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The declining profitability of Google Adwords

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Re: The declining profitability of Google Adwords

#41

Post by marcofloriano »

NKCSS wrote: post #37
bobsy wrote: post #26

Seems like the article is only showing half the story. Costs are going up which means increased competition. Increased competition will mean your ads are running against more competitors. Reason for fall in click-throughs could be under-optimized ad's losing out to competition's ads. As for conversions. Looking at the table plan site I feel overwhelmed. If this is where the ad's are taking users I think it is fairly…

I agree; the site for the software looks terribly out of date, which in turn doesn't instill confidence in potential customers. Updating the site would be his best investment.

"Updating the site would be his best investment."

Makes sense. Take a look at one of his directly competitors.

http://weddingtableplans.com/

Re: The declining profitability of Google Adwords

#42

Post by robryan »

kybernetyk wrote: post #39
robryan wrote: post #10

It is hard to split out the effects that are leading to a tougher Adwords market in general and this particular campaign. One thing we have noticed about Adwords is that longer campaigns are being ran as essentially residual income with maintenance the more they decline. Thing like bids, keywords, ad text can progressively put you in a worse place than the competition left unchecked. I addition over the years we are…

> People are used to the instant gratification from a web app Which people? The 1% inside the tech bubble? Outside of the tech bubble people still download stuff. And smart phones like Android and iPhone with their downloadable apps don't really condition people to use web apps. If you want to make bold statements about the software market take a look at the people outside of your tech savvy peer group.

I guess we will have to agree to disagree. Here is a good article on the web app vs downloadable: http://www.kalzumeus.com/2009/09/05/desktop-aps-versus-web-a...

I don't have an stats but from watching regular people use computers I absolutely believe that people are much more willing to give something a go if it involves clicking a button on a web page rather then downloads and installers etc.

Re: The declining profitability of Google Adwords

#43

Post by wslh »

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 followed the same route:

Starting with Adwords on 2003 it aligned well with my business as a complement to SEO. I could test different keywords and it worked. Nobody beats AdWords at the audience and self service system.

But then, we started to see keywords at $ 2, $ 5, $ 10 ... wow, for just one click! At the end we stopped all our campaigns and spend our promotional resources to our blog. And our blog, scientifically, have a better ROI.

I would add that now AdWords is more difficult to administrate than Windows Advanced Server with Exchange.

Re: The declining profitability of Google Adwords

#44

Post by 1123581321 »

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…

All Adblock does is guarantee that the user won't cost the advertiser any money because the ad is not shown ergo can of be clicked. Google ads are pay-per-click. Adblock does not affect the conversion rate of the people who don't use AdBlock. AdBlock does make it more difficult to reach markets that use AdBlock disproportionately, but those markets don't like advertising anyway, so the difference in reach caused by AdBlock is only a percentage of the user count for the market being measured.

P.S. If you clicked on an ad because it was what you were looking for, then you did exactly what the advertiser wanted you to do. That's the whole idea behind PPC, and why that top spot is such a good one.

Re: The declining profitability of Google Adwords

#45

Post by yesplorer »

I used to be wonder if anyone really made any sales on those ads because even as less savvy as i was with internet, I could readily identify 'ads by Google' and not click them. Honestly, sometimes I could just look at the website and type the address in a new tab instead of clicking on the ad( because I wasn't going to make a purchase anyway so why make them pay for my visit?)

But then I observed first-hand how people I thought should know better were clicking on these ads unknowingly thinking it was part of natural search results. So here's what I'm thinking; it could be because there as more and more people get online, there's going to be more and more people clicking on ads unknowingly thinking it's part of their natural search results, which will consequently result in increase in CPC .

But what irks me from the post is: > not showing your ad at all if you bid too low – even if no other ads appear If this is true then it's really evil!!

Re: The declining profitability of Google Adwords

#46

Post by BenoitEssiambre »

beambot wrote: post #15

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 do…

Exactly, it could actually show an increasing profitability of Adwords overall but skewed towards products that are best suited to this kind of ad thus pricing others out of the system.

Re: The declining profitability of Google Adwords

#47

Post by jaredmck »

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…

Never listen to your Adwords reps - they're usually extremely uninformed about anything except the Google party line.

Re: The declining profitability of Google Adwords

#48

Post by gingerlime »

This resonates with me pretty well, even though I don't have such long experience. However, my wife has a small website selling vintage items to Japanese customers, so we have some experience with online advertising over the last couple of years.

Apparently, Google isn't as strong in Japan as Yahoo. At least for the demography that reaches my wife's website over the last couple of years. We see this quite clearly on (organic) site visits.

Given this, I would assume that advertising on Google would be cheaper than Yahoo Ads in Japan. However, it's not the case. Google adwords are far more expensive and deliver far worse results for the same campaigns. Maybe competition in this niche is not well informed/stupid and uses Adwords more than Yahoo, which drives the price up, but to me it doesn't make sense. If Yahoo gives better bang for the buck (and it does!), then advertisers would naturally shift there, which would raise the Yahoo price, and reduce Google's. However, that does not seem to be the case. It feels like Google is somehow inflating the prices not completely in line with supply/demand.

Re: The declining profitability of Google Adwords

#49

Post by daniluk »

wslh wrote: post #43
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 followed the same route: Starting with Adwords on 2003 it aligned well with my business as a complement to SEO. I could test different keywords and it worked. Nobody beats AdWords at the audience and self service system. But then, we started to see keywords at $ 2, $ 5, $ 10 ... wow, for just one click! At the end we stopped all our campaigns and spend our promotional resources to our blog. And our blog, scientific…

Of course, AdWords can be quite difficult. But if you are doing it right you can see positive ROI. I have been managing a few account which had trouble doing that. But it really depends on your strategy. Want to play safe? 1. Forget that broad match even exists. 2. Focus on long tail keywords only, this will drive enough conversions while costing you less money.
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