Many businesses around the world advertise each and every day to a wide variety of audiences. With the advent of the Internet, advertising to a wider audience has never been easier. Not only can your ads reach a larger audience base around the world but in many cases, they can save you time and money. However, with businesses like Google stepping in and offering to help automate your ads, you may not be saving as much money as you thought.
Recently there have been new developments with Google ads and the way they “help” the businesses they partner with. Yes, it may seem easy to just hand over your money and your ad campaign to a big corporation like Google, but you can’t always guarantee you are getting what you paid for.
With costs increasing for Google advertising is it worth the discount that Google is offering in their latest email campaign? In some cases, it may be more worth your while to look at all the options before jumping into an automated Google campaign.
Increase In Cost Per Lead
Google has a variety of ways to help you reach your target audience using their ads. One of the most powerful tools is using their Leads function. By choosing leads as the focus, instead of just clicks, you are asking Google to go out and collect data on users who are the most likely to make a purchase of your product or service.
Google is essentially going out and doing all the work to find the best potential targets for your advertising. These are the visitors who are most likely to make a purchase or sign-up for a service right away.
By going with this route, you are cutting down on the amount of work you personally need to do and the amount of time in between advertising to making the final sale. This may sound easy, and a great option for your business, but there are a few things to keep in mind.
The Cost Per Lead (CPL), on average, costs more than any other option in a Google Ads campaign. The reason is that Google is doing almost all the work for you, and it tends to provide more sales for your company on average. However, between 2021 and 2022 the cost per lead has increased for 91% of industries.
Most notably the CPL for the arts and entertainment industry has increased 134%, travel has gone up by 69%, and in the furniture world, they’ve seen a 54% increase. Over the years Google’s prices have gone up and down numerous times since they began to offer this service. But never has there been an increase this big.
There is, however, a reason for the sudden increase over the past year. With COVID-19 coming to end more people are venturing out of their homes and off the Internet, meaning Google’s revenues have decreased.
To compensate for the dropping revenue, Google wants to get a bigger piece of your pie. The reason they have targeted these industries is that there has been a boom since the end of COVID-19. More people are out spending money on arts, entertainment, and travel. Google wants in on all that action as well.
So, the more money your industry is making the more Google wants to make. If your industry suddenly sees an increase in business, Google is also going to suddenly raise the price that they charge for ads for that industry. And because your business is making more money, they are hoping it means you are also willing to spend more money on your ads to then drum up even more business.
Along with the cost increasing, choosing to go with Cost Per Lead rather than any other option would mean giving Google full control over who sees your ad, based on collected data. Yes, this can be a good thing as you can ensure that only people who are most likely going to buy are viewing your ad. But it can also mean that you are losing control over who sees your ads and may in fact end up losing out on business from a wider audience base.
Google will suggest your products to people who are Googling comparable products or services in the hopes that they are ready to make a purchase. But that does not always guarantee that they will. In fact, they may choose to go with another company or a different product or service all together. So, just keep that in mind when weighing the pros and cons of being less hands on and having Google control the wheel for you.
Increase In Cost Per Click
Another way to advertise through Google is with Cost Per Click (CPC). Rather than leads where Google sends you leads on potential customers that are almost ready to buy, you are responsible to make sure your ad is reaching the right audience base.
Instead of paying Google more money for them to do most of the work for every lead, you are now paying them every time someone clicks on your ad. Choosing cost per click rather than lead can in some cases be a better option, they cost less, and you have more control. But there are some other things you need to consider as well.
First, the CPC has also increased for 57% of industries in the past year. For the same reasons as the CPL increases, more people are trying to find ways to get out of the house. Because clicks on average are a cheaper option than leads the increase overall is not as high and hasn’t affected as many businesses.
But depending on your marketing budget and strategy your business may still see a big hit in cost. Not only that but depending on the type of business you have, you may see a larger increase in price than another, as cost increases are dependent on business type.
When it comes to going with cost per click rather than cost per lead you have more control over your marketing strategy. However, it does come at a downside. It would mean that either you yourself or someone on your team (REM can help) would need to be an expert in marketing, budget, strategy, etc. to make your businesses ad campaign run smoothly.
On top of that you are no longer advertising to a very niche audience that you know are ready to buy. Instead, you are advertising to wider audience base who could come across your ad at any point in time.
Automatic Applied Recommendations
Along with cost per lead and cost per click increasing, Google has made some other changes around getting more revenue for themselves. Lately quite a few business owners have received an email from Google, stating that if they enroll in “Automatic Applied Recommendations” they will get $100 credit for “future ad spend”. This got a huge response and quite a bit of backlash from the Digital Marketing Community on twitter.
A lot of people were saying “that’s not nearly enough” or “Up next: $200 credit if you add broad match across campaigns”. Many people are displeased with the way Google is going about this. They see it as the company blatantly asking you to hand over control to them for your marketing campaign in exchange for $100.
Now to many people that may seem like a promising idea and has in fact drummed up some extra business for Google. But when you look a little closer you can see past the façade. Google is asking you to hand over control over how your ad is displayed to the public, so you don’t have to worry about it, in exchange for $100.
With Google able to make changes to your campaigns without your approval, they can manipulate your ads to cost you more money. Essentially, you are letting the fox guard the chickens! It’s in their best interests for your campaigns to overspend and not be efficient. If their revenue is hurting, they can just adjust all the auto-campaigns to spend 1% more and boom they have a pile of cash coming in.
Also, in the end the $100 credit isn’t going to get you much of anything these days with Google, as their prices have been increasing and most likely will continue to increase. Even if they stay stagnant, that $100 is only going to get you a handful of clicks or maybe three leads at most depending on your type of business.
On top of that who’s to say Google won’t turn around and ask you for something else in the future or force you to spend that $100 credit on something they deem mandatory to get that money back from you. These are all things you need to consider before making any choices.
To find out if this is right for you or if you are looking for other options with your marketing campaign, our Marketing Director, Sanj Rajput would be more than happy to speak with you. In fact, we manually manage our clients’ campaigns to make sure that they are as efficient as possible and that we aren’t losing any money to unnecessary costs.
