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The declining profitability of Google Adwords

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Re: The declining profitability of Google Adwords

#11

Post by y0z »

wwwong wrote: post #8
jmotion wrote: post #3

I spent $100,000 last year on Google AdWords - it made me some decent money. The costs kept getting higher and higher - I called one of there advertising rep's to give me advice - it cost me around $600 losses in 1 day. Called back, made changes - told them I don't want to take 'risks' like that again. I then tried this 'Enhanced Campaign' feature that I think they're bringing in across all accounts in June - it put…

I've been doing SEM for five years and worked with the full range of google reps. Quite simply, don't ask reps for advice on a product they've never actually used (as in, with real money). You're better off investing in a proven SEM expert in your field. Also, the answers/responses from Google reps are basically read from a training manual.

I concur with the above whole heartedly.

SEM Specialists and the tools that they use make your money work very hard - as much as your website will allow it to that is.

Re: The declining profitability of Google Adwords

#12

Post by antr »

I don't believe this post tells the entire story. Adwords (advertising in general) is just one part of doing business in general. Other reasons that might explain the trends showcased:

- Businesses have cycles, maybe the author is experiencing the end of his software's business/product cycle. An 8 year period is considered by many an economic cycle. I certainly don't use the same software today as I did 8 years ago.

- During the past 8 years the business of software has completely changed: distribution, barriers to entry, platform (desktop/web/mobile), etc.

- Profitable businesses tend, over time, with no meaningful reinvestment, r&d, etc, produce marginal profits equal to zero.

- What are the software alternatives to the author's product/service? 8 years ago Encarta was "the" digital encyclopaedia, today it's Wikipedia.

- Adwords 8 years ago was a nascent ad platform, resulting in low cost due to low competing bids, today it's "the" most popular online ad platform.

These are just a few reasons behind these trends. Any other thoughts?

Re: The declining profitability of Google Adwords

#13

Post by Systemic33 »

I'm actually quite impressed that people earn money from these advertisements. I have never clicked one of the adverts, unless it was the top result on a Google search for the thing I was actually looking for. It's like a natural instinct to ignore the ads.

With the rise of addons like AdBlock Plus, I think it's inevitable that this Ad-venture (pun intended :P) will decline, and cease to work, until a new medium or method emerges(Social networks, website-product-placement, etc)

Re: The declining profitability of Google Adwords

#14

Post by jyothi »

pknight wrote: post #9

What are the best alternatives to Google Adwords in terms of paid advertising?

there is no best alternative as Google owns more than 80% of overall market. If you want scale you cannot ignore Google - hence the monopoly and inflation of bid rates.

the next best alternative which can bring 1/4th of google adwords traffic are bing adcenter, retargeting companies like adroll, vizury. Facebook & Linked Ads work for specific domains.

Re: The declining profitability of Google Adwords

#15

Post by beambot »

First, this has nothing to do with Google's profitability re:Adwords (the title was a bit misleading).

Rather, it seems like an efficient supply-demand market is converging to a price point that renders his ROI to neutral-or-negative. I guess that indicates that the rest of the world is catching up in SEM... and it's time to search for alternative marketing channels. This should come as no surprise -- golden geese don't live forever.

Re: The declining profitability of Google Adwords

#16

Post by digitalengineer »

wwwong wrote: post #8
jmotion wrote: post #3

I spent $100,000 last year on Google AdWords - it made me some decent money. The costs kept getting higher and higher - I called one of there advertising rep's to give me advice - it cost me around $600 losses in 1 day. Called back, made changes - told them I don't want to take 'risks' like that again. I then tried this 'Enhanced Campaign' feature that I think they're bringing in across all accounts in June - it put…

I've been doing SEM for five years and worked with the full range of google reps. Quite simply, don't ask reps for advice on a product they've never actually used (as in, with real money). You're better off investing in a proven SEM expert in your field. Also, the answers/responses from Google reps are basically read from a training manual.

I've just google'd SEM expert and not hits. Google suggests 'SEO expert'. Could you elaborate about SEM? I'm interested.

Re: The declining profitability of Google Adwords

#17

Post by mrtksn »

Systemic33 wrote: post #13

I'm actually quite impressed that people earn money from these advertisements. I have never clicked one of the adverts, unless it was the top result on a Google search for the thing I was actually looking for. It's like a natural instinct to ignore the ads. With the rise of addons like AdBlock Plus, I think it's inevitable that this Ad-venture (pun intended :P) will decline, and cease to work, until a new medium or m…

you would be also surprised that there are lot's of people using IE.

The fact is, you and probably most of the people here on HN are the 1%.

ABP has 15 million users on firefox and 10 million on chrome. This is 25 million users worldwide, so out of a total 2.4 billion internet users ABP users are about 1% of the world population.

the rest, 99% of the internet users are people who see ads. probably some of them also never clicked an ad but since the advertisement industry is a huge one, it is safe to assume that it works.

Re: The declining profitability of Google Adwords

#18

Post by michaelt »

cjmb wrote: post #7
csdreamer7 wrote: post #6

The title seems misleading to me. I thought Adwords was losing it's profitability to Google.

If the OP's premise is extended to all others in his peer group, I read this as the implied "long-run" outcome. Whether that's true or not is another argument...

If the problem is that he's getting a worse return as people are outbidding him for the best words/placement, it could be the opposite.

Re: The declining profitability of Google Adwords

#19

Post by pioul »

I expect the Adwords ecosystem to auto-regulate itself instead of just deteriorating over time: the more people like you realize they have to pay more for less, the less they'll do so, leading to a decrease in prices until they're acceptable (profitable) again. Supply and demand, like you said.

Re: The declining profitability of Google Adwords

#20

Post by yareally »

digitalengineer wrote: post #16
wwwong wrote: post #8

Earlier quoted context omitted.

I've been doing SEM for five years and worked with the full range of google reps. Quite simply, don't ask reps for advice on a product they've never actually used (as in, with real money). You're better off investing in a proven SEM expert in your field. Also, the answers/responses from Google reps are basically read from a training manual.

I've just google'd SEM expert and not hits. Google suggests 'SEO expert'. Could you elaborate about SEM? I'm interested.

Although I can't give you any exact answer since I'm not an SEM expert, doing a verbatim search[1] will give you better results[2]. Though you might already be aware of how to do that (but even if so, someone else might not and find it useful). I just add it as a custom browser search[3] using the following URL template to do a verbatim search without having to click on options in google search:

https://encrypted.google.com/search?q=%s&sourceid=opera&...

Where %s will be your query.

[1] https://support.google.com/websearch/answer/1734130?hl=en

[2] https://encrypted.google.com/search?safe=off&client=oper...

[3] http://www.makeuseof.com/tag/create-custom-search-engines-go... (for chrome)

[3] https://support.mozilla.org/en-US/questions/780073 (firefox)

[3] http://my.opera.com/community/blog/2009/01/16/custom-searche... (opera)

[3] http://operawiki.info/CustomSearches (some premade searches that add just by clicking, may work on other browsers, but not sure)

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