Are your returns from google ads going backwards? Has your cost per lead increased in the past 12-24 months?
Don’t worry, you’re not alone. Many businesses have faced significant headwinds with their google ads results over the past 12-18 months. In fact, most businesses return on investment from google ads is worse today that it was 2 years ago. And what’s worse about this situation is that you, as a business, haven’t done anything worse with your google ads management, it’s not you….so what’s gone astray?
Over the last 12-24 months, Google has introduced a whole host of changes and refinements that are generating significant headwinds for those of us in the lead generation space. Many have suffered significant falls in lead volumes and quality or have experienced a significant rise in acquisition costs.
The unfortunate reality is that these changes are here to stay, so we thought we’d share with the 5 reasons why your google ads results are going backwards at a rate of knots and what you can do about it to get back to positive returns and growth.
The 5 key reasons why your google ads results are going backwards.
Firstly, a quick disclaimer before we begin. This article is based on our experience with lead generation campaigns, it is not reflective of other types of businesses like e-commerce businesses.
1. Performance Max (Pmax) doesn’t produce max performance.
Pmax promises to revolutionise your campaigns. But let me be clear, it does nothing but produce mediocre results for B2B and lead generation businesses with Pmax. A well-structured and managed campaign always performs better. Pmax simply doesn’t cut the mustard with generating superior results for lead gen businesses and here is why:
- Display and partners advertising – Display and partners never converts as well as pure search does for both volume, quality, and cost per lead. Google is maximising its virtual real estate and showing your ads on websites that will never convert into quality leads for your business – and you’re paying Google do to that.
- Auto bidding – Automation around bidding as stated in point two above, can end up costing you more money.
- Inaccurate, incomplete, or incorrect conversion actions – Pmax (and indeed some auto bidding) is generally set up to maximise conversions. Which is good in theory, who wouldn’t want to maximise the number of leads into your business? But the core challenge that most campaigns face is that the conversion tracking isn’t set up correctly or accurately, leaving Google to optimise around inaccurate data, which results in inaccurate optimisations and generates sub-standard results.
Boring and bad ads – See the comments above about dynamic ads, it’s the same with Pmax. It can show a boring message and is geared around getting clicks not quality leads.
- You can’t compete on everything – Pmax tries to compete on everything, and ultimately you can’t. To make a decent return from Google Ads, given how expensive they are these days, you need to be focused and smart with what you compete on. The concept of competitive advantage is just as important in your Google Ads strategy as it is in your overall business.
2. Changes to match types brings in lower quality visitors
Late last year Google changed the rules to its match types. This sent most campaigns into a tailspin and some campaigns never recovered. Here’s what happened:
- Google changed exact match keywords to be more like phrase match keywords.
- Google changed phrase match keyword to be more akin to the old broad match.
- Google changed broad match to ultra-broad, so broad that broad matches became irrelevant to your business.
Essentially, what it did was broadened what would match your keywords with the search query. It cast the net wider to show your ad to more people. But the problem with that is that the ‘more’ are less interested in what you have to offer. While visitor numbers maintained, the quality declined significantly.
When you have the same or more visitors that are lower quality this equates to less leads – and that’s exactly what happened for nearly every business literally overnight.
The saving grace for some was that smart Google Ad operators were onto it quickly and developed strategies to address it (nice work Michael – our Google Ads expert!). But for many, it took a long time to rectify and indeed some are still suffering from a significantly lower return on investment than what they had 18 months ago.
3. Bid Automation is your enemy
Around ten years ago, maybe more, Google started to ‘help’ businesses with real people calling to help you manage your account and give you advice on how to get more out of your campaigns. The problem is those recommendations often came down to increasing your bids and budget. Again, this has nothing to with providing better returns on ads, it came down to increasing revenue for them.
Then along came auto bidding! Google says, “Trust me, I’ll manage your bidding for you so we can maximise results for you”. Which if the whole system wasn’t an auction system this might just work.
Let’s put this another way. Can you imagine going to a real estate auction where you are trying to buy a house against five other parties, and the real estate agent goes, so we’re going to run this process by auto bidding for each party. We’ll automatically increase your bid when you get outbid by another party. Guess what happens? The price keeps going up with no end in sight!
This is exactly what happens with auto bidding. Most people managing campaigns today are lazy and let Google auto bid for them. This increases your bid against the first competitor, which then rises the bid for the next competitor, which rises your bid again.
4. Dynamic search ads are written for clicks not conversions.
Dynamic search ads give Google poetic licence to develop and show the ads it thinks are going to generate the best results. Once again there are fundamental issues with using these that generally produce mediocre results.
The first being that Google creates the ads. It pulls bits and pieces of information from your website and campaign and shows it to people who are searching on Google to get them to click the ad. The underlying assumption is that it’s going to show the right message, so we capture the right visitor through to the site. But here’s the catch, Google’s motivation is to get people to the site – that’s how money is made. It’s your motivation to get the right people to the site – that’s how you get paid. So, what could go wrong?
This means Google’s ad production will be based on getting clicks not high-quality leads that convert, and this can produce lower quality visitors. The sort that you don’t want as customers! The ones that will never become valuable, profitable, or fun customers that you want to work with.
With all this in mind, why not just write good ads? Ads that convey an engaging message, bring the right visitor to your site, and appeal to the people you want as customers. As with most things in life, you want quality over quantity. It will generate much better results and return for your business over both the short and long term.
5. Google Ads are geared to Google’s interests.
The final task to undertake is to shift your mindset to understand that Google will first and foremost look out for Google – and the goal is to create more revenue for them. It does this primarily through advertising, so it will make changes to create more revenue from businesses like yours. Given its ability to attract new customers is drying up, it needs to maximise yield from existing customers.
While they have created a win/win platform, all recent changes have been to make Google the bigger winner, not to get you more qualified leads! From a business perspective, it’s done an excellent job of making more money, with little to no benefit to those that are funding it.
So, remember Google Ads are in Google’s interests not yours! You need to manage your campaigns stronger than ever with intelligence, analysis, and a manual (not automation) processes to produce the best short and long-term results. Don’t settle for mediocre results in a bid to save time through automation, it’s just not in your best interests.