Before the recent recession, Google Adwords was viewed by many as a pot of gold. The mantra was “Put your ads up and there’s no limit to the number of leads or sales you’ll receive.”
That’s all changed now thanks to the recession. Make no mistake, Adwords has become a dog fight.
When the recession hit, the first impact I saw was advertisers bidding very aggressively.
Desperation was in the air.
Companies threw large amounts of money and hope at Adwords. For many it was the last chance for survival.
It was particularly noticeable in geo-targeted campaigns. One national client of ours competed with local vendors. The small guy was fighting for his life and wasn’t going down without a fight.
CPCs in the $5-$10 range rose to $15-$20. He was prepared to spend whatever it took to survive – or until he was out of money.
Some advertisers are prepared to duke it out at those levels, but our client wisely backed off. They have the measurements and tracking in place to know when a lead is a lousy lead, or a sale is clearly unprofitable. Eventually I expect them to move back in to those markets when the little guys go out of business – which many undoubtedly will.
Another impact the recession had on Adwords was it forced clients to pay a lot more attention to every aspect of the conversion funnel.
Pre-recession, the conversion funnel was something clients agreed made sense but never got round to implementing.
There were too many other priorities in-house to justify the additional resources need to implement landing page changes. And it always struck me as odd that the one thing they could do to boost sales pretty quickly took a back seat year after year.
But the recession shook all that up. Clients saw a decline in leads and an increase in CPA. Then they got religion. As a rabid advocate of conversion optimization, it’s been heartening to finally see the increasing implementation of landing pages and call tracking. Clients now have a much improved and visible Adwords program and truly get the importance of tracking from keyword to sale.
Too bad it took a recession to rock the boat, but now we’re in a new mode for Adwords. Clients are tracking better than before. Campaigns have become more efficient and more profitable.
As the recession pitted advertiser against advertiser, guess who was making money? Yip, the big G.
What a terrific business model, virtually recession proof!
But now that we’re almost out of the recession, it’s great to see that it’s not just Google making money, it’s the advertisers, as it should be.