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The declining profitability of Google Adwords

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Re: The declining profitability of Google Adwords

#71

Post by rbritton »

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I agree; the site for the software looks terribly out of date, which in turn doesn't instill confidence in potential customers.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

I am an example of this mindset. I bought this software to use for our wedding last year. Normally a website looking like this would not be something I'd ever purchase from, but I'm familiar with the guy from several years of forums and mailing lists.

Re: The declining profitability of Google Adwords

#72

Post by bo1024 »

programminggeek wrote: post #51

There is a very simple reason for this happening - Google needs to keep making more money, so over time they need to raise advertising prices or increase click volume. There isn't going to be a dramatic increase in click volume anytime soon, so for Google to grow at 20%+ a year, they need to raise prices over time, which they do via quality score and social engineering. I've watched Google do this relentlessly since…

Source? Or is this just opinion?

Re: The declining profitability of Google Adwords

#73

Post by avimeir »

In my previous gig we used to spend single-digit millions/year, and saw all metrics falling down like OP did, and we had a team of 6 experts with tons of experience in AdWords.

Not sure about this vertical, but in other (much more lucrative) ones such as travel, Google is pushing its own solutions at the expense of other websites.

For example, try looking for a hotel in new york and you will see Google Hotel Finder results, Google Map (which feeds from Google Hotel Finder), Google Places for Business, etc. Google Map will even stay fixed meaning that as you scroll down the ads are hidden by it.

There's much less value in positions that used to be profitable, especially 4+ (right-hand side ads).

Re: The declining profitability of Google Adwords

#74

Post by tonyedgecombe »

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…

I agree with your comment on administration and I am pretty sure this is deliberate on Google's part.

Re: The declining profitability of Google Adwords

#75

Post by geetanjalityagi »

JimWillTri wrote: post #64
geetanjalityagi wrote: post #35

The OP probably needs to optimize his ads (i.e. tune them) and the conversion funnel. In my five years of working at Google as an AdWords manager (I don't work there anymore), I've seen cost-per-click and bids rise consistently especially for Google search. This has a lot to do with competition and limited real estate. However, Google maintains something called Quality Score which is analogous to page-rank that deter…

Can you give an idea of how much lower the cost per click could be with a very high quality score (ie 5% of Googles suggested cost per click)? "With a high Quality Score you can get clicks for a much lower cost. Some experiments put this at about 5% per unit of quality score change (Quality score is on a scale of 1 to 10)."

As I understand from your question, there are two things here one is average cost-per-click which is how much you actually pay for each click and this is usually lower than how much you bid (max CPC). I've seen avg. CPCs fall by 10 - 50% (depending on the industry) when Quality Score changed from 5 to 7 for keywords. You can actually track Quality Score and overlay it with avg. CPC and other stats to see a correlation for your account. We created a tool for doing this. The second is Google's suggested cost per click which is the recommended first page bid that Google shows next to each keyword. This is a function of your Quality Score and competition. You'll notice that keywords with a low Quality Score have a relatively high required first page bid. Please feel free to email me (geetanjali att optmyzr.com) with any questions!

Re: The declining profitability of Google Adwords

#77

Post by bobsy »

joering2 wrote: post #63
NKCSS wrote: post #37

Earlier quoted context omitted.

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 site wouldn't make a dent. You seen Cragilist recently? or even Google homepage for the last 10 years?? People go to his website for a certain product. They couldn't care less how the site looks. Does crappy look of Apache software website turns you down from getting the newest download? How about PHP site not updated since 1999. Does their crappy site means they don't know their craft? After checking couple…

Google homepage has always been good.. You are immediately drawn to a big box in which to enter text.

The problem with guys site is it isn't optimised for getting purchases. Too much is going on. The user isn't guided through the software or pushed to take a trial or purchase. Instead the visitor is hit by everything at once, doesn't know where to look and is somewhat overwhelmed by stuff.

You don't need to be a graphics designer to make a successful site. Good content and a clear call to action is the important thing. Beautiful design on top is just gravy.

Re: The declining profitability of Google Adwords

#78

Post by wwwong »

joering2 wrote: post #63
NKCSS wrote: post #37

Earlier quoted context omitted.

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 site wouldn't make a dent. You seen Cragilist recently? or even Google homepage for the last 10 years?? People go to his website for a certain product. They couldn't care less how the site looks. Does crappy look of Apache software website turns you down from getting the newest download? How about PHP site not updated since 1999. Does their crappy site means they don't know their craft? After checking couple…

Why wouldn't updating the website make a dent again? Landing page optimization is a huge forcus for any online commerce company because updating a website (design, content, flow) does make a dent.

Re: The declining profitability of Google Adwords

#79

Post by wwwong »

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.

Happy to elaborate? What would you like to know?

As for finding an SEO/SEM expert, typically best to go by referral. Most SEO/SEM experts that you'll find on google/forums will run you through templated best practices.

Best to work with someone who has been vouched for.

Re: The declining profitability of Google Adwords

#80

Post by megrimlock »

veesahni wrote: post #54

Another aspect of this is Google's inflationary tactics that continue to rack up rates. I had written a post on this: http://www.vinaysahni.com/how-google-inflates-adwords-bids Their inflationary game has still not ended. This week I got a coupon in the mail for $200 AdWords credit if I spend $50.

Hey Vinay -- I just wanted to remark that supportfu.com looks great. Even though I'm not in a business where I'd need such a thing, I found your copy compelling enough to imagine myself running such a biz and how to provide the best possible support, and concluded that I'd want something very much like what you offer. Best of luck.
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