Let’s get straight to the point of this article: TL;DR: The answer depends on various factors. We all know that’s a cliché, but it’s true! _

_ The value of Google Ads is subjective and varies for each person or business. While we can’t give a definitive answer that applies to everyone, we can provide you with the key considerations so you can decide if it’s right for your specific situation. Let’s explore these factors and see how they might influence your decision to try or avoid Google Ads.

Table of contents

• Basic Google Ads pros & cons.
• Factors influencing Google Ads costs.
• Google Ads: Capabilities and limitations.
• Profitability scenarios.
• Starting costs

Evaluating Google Ads: Basic Pros & Cons

Before delving into the specifics, let’s outline the general pros and cons of Google Ads.

Pros

• Targeting Intent: Google Ads lets you target specific keywords, allowing you to reach potential customers precisely when they’re ready to buy. This is significant since 89% of buyer journeys start with a search engine.

• Quick Results: SEO is crucial, but it takes weeks or months to gain visibility on search results pages. In contrast, paid search ads deliver immediate visibility.

• Increased Exposure: Search ads appear prominently at the top of search results pages. Moreover, search engines are the top channel that consumers use for online brand research…

  

  Data source: Hootsuite

  …and Google, being the most popular search engine, dominates with 92% of the market share. Therefore, advertising on Google effectively puts you in front of people looking for products, services, and even specific brands – yours or your competitors'.

• Measurable Outcomes: Like most digital marketing strategies, Google Ads provides quantifiable results. You can clearly see which ads, offers, keywords, and landing pages are most effective.

• Diverse Ad Formats: Google Ads offers various ad formats beyond traditional search ads. Each channel plays a unique role in your marketing mix.

• Strong ROI: The Google Ads auction model ensures you pay the lowest possible price per click. This is because your cost per click is calculated based on the maximum bid of the ad below yours, plus one cent. You are only charged when someone actually clicks your ad. On average, PPC yields a $2 return for every $1 spent. Google even claims (though take it with a pinch of salt) that Google Ads can deliver an $8 return.

Cons

• No Guarantee of Low Costs: While you pay the lowest bid relative to competitors, some keywords can be highly competitive and expensive. Google Ads’ popularity contributes to this, as more users mean higher demand and costs.

• Ongoing Maintenance: The cost of your campaigns depends on how effectively you optimize your ads. Proper Google Ads management involves meticulous account structuring, keyword research, and continuous monitoring and adjustments based on data.[

  

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• Automation Requires Oversight: Despite Google’s advanced machine learning, you still need to understand and work with the automation features and the insights they provide. Automatically applying all recommendations isn’t always the best approach.

• Steep Learning Curve: Paradoxically, the more features and capabilities Google Ads introduces, the more complex it can become. While excellent free training resources are available, mastering the platform takes time and effort. Moreover, the abundance of features increases the possibility of making costly errors.

Factors Affecting Google Ads Cost

For an in-depth look, refer to our post on Google Ads costs, but here’s a concise overview.

• Industry: Each industry has unique average click-through and conversion rates due to differing consumer buying habits. This leads to variations in cost-per-click and cost-per-lead profiles. However, industries with higher costs often have higher conversion values.

Explore our Google Ads benchmarks report here.

• Customer Lifecycle: Customer lifecycle lengths also differ across industries, ranging from one day to several months or even years.
• Economic Climate: Economic factors like inflation, pandemics, or supply chain disruptions influence consumer behavior, impacting your Google Ads performance.
• Influence of Other Channels: Channels such as SEO and social media can boost brand awareness, indirectly influencing Google Ads effectiveness.
• Account Management Quality: As emphasized earlier, your Google Ads success depends heavily on your account management. Regular audits, maintaining ad and landing page relevance, adapting to platform updates, and consistent data-driven optimization are crucial for positive results.

Determining if Google Ads is Right for Your Business

We’ve covered the fundamental pros and cons of Google Ads. Now, let’s explore specific factors to help you decide if it’s the right fit for your business. Consider:

• What are your expectations from Google Ads?
• What’s your profitability scenario?
• What are your estimated startup costs?

Consideration #1: Defining Your Expectations from Google Ads

It’s crucial to establish clear objectives because Google Ads has both capabilities and limitations. Google Ads Cannot:

• Guarantee sales or leads.
• Assure profitable sales or leads.
• Poach competitors’ customers directly.
• Place your ads on competitors’ websites.
• Improve your organic search ranking. The first three are common misconceptions. Google Ads can contribute to these outcomes, but they aren’t guaranteed. The fourth point depends on external factors. The last point is entirely out of Google Ads’ scope. Google Ads Can:
• Enhance your visibility when people search for your brand, products, or services.
• Increase your visibility to users searching for your competitors.
• Reach potential customers through audience and persona targeting.
• Promote your physical store to nearby users. Assuming you have realistic expectations and want to utilize Google Ads for these possibilities, let’s assess their viability.

Consideration #2: Analyzing Your Profitability Scenario

Regardless of your Google Ads goals, various profitability scenarios can arise, influenced by factors you can and cannot control. Industry competition, cost-per-click, website conversion rates, and more play a role. Evaluate these scenarios to determine if Google Ads will be worthwhile:

Directly Profitable

• What it means: You earn more money directly from Google Ads than you spend on the platform.
• Is Google Ads Worth It? Absolutely, this is a clear win.
• Tip: Account for management costs (internal, external, or your time). If it’s profitable, continuing with Google Ads makes sense.

Indirectly Profitable

• What it means: Tracking or attribution might be unclear, but you notice a dip in revenue when you pause Google Ads, suggesting it’s contributing positively.
• Is Google Ads Worth It? Likely yes, even if the platform’s numbers aren’t directly reflecting it.
• Tip: Improve your tracking. While not always simple, resolving conversion tracking issues is vital to accurately assess Google Ads’ value and gain insights for optimization.

Break-Even

• What it means: Your Google Ads spending equals the revenue it generates.
• Is Google Ads Worth It? Consider these factors:
• • Does the added value boost product sales?
  • Are your margins high enough for a net positive ROI despite break-even ad costs?
  • Is the additional fulfillment workload justifiable?
  • Do you have repeat customers? A break-even first sale could turn profitable considering the customer’s lifetime value.
• Tip: Include all associated costs in your calculations and avoid undervaluing indirect benefits not directly reflected in the platform.

Likely/Definitely Unprofitable

• What it means: In these situations, the decision hinges on your Google Ads objectives.
• Is Google Ads Worth It? Consider the following:
  • Is your sole focus on direct profit? If so, and you’re not seeing it, Google Ads might not be suitable.
  • Is your goal purely local search visibility? Depending on the level of unprofitability, advertising on Google might still be worthwhile for brand awareness.
  • Are you aiming to outmaneuver competitors? These campaigns are often unprofitable (directly and sometimes indirectly). As long as you acknowledge the potential losses for this competitive edge, Google Ads could still be viable.
• Tip: Targeting competitor keywords can be pricey. Explore Joe Martinez’s series on cost-effective alternatives. Just as we can’t definitively say if Google Ads is suitable for any given company, we can’t predict your profitability scenario. The best way to find out is to experiment and analyze the results.

Consideration #3: Calculating Your Startup Costs

Besides financial, brand, and long-term implications, consider the initial costs of running a Google Ads account. Regardless of your approach, startup costs are inevitable, even if they aren’t immediately apparent financially. Let’s examine common scenarios, their pros and cons, to determine the best fit for your business.

DIY Approach

If you manage your Google Ads account yourself, expect to invest significant time and navigate a performance learning curve. Google Ads is intricate, and despite claims of user-friendliness, it can quickly become overwhelming without proper knowledge. This isn’t meant to discourage you, but to highlight the commitment required to avoid wasting money. All Google Ads cost money, so inadequate advertising skills will drain both your time and resources. Explore these resources if you’re new to Google Ads:

• How to Run Google Ads: The Complete Step-by-Step Tutorial
• PPC 101: The Beginner’s Guide to Success
• The Best Free Google Ads Training Courses for Every Level

Hiring an External Expert

This option saves you time and effort on learning and campaign setup. However, it involves a higher upfront investment to pay for their expertise. A performance learning curve still exists, but you’ll benefit from their guidance, allowing you to focus on your strengths. Thoroughly vet potential candidates by asking relevant questions before hiring.

Internal Hiring

Hiring an in-house expert might be feasible for some businesses. This option offers the advantage of handling Google Ads alongside other marketing tasks. However, ensure you don’t overload this employee. Avoid assigning unrealistic workloads, which can hinder their success. This approach involves hiring and salary costs plus benefits, along with an initial performance learning curve.

Assessing Google Ads’ Worth

Numerous factors influence whether Google Ads is “worth it.” While most businesses can benefit from it in some way, thoroughly understand the intricacies of starting, developing, and maintaining a successful Google Ads strategy. This article was co-written by Kristen McCormick and Michelle Morgan.