$1,800 for $100,000? Can simple AdWords listings succeed?

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A few days after returning from an enlightening visit to Google’s headquarters in Mountain View, California, I had a fascinating conversation with Tim Klabunde, marketing director at William H. Gordon Associates, Inc., an engineering practice in northern Virginia serving the mid-Atlantic market.

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That’s me, trying to ride an employee bicycle at the Googleplex in Mountain View, CA

Tim told me, in recent months, he decided to almost triple the Google AdWords budget for his practice — to about $150 a month.

But here is the surprise in this small number:  He estimates, for a few minutes work setting the simple word ads in place (and before he tripled the budget), the ads were generating enough business to provide about $50,000 in revenue for the practice.

That number is okay, but consider another fact.  He says 85 per cent the practice’s clients become repeat customers, meaning the actual return on investment is multiplied many times over.

Of course, $50,000 — or $100,000 — in annual revenue won’t sustain a substantial engineering practice handling multi-million dollar projects.  But Klabunde’s early success raises other questions:  What if WHGA and its affiliated companies, including Mid-Atlantic Utility Locating, LLC (the original business which started using AdWords) and Gordon Landscape Architecture increased their AdWords spend, tested different ad wording and landing pages, and explored other options to increase click through and lead generation?

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The William H. Gordon Associates, Inc. website

Tim isn’t doing that just yet. He can find the approximately $2,000 a year he spends easily by reallocating funds that went to the Yellow Pages (which he says he has no evidence of generating any results).  More funds would require greater budget allocations.

Of course, Tim may be in the sweet spot for Internet marketing.  While he needs to pay $1.00 to $2.00 a click to obtain enough placement on the Google searches, he says WHGA’s direct competitors haven’t discovered the power of AdWords yet.  It would take just one serious competitor to engage in a bidding war. One thing that defines Google AdWords compared to other media is that when an auction occurs, prices go up — and Google profits handsomely as the competitors battle it out for position.  In these situations, what had been an enticing AdWords bargain becomes more of a conventional advertising “buy”, where you have to be extremely careful about your landing rates, conversions and the like.

However, if you haven’t thought of AdWords and think that “advertising doesn’t work” for your professional practice, consider Tim’s tale seriously.  Your modest investment in some do-it-yourself AdWords advertising might provide truly incredible results for your practice.

Republished from the Construction Marketing Ideas newsletter, Sept. 20 2011.

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