Some thoughts about the opportunities and perils of Google keyword advertising

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I certainly experienced a rather shocking and rude awakening a few weeks ago when I decided to reactivate my Google AdWords account and purchase some keyword advertising for our new Ontarioconstructionnews.com title.

Naively, I thought the process would be painless, risk-free and easy. Accepting that you can quickly pull the plug on any Google campaign, I suppose the “risk free” language applies — but it hasn’t been painless or easy.

The back story: Our new publication is designed to sell some very specific legal advertisements mandated by the Ontario Construction Act (formerly the Construction Lien Act).  Provincial legislation requires contractors to advertise some standard government forms, most significantly something called a Certificate of Substantial Performance (CSP), if they wish to clear their lien holdbacks when they complete their projects.

For decades the legislative wording restricted these advertisements to a specific privately owned “construction trade newspaper” — because the publication needed to be published (in print form) daily, Monday to Friday, and focus primarily on construction.

For years, our monthly Ontario titles and daily updated websites could not even consider accepting these advertisements — although we would receive a few inquiries from potential advertisers each month — because obviously (especially in 2019), it would be folly to start a daily printed newspaper. Even if we succeeded in attracting some business, it would almost certainly be unprofitable.

However, the new Construction Act changed the rules to include the definition of “or digital” for the “newspaper” and so, after checking with our lawyers and waiting for transitional provisions in the law to take hold, we started our daily. It’s just like a real newspaper, with pdf page flip pages, and the like, but we don’t print or mail it — and without these costs we can be profitable with less than 10 per cent market share at half the price of the competition.

But how could we promote our new business?  Google Ads seemed logical as occasional advertisers would search the relevant keywords, we had a clear geographical “fence” (Ontario), and — I thought — there would be no competition for the relevant words since the incumbent publication has always had a monopoly.

I thought the keywords would be dirt cheap, and highly effective for advertising.

Boy did I get a wake-up call.

First, I learned that Google uses artificial intelligence to “value” the keywords, and if it senses you are trying to poach a competitor’s words, the price goes up. Keywords for everyone else for the competing publisher should cost about $2.00 — when I initially set up the account, Google dinged me $22.00 for ONE click.

I quickly put a pause to the campaign to figure out what the heck was happening.

As I did, I discovered an array of “consultants” and agencies all ready to help out with your Google advertising, often for a percentage of budget fee. Such mechanisms may make sense, but I find them inherently conflict-ridden. If you are compensated for your services by how much your client spends, then what is the real motivation to keep costs down? Of course some of these agencies/services offer some sort of revenue or profit increase guarantee, and I suppose they may make sense if you simply don’t have the time to manage things, have a large enough budget, and know how much you’ve been losing (or perhaps more positively) earning from these ads.

As well, Google offers “free” consulting and support account managers. One approached me when I set a placeholder budget of $3,000 per month. She would take care of everything for free. I thought, “sure” and then got that $22 click. As a Google employee, her interests may not be the same as mine, as well — the more I spend, the more Google makes.

(In part, I don’t mind that too much, as with my work on the AdSense side of the picture — that is publishers placing ads for a cut of the revenue — I want higher revenue. And I own some GOOGL. shares — but the idea is to make, not spend money here.)

Things have settled down a bit. I put a still generous (to me) price cap on the individual ads, and set a modest $25.00 per day budget. The algorithms seem to have figured out the keywords don’t need to be priced “that” high, though Google is still restricting coverage because of my lower bids.

And, yes, there’s competition. The competitor that previously had the monopoly has had enough business sense to buy its own keyword ads (at presumably a higher budget) to displace my ads, and maintain its position. I now have the choice of engaging in a bidding war or patiently accepting that there isn’t a magic bullet here.

Does this mean that I should give up on the keywords, or go full-bore and prepare to spend more money and resources on the AdWords campaigns? The answer is: The jury is still out. I’m taking a patient approach here and will review my choices in the next couple of weeks.

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