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The declining profitability of Google Adwords

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Re: The declining profitability of Google Adwords

#51

Post by programminggeek »

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 2006. They are quite good and the fact that people in here are blaming the advertiser for not managing their account well is proof of how good Google is at social engineering their way to profits with AdWords.

Re: The declining profitability of Google Adwords

#53

Post by pmelendez »

Well, the online display advertising market is getting harder for everybody, so Google is not having that easier either.

As RTB market (http://en.wikipedia.org/wiki/Real-time_bidding) is growing in significance, then it is starting to make sense to diversify the networks that advertisers would use, so just using Adwords is not enough anymore, and in that sense it is time to start checking out OpenX, Appnexus, etc.

Re: The declining profitability of Google Adwords

#54

Post by veesahni »

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.

Re: The declining profitability of Google Adwords

#55

Post by gesman »

senthilnayagam wrote: post #31

we are seeing similar trend, looking for a alternative which works and is cost effective

Find which sites your buyers are visiting and advertise there directly without Google. your customers are using google.com for a few seconds a day, but reading relevant sites for hours.

1. Search for your keywords.

2. Click on top 20 sites within organic (not paid) results

3. Strike a deal with these sites to advertise.

Re: The declining profitability of Google Adwords

#56

Post by wslh »

daniluk wrote: post #49
wslh wrote: post #43

Earlier quoted context omitted.

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.

I am sure that AdWords works! and the reason we paused our campaigns is that I think it's better to spend time on writing articless because we don't have the time to put on AdWords. The worst thing is that I can't really outsource or contract someone to do it because they must know a lot about my niche.

Re: The declining profitability of Google Adwords

#57

Post by AJ007 »

Please bury articles where people claim facts without providing a single number.

We don't know how many total clicks this involves, did the clickthrough rate drop 1%, 5%, 90%? Was the traffic search, search syndication, content? Where there content text ads, image ads, flash ads? Did he ever add new keywords, ads, geographic markets? Did he ever change the landing page design?

I would be very embarrassed if I wrote that blog post.

Re: The declining profitability of Google Adwords

#58

Post by cbr »

tonyedgecombe wrote: post #27
lovskogen wrote: post #22

Earlier quoted context omitted.

Maybe the shift towards web apps has turned potential users away from desktop apps like the one mentioned.

I don't think he said his sales were flagging, just that Adwords was becoming less profitable.

He said "conversions" were falling, which means sales: http://successfulsoftware.files.wordpress.com/2013/05/adword...

But he doesn't say whether conversions-per-incoming-click are declining.

Re: The declining profitability of Google Adwords

#60

Post by glesica »

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.

The site looks out-of-date, but would the average potential customer for table planning software know that? I'm not sure. If anything, it seems likely to me that the complexity of the site is reducing conversions, but not the fact that it is "out-of-date".
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