When it comes to jump-starting your site traffic and growing your business, paid media can be enticing because of its ability to get your company in front of real people searching for products or services like yours. But Google Ads is the most expensive place to advertise on the internet. Anyone who chooses to run a Google Ads campaign for their business should be prepared to pay a high price: At minimum, $5 per-click, and for some keywords $50 or more.
And that’s just for a click (not a lead or conversion).
If we do the conversion math, the actual cost of pay-per-click campaigns gets even more disheartening. If you’re optimistic, you can predict that 10% of your Google Ads traffic will convert (if you’re realistic, less than 4%). If you pay $10 a click–your cost-per-lead comes in at a not-so-tiny $100.
Any business that relies on Google Ads for growth should expect to pay a minimum of $5,000 per campaign. Unfortunately, they should also be prepared not to receive an immediate return on investment.
Yes, a smart, strategic paid media strategy can improve the performance and effectiveness of your Google Ads campaigns. But even then, optimizing search ads with the right targeting, campaign structure, messaging, and bid strategy takes expertise, work, and is by no means an automatic process. Even well-seasoned digital marketing professionals can end up spending thousands of dollars on Google Ads without tangible ROI to show at the end of it.
So for small- to medium-sized businesses, investing a large portion of marketing revenue for such expensive lead generation is not the best way to spend a marketing budget. Still, hundreds of businesses continue to invest tens of thousands of dollars in paid search marketing despite the reality that many of those expensive clicks never turn into real business. Many businesses haven’t even configured their websites to accurately report the conversion rates and performance of their campaigns, and are actually unaware of the true profitability of their marketing.
For many brands, the paid search model alone isn’t the right choice. Investing in SEO, however, is far more cost-effective, and has long-term rewards that far outlast what Google Ads campaigns can produce.
Google Ads Lets you Rent Traffic. SEO Helps you Own It.
The main challenge of relying solely on paid search campaigns for growth is not just in the nuances of ad bidding and quality scores but in the model of pay-per-click.
With paid search marketing, you essentially lease clicks from Google. You can purchase those clicks on your credit card, but as soon as your budget caps out or you stop doing the marketing, those clicks are gone.
We all know it’s better to own rather than rent. When a website occupies a top spot in the SERPs, it gets all that traffic for free and to perpetuity. Although there are a lot of avenues to growth, organic ranking is still King because no other marketing strategy can bring your site as much traffic for so little cost.
Google Will Make Money from your Investment. You Might Not.
Google Ads is a revenue machine. Since the launch of Google Adwords in 2000, Google has managed to increase their revenue every year, even during the Great Recession in 2009.
So although Google Ads recommendations may help you run slightly more effective campaigns, they should be taken with a grain of salt. Ultimately, Google Ads wants to make money, and too often their suggestions directly translate into more money for their platform rather than increased ROI for your business.
Be wary of the recommendations Google Ads provides. Of the Google Ads representatives I’ve worked with in the past, most suggested campaign settings that gave Google more control over campaigns–whether to pay higher rates per click or allow the flexibility to spend more money. Their suggestions don’t always make campaigns more profitable or cost-effective.
In comparison, SEO is really easy to win if you do it correctly. Optimization does require you to have knowledge and understanding of the process, but any business owner can do it right as long as they have the right tools and foundational understanding of Google’s content signals and algorithms.
There are some very effective, higher-priced options to stimulate growth like white-hat, quality link building, but earning press mentions takes a lot of work and time. On-page SEO though is fully within the webmaster’s control, and it is not that expensive.
CPCs are too High to be Profitable. Traffic from Organic Search is Free.
Two decades of Google Ads has been long enough for every industry niche to run ads on Google. At this point, most verticals have fine-tuned their ads and optimized their websites for conversion. It’s a high bar for newcomers. In the most competitive industries, CPCs have become so high that companies are running Adwords campaigns that are unprofitable.
As the former CEO of a ticket reselling app, I bought millions of dollars in search ads in the secondary ticketing market to compete with Stubhub and Vividseats, but we found that our competitors were running unprofitable advertising campaigns just to buy revenue and increase their market share.
Since the valuation of pre-IPO companies is determined as a multiple of revenues and growth rates (not net income or profitability), it’s common to see these companies lose money on their PPC advertising. As a result, competing with them is ill-advised. The more you spend, the more you’ll lose.
Google Ads Requires a Credit Card. SEO Requires Creativity.
It doesn’t require creativity for someone to put their credit card into Google and start bidding on your keywords and increasing your CPCs. Businesses built on Google Ads are not defensible because they will eventually stop generating traffic and leads once their budget runs out.
SEO requires more creativity than pay-per-click marketing because it’s multi-disciplinary. Google’s algorithm is increasingly complex, meaning more opportunities for sites like yours to refine their strategy to capitalize on the content signals that Google bots crawl for.
Other Advertising Channels that are likely to be More Profitable than Google Ads
1. Local SEO
For small businesses, getting your site listed across all business directories and getting local citations is relatively inexpensive (under $100) and can give you a big boost in local search results on Google Maps. Nearly a third of all mobile searches are location based queries, and local SEO can help search engines better understand your location, the markets you serve, and how customers will reach out to you. Local SEO is one of the cheapest growth strategies you should try – from a value for your marketing dollars perspective, it tends to be one of the most efficient.
2. Facebook Advertising
If you still want to pursue paid media, Facebook Advertising has the possibility to reach very large audiences, and I routinely see properly managed Facebook campaigns outperform PPC campaigns. CPMs are 30% cheaper than PPC, and the data Facebook collects from users allows advertisers to tailor campaigns to very specific audiences. Even though the appeal of Google Ads is the relationship to search intent, the affordability of Facebook CPCs is better for small to medium-sized businesses on a stricter budget. In general, I find that it’s easier to create effective Facebook Advertising campaigns than it is on Google.
3. A Good SEO Content Strategy
Targeting low-difficulty long-tail keywords and building optimized landing pages is a fairly low cost way to earn organic rankings for valuable keywords. A good SEO content strategy will go after less-competitive search terms, and will provide useful, valuable content to users to not only satisfy Google’s content-quality signals, but to establish your company as an industry expert and authority. For detailed guidance on how to develop a content strategy that helps increase your keyword rankings, check out my free ebook about on-page optimization.