices, then you’re bound to eventually make a profit as for the amount you spend, you’ll be making more money thanks to the traffic you’ll be generating. However, bear in mind that just because you use PPC, your success isn’t guaranteed and a lot of work still needs to go into your paid advertising in order to ensure profitability.
Are Google Ads a good investment?
Yes, absolutely. Google Ads can be an easy way to start bringing in traffic to your online business, especially if you’re still new in the game. Moreover, thanks to the many features offered by Google, you can really refine your ads to only target relevant audiences as well as control how much money you’re spending on paid ads.
What is the success rate of Google Ads?
The success rate of Google Ads is different depending on your industry and what form of paid ads you use. For instance, a survey conducted by Databox discovered that search ads have a much higher conversion rate than display ads (the ads you see on websites). Moreover, according to the same survey, the average conversion rate for search ads, which is the most popular form of Google Ads, is 4.2%.
Why am I not getting sales from Google Ads?
If you’re having problems generating sales from your paid ad campaigns, even despite receiving clicks, it might be because you’re not leveraging the targeting options enough. Make sure to really refine your targeting so that your ads only reach people that are interested in your product or service and are willing to convert.
How long does Google Ads take to be profitable?
While you can sometimes receive traffic on the very same day that you launch an ad, it doesn’t mean that you’ll be generating a lot of leads in the first few weeks of your ad campaign. In fact, it takes about 3 months for an ad campaign to really pick up the pace and become profitable. Then it takes at least another 4 – 12 months in order for the campaign to perform as well as it should.
Why are Google Ads so expensive?
The cost of Google Ads depends largely on the industry you’re operating in and the number of competitors there are jostling among each other to get to the top of the SERPs. So, the tougher the competition, the more expensive the keywords you bid on are likely to be.
Are Google Ads worth it for YouTube?
If your business depends on YouTube in order to grow and thrive, then using Google Ads to market your channel can be an effective strategy to see increased growth. You can also consider using YouTube Ads for that very same aim.
