Understanding the painful (and powerful) Google Ads system

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Ouch! Because of an error in adding some keywords, I will pay more than $60 for some totally unqualified Google Ad clicks on what should have been a quiet Saturday.

Since its inception, our business has been on the selling, rather than purchasing, side for advertising. So my foray into paid Google Ads in the past few months has been both exasperating and challenging — as I needed to relearn my original assumptions about the program, and discovered how little slip-ups can become costly errors. (Though, thankfully, one of the best features about Google Ads remains: If something isn’t right, you can stop the ads quickly — and you’ll know right away if things are working, or they aren’t.)

The foundation of our advertising purchase is our new publication, Ontario Construction News, which we’ve designed under new regulations to challenge another publication’s former 30-plus year monopoly.

The rules under the previous Ontario Construction Lien Act and continued in regulations under the current Ontario Construction Act are unique, as far as I can tell, anywhere in North America. They require contractors to publish a Certificate of Substantial Performance (CSP) notice when projects are completed, to clear the 10 per cent holdback — which can be a substantial sum of money on larger projects. (There are also several other forms that need to be published in much rarer specialized circumstances.)

While there are still some pretty significant restrictions and barriers for what the regulations call a “daily construction trade newspaper”, I realized one change — allowing the publication to be digital rather than printed — would make it possible for us to launch our competitive business.

However, we needed to figure out how to find our customers.

Some strategies were obvious, including marketing through our existing publications, strategic alliances with other organizations and associations, and (most effectively) direct mail.

I thought, as well, that some Google Ads would be effective and inexpensive — especially for organizations who only occasionally need to publish these mandatory legal notices.

Surely, there wouldn’t be much competition for the specific relevant keywords –and I could quite easily geofence the advertising, since it only applies for Ontario-based contractors. As the other publication had a monopoly, it might purchase some defensive advertising, but there would be unlikely to be anyone else bidding for the keywords. They should be quite inexpensive, I thought.

Wow, was I wrong. When I set up the AdWords account, suddenly I experienced a $20 click– and the average was well above $10.00. This wouldn’t be bad if every click turned into an order, but I quickly found that the broad search inquiries were generating lookers and people seeking information about specific projects, not looking to purchase the CSP ads.

I took advantage the free consultation service from Google in setting up the account, and started getting things somewhat under control. There was some revenue, but I knew more change was needed

Jim Lamzela of DataBid.com, our key strategic partner for construction leads information, suggested Wordstream.com, an online service that helps manage the advertising process. A brief conversation with one of the company’s sales representatives led to insights about effective use of “negative keywords” to eliminate the most wasteful search results, and I signed on, at a cost approaching $375 a month — with a three-month minimum subscription.

Initially, things looked liked they were starting to work out. Cost per click started declining to the range of $2.00 — and my conversion rate — measured by the number of people who clicked on the ads, and then went to our site to download the specific government forms needed to prepare the ads — improved. All seemed well.

Then, last week, in a training call, a Wordstream representative casually suggested we could add some additional keywords to increase results. Without questioning whether these additional words would help or hurt, I allowed the change to proceed. Alas, on Friday and Saturday, my budget blew through the roof with expensive clicks — and most disturbingly — all of the clicks had little connection with anyone who would seriously be interested in our offerings.

Last night, I uncovered the problem — overly general search terms were generating some really awful click activity — and after removing the unwelcome options — things are calming down.

The point behind these observations is that Google Ads can be very expensive, and Google’s evolving artificial intelligence capabilities is setting up “what the traffic will bear” costs for keyword combinations that can be truly expensive. I shudder to think how expensive things could get if I worked in a truly competitive market.

Third-party services such as Wordstream can be helpful, but (as I learned this week) you need to be on your toes with these services as well, and really understand what you are doing before you commit major sums to Google Ads. Ultimately, you’ll have to assess your net revenue and conversion levels to decide on whether they are worth the cost. It isn’t a sure thing.

Thankfully, I can afford a few mistakes. Our customers are happy; they are saving a substantial amount of money and we deliver the “proof of publication” for the certificate advertisements much more quickly than the competition — freeing up their holdback funds. We’ve achieved operating break-even, and profitability should be quite good because most of our fixed costs are now covered, and the variable costs don’t increase that much as revenue grows.

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