Why Small Advertisers Can’t Use Adwords Anymore!

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Remember back in 2001, during the good old days (of the internet) when you could actually use Google Adwords as a means to drive quality traffic to your website, at an extremely low investment to the advertiser? Back when niche keywords cost .05 – .20 per click and if you really wanted to open up your pockets and bid on broader terms, you would pay .25 – .75 per click.

Now days you would be so lucky to find a niche where you can pay under $1.00/click. What I am saying is that the days when small advertisers could gain visibility (at least in the paid results) on Google are over. Small advertisers don’t have a budget to “test” keywords, landing pages, offers, etc… For a small, local businesses, $250/month is a lot of money!

The problem is that over the past 10 years, the competitive landscape has gotten much more saturated. There are bidding wars between advertisers to push their ads towards the top. I know, I know…Ad Quality Score plays a factor in how much you pay per click, but I’ll tell you something, if you have deep pockets and are willing to pay a lot per click…Google will put you at the top. So when push comes to shove, the big brands and large corporations with the bigger budgets, are the ads that are still going to be showing.

The Solution

So what can small, localized business do? The good part is that there are so many new and innovative ways you can drive traffic to your site. Just to stay focused on Paid Search, you can try newer ad platforms like Facebook Ads and MyAds (Myspace Ad Network). Facebook Ads in particular has been getting a lot of attention recently because the CPCs are reasonable, you have a ton of awesome targeting options, and…oh yeah…Facebook gets a ton of traffic!

To the Small-Business Owner: Don’t let Adwords put a bad taste in your mouth about paid search. Paid search can still be a valuable marketing tactic; you just need to find other outlets that can still drive quality traffic at lower costs. I would strongly recommend to keep your mind open to other paid search techniques. It may be that you can drive the same amount of traffic that Adwords would bring you, with Facebook and MySpace ads at half the cost.

Using best practices to increase ROI:

  • Create relevant landing pages
  • Use strong call to actions
  • Use free content as a means of lead generation
  • Use promotions and timely specials to entice user action
Mark Thompson
Mark Thompson is the creator of StayOnSearch, a blog dedicated to Marketing Professionals, SEO's, and Business Owners. He also is the President of Search Creatively, an Internet Marketing and Consulting company.
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  • http://www.palatnikfactor.com Pablo


    I agree and disagree and just browsed the post really quickly to be honest though. Adwords is still a great way for a small website to get exposure. And yes, Adwords bids have gone up, but let’s be real, did we expect as advertisers that those prices from before were going to stick as online marketing grows? I think, in my opinion, adwords is still fairly affordable for small business but that always depends on your niche, right?

    I think Facebook is more expensive than Adwords. I went through $100 on Facebook like NOTHING.

    BUT I agree Adwords is no longer a channel where small business advertisers can get the same value they used to before and grow their online business alone that way.


  • http://www.thesearchagents.com Bradd Libby

    The problem is that over the past 10 years, the competitive landscape has gotten much more saturated.

    This is only a small part of the problem. Google actually selects an advertiser-specific minimum bid to get into each auction, plus an advertiser-specific min CPC. So, even if there’s NO competition for a specific term, you can still be forced to spend $1, $2, $3/click, etc.

    Read more in ‘Ad Auctions are Not Auctions

  • http://earnmybusiness.com Jeffrey Taylor

    Great post. another little known secret is that adwords clicks have gone down over the years as more people became aware that those sections of the SERPs are paid ads.

    Most small business owners cannot afford a ppc service and try to do it themselves not understanding the principles behind ppc and end up bidding too high and have poor conversions because they just link people to their website versus a well targeted landing page.

    Facebook is a great place for small business owners because of its laser sharp targeting tools and the next big move may very well be Mobile PPC.

    Google just bought adMob because they see the future. As more people buy smart phones it opens up a whole new place to market. Plus mobile ads are dirt cheap right now.

    • http://www.stayonsearch.com Mark Thompson

      Interesting that adwords clicks have actually gone down over recent years. Is there any data or research on that? Would love to see a study done on that.

      That is a good point. Many small business owners try to run their own PPC campaigns with minimal success. They bid on broad terms, don't point people the best landing page..the list goes on.

      Personally I haven't really experimented with Mobile Ads. That would be a great topic or blog post for anyone that has experience in that space!

      Awesome insights Jeffrey.

    • http://www.thelostagency.com/ David Iwanow

      The clicks have also gone down as people are getting smarter and tracking better, they are hopefully doing less buying of traffic for the sake of it and more focus on conversions.

    • http://www.internetperformancegroup.com Chuck Topinka

      “another little known secret is that adwords clicks have gone down over the years”
      It seems like a little more information would be needed to fully qualify that statement. The number of AdWords clicks alone would just be a factor of spending divided by average keyword price. Seeing that overall US Online Ad Spend is only up about 7% since 2008 (according to emarketer) and average keyword price is probably up double that or more (I couldn't find a reliable number), the statement that AdWords clicks have gone down is true, but only because the cost per click is increasing faster than overall budgets.

  • http://www.iwss.co.uk Riz

    You are right but there are still chances to get cheap keyword but you have to invest more time to find out other cheap available keywords. they might not have more strength in terms of traffic.
    Another thing which is quite interesting now a days is to join any lead generation company, many firms are running massive adword campaign and they bypass clients to small companies and you get qualified leads with less pain.

    • http://www.stayonsearch.com Mark Thompson

      You are right, that there are still SOME cheap keywords still out there, its just much harder to find them these days.

      That is a great idea of using a lead generation company. If they are willing to sell you the leads at low cost, that could be another option.

  • http://searchmarketingwisdom.com alanbleiweiss

    Bing is a consideration – the cost per click is typically lower there than Google for most of the small and mid-size businesses served by my agency clients. At least that's what the PPC people I coordinate with tell me.

    And being an SEO guy, I say – if you're a small business with a local market there are a ton of SEO related things you could do for that $2500 or $5000 in annual PPC budget from an SEO perspective that would net you longer-term value. 🙂

  • http://www.thelostagency.com/ David Iwanow

    Its just about being smarter, i know one one business that used to run adwords and got good 10% conversion rates stopped their campaign from 4 months and just getting started again and the CPC rates have increased from around $1.10 during September 2009 to around $1.87 now.

  • Matt McGee

    It's not just the budget issues, Mark — AdWords is just beyond complicated now. I “manage” (using the term extremely loosely) my wife's Adwords account targeting local real estate keywords. We spend, I think, $350 per month or thereabouts and it does drive traffic — but I'm completely at a loss to make changes that might help us do better. I'm an SEO/social guy and Adwords is like rocket science anymore with all the things they've added.

    • Matt McGee

      (Sorry, didn't finish my thought!) Anyway, I just wonder how many other small biz owners have a chance of figuring out how to maximize value from AdWords. One of my clients wants to do a little PPC every now and then. I can help with the basic stuff, but no PPC consultant wants to bother with someone who's only spending a couple hundred dollars a month. So, she's stuck with me.

      Definitely a tough situation for SMBs….

  • http://www.KateKutny.com KateKutny

    Mark, what a fantastic article! I really like how you mentioned other things people can use if they can't afford Google Adwords. Its great to have many other options to get traffic.

  • Alter Mike405


    What i think in PPC is that with Google Adwords it works fine, coz i had tried Facebook adds, its bullshit. Google adwords is much better as I also get conversion and also clicks. It all depends upon the industry, the keywords that u bid and the way u find out the best budgeted keywords. I don't target high end keywords, instead i target mid level location based keyword where i get conversions, so that how PPC works. Anyone interested try me

  • http://www.jmdinfosys.co.in Jmdinfosys

    Nice points Mark..Currently Face book ads are growing rapidly. That's why Google is actually loosing the market day by day. Small business owners are now creating ads and fan pages with a less investment and they are getting very good result.

    Google is also planning to launch Google ME for Social Media. Let's see what effect it will create in CPC. But more people are investing in different types of ad programs. It's a good for web world.

  • http://www.lebseodesign.com/search-engine-optimization.html SEO Lebanon

    Nice points.. and great insights from Jeffrey… mobile ads are really cheap

  • http://www.delhigeneratorhire.com generator on hire

    The strange thing about this is that, after people catch on to analytics, another SEO method will emerge and change the paradigm once again. Interesting indeed.

  • 3e Onlinemarketing

    Alternative for Adwords? Seo:) it's good or not?

  • http://www.freeimages-photos.com FreeImages-Photos

    This is a very interesting article. Perfect timing as I'm considering an ad for a new site. I've used Facebook in the past, and I did get more clicks from that campaign over Google adwords at a lower cost.

    AlanBleiweiss – I'm glad you mentioned Bing! One of my sites appeared quickly on Bing compared to the others. I'll look at their ads.

  • Articleresource

    I was really thinking on using adwords but with the budget i have, i dont think i can use them at all, I'm thinking about the other options like Fb Ads and BSA.

  • http://www.andykuiper.com Andy Kuiper – SEO Vancouver

    I spent a lot of money on Adwords (and did quite well), however over time 'overbidders' and those willing to settle for low ROI eventually creep in and make things messy. So I learned everything I could about SEO. I wished I'd done it sooner.
    Andy 🙂

  • Toni Dalmau

    .. small business without Google, sounds good but what about countries, like Spain, were Google has 95% of internet searchs, right now it sounds unbelivable.

    Bottom line, if you do not appear in Google you do not exits.

  • http://pulse.yahoo.com/_CU2RX3I2XZQ2BX36VWS6PG2TYY Joseph

    Agreed that CPC in adwords is higher than what it was before. And for small business, it is indeed hard to stay on par with advertiser who have a bigger budget.Considering that small advertiser have a budget of $250 a month which might be the daily budget of a larger advertiser.

    So what can this small advertiser do, sacrifice their ad rank to get more clicks or get 5 to 10 clicks a day with lower ad rank in adwords.They need to find other search engines or social media which can give them more clicks and conversion.
    I personally feel that the traffic that a paid search drives into your site might be much more valuable than any other source. And PPC gives you instant result but SEO will need time to get you to the top of the organic listings. There are other sites that you compete with and SEO can't guarantee that you will always be on top.

  • http://yournetbizmentor.com Andrew

    You could use banner advertising using google adwords on the content network, I have had good results as little as 1p per click

    • http://twitter.com/alphaprojectllc AlphaProjectStudios

      I agree, Google Display Network is a good alternative for small businesses with limited budgets.

  • http://ronaldredito.org/blog ronaldredito

    I haven't tried Adwords myself because of the high rates because of too much competition. But I found success in alternative sources of traffic.

    One could gain as low a 1 cent per click or even lower. Good thing is that you can get targeted traffic, much more targeted than Adwords itself.

    • Hostmastersna

      So why not say what you are talking about? Why put something like that up and not name a source? Are you full of it? I don't have time to go chasing pipe dreams. We are all very busy and if you want to comment and be helpful, add a little more detail to your claims

      • http://ronaldredito.org/blog ronaldredito

        You are F^%&ng rude man!

  • http://adventurecapitalism.com Biometrics

    Remember the old adage – “it's like charging for air and water” and we are being charged for air – aka cellphones, water aka bottled water and city water – likewise Adwords is a license for Google to print money… yep.. and lots of it.

    • http://findbiometrics.com Access Control

      You got that right!

  • http://www.ceriamultimedia.com sewa laptop

    Nice articles,, thanks

  • http://www.mcgarrellreilly.ie McGarrell Reilly

    The best way to deal with this problem is get seo training course for your staff, show them how to create high quality web content, and only use cpc marketing as their secondary weapon. this will reduce the cost of cpc but increase the traffic and roi ratio in a long run.

  • http://homesinpalmdale.info Steven Horton

    I've investigated Facebook ads quite a bit, and it seems that they have really low conversion rates. Pay per click ads don't seem to work, at least for my real estate web sites. 🙁

  • Whiteskies

    Adwords is too expensive by any stretch of the imagination. You need to spend at least $700 a month to get some return on investment. Google imposes minimum bids – that means it makes sure it gets a minimum out of bids. And I think if Google increases prices by 20% – they will start to lose customers. It is simple economics. If Advertisers can't make a ROI – they go to places where they are. I also think Google underestimates the volume of traffic that is required to make a sale. Often it is hundreds of clicks before a single person buys. I'd love to see Google go down. They are evil. Not good. Greed is never good. They will soon start to lose sales because prices are too high.

  • armando

    You are very right, Google have become evil like all large corporations and is just a matter of time to go down, just like eBay etc ………. Is better to be small like craigslist.com basic and simple.

  • http://www.amcoms.co.uk Andy Web

    I am convinced this is about to change! The circle is coming full circle adspend is becoming more affordable or more understood in terms of ROI so only businesses who have a good set of calculations will set up effective CPC ads.
    SEO is so competitive now it can be more expensive to try and get organic traffic.

  • http://www.creativeinvestigations.com Tracy S.


    You are so right. Can you recommend an advertising company that really works? Please advise.