Does PPC Work For All Businesses?

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Matt Umbro started an interesting discussion last week with his post titled Why SMBs Should Not Run AdWords Accounts. He defines SMBs as advertisers with a budget of $500 per month or less, and says that’s not enough budget to compete and be successful.

Mark Kennedy wrote a detailed counterpoint on the topic called Paid Search Can Work for SMBs – Even the Little Guys! Both Matt and Mark’s posts were well thought out and made good arguments.

Believe it or not, I’ve been mulling this topic for some time, after I saw this question on Quora: Does Google AdWords work for all businesses? The answers to the question range from the ridiculous to the sublime, but one poster sums it up well:

“(Adwords) also only really works if you know what the hell you’re doing… It’s so easy to burn through budgets very quickly and pay for clicks from people who never had any intention of becoming a lead or purchasing anything from you.

All the clients I’ve had have attempted some form of PPC themselves, realised they thought it was simple but they’ve spent a whole load of money on something they don’t understand. I’ve then gone into the account, showed them the type of keywords people have entered which they have paid for – this tends to shock them because they thought they were bidding on exact match keywords. They also tend to lack conversion tracking (if there is no measure of what is success, how can you be successful?).”

I’ve written before about why inexperienced people should not attempt to DIY PPC. It’s too expensive and there are too many pitfalls, as the Quora poster says above. No matter what your budget, if you haven’t outlined clear goals and set up conversion tracking, Adwords or any other PPC program will not work for you.

But what about the small business question? Should small businesses use Adwords?

I’ve run small PPC campaigns a few times in my career. Some were agency clients, and some were side jobs I took on. I have to be honest: I haven’t found $500/month clients to be very profitable, for me or for them. In his post, Mark Kennedy offers several examples of small clients who used geotargeting and other tactics to their advantage.

That’s great, and it makes sense – but I’ve found that Facebook works much better in most of these instances. Clicks on Facebook are significantly cheaper than clicks on Adwords or even Bing, so your money goes a lot further. Even direct ecommerce or lead generation is more efficient on Facebook at small budgets, in my opinion. Matt Umbro also mentioned Facebook as a good alternative for small advertisers.

Mark Kennedy also talks about how to charge for small clients. This is where the problem lies, in my opinion. Mark says he charges about $75 per month for $500 clients. Even if you only charge $75 per hour for your time (which is low for this industry), that only gives you an hour per month to work on that client’s account. In his post, Mark says “Phone calls that are just a quick question turn into hour-long conversations. An email with one question turns into a trail of follow-ups.”

That’s been my experience as well – small clients are less sophisticated, and need more hand-holding. They often don’t understand basic marketing principles, much less the nuances of Adwords. They frequently have issues on their website that need troubleshooting – and lack an in-house developer to fix them, leaving me to answer web dev questions (which, trust me, is not a good use of their time based on my limited dev knowledge!).

So if you spend an hour on the phone answering quick questions, you’re done for the month – or you start losing money on a client that’s already paying you at the low end of the rate scale. It just doesn’t make sense to me.

Now if you’re running a small PPC campaign part time as an in-house marketer, and you have some PPC knowledge, a $500 budget might work. But in my opinion, there are better uses of your $500.

It’s been interesting to watch the conversation on PPCChat on this topic. What’s your take? Share in the comments!

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Comments

  1. Hi Melissa,

    Thanks for the mentions and your opinions on the SMB conversation. I agree with a lot of your points as well and the link to my article shows my counterpoints, so I won’t rehash. But I will say this – like your title states, it won’t work for everyone. There I 100% agree, there has to be certain situations that make sense for a small budget. But it can work for some, that’s my main point. I wouldn’t totally write it off and I think it can work more often than most people may think.

    However, based on conversations I’ve had with Matt, I do think there is a lot of potential in paid FB (and other paid Social media platforms) for SMBs as well. I just don’t think the platforms themselves are yet ready for SMB’s there are some short-comings. But again, “it depends” 🙂 However, we are testing it more and more, even for the little guys.

    And just as an overall statement, we are no longer just paid search marketers – paid social, video, remarketing, etc, has really come on over the last few years. Not that keywords are dead, I’m not on that bandwagon, but KW campaigns are not as dominant as they use to be. A topic for a another day…

    Good post!
    Mark

    • Melissa Mackey says:

      All very good points, Mark! Keywords are only one part of the mix anymore. We need to be thinking about what will best achieve the client’s goals. And you’re totally right that social PPC is even harder than Adwords to DIY. Thanks for your comment!

  2. From personal experience, PPC can work even for very small businesses. This digital content publisher has a budget of – wait! – only US$ 75 / mo.! But it earns very satisfactory ROI / ROAS, as I’ve highlighted in this case study: DIGITAL CONTENT PUBLISHER ACHIEVES 364% ROI (http://www.gtm360.com/customers.php#c112). So, it has been using it continually for 6 years. But you’re absolutely right that it makes little sense for a third party agency to take up such low budget campaigns. On that note, I remember reading a couple of years ago that Google introduced something called AdWords Express, a “lite” version that was meant for use by SMBs in self-service mode. Any idea what happened to it?

  3. Thanks for sharing Mark’s article! It’s a great read.

    I guess it really boils down to if you feel you can help successfully grow that $500/mo. guy into a bigger client. Personally, sometimes I’ll take on a challenge if I feel there is “light at the end of the tunnel”, but it definitely has to be considered on case by case basis.

    That said, I can definitely see why an Agency would be hesitant to take on such small players. Maybe I’m just a glutton for punishment 🙂

    • Melissa Mackey says:

      I don’t think you’re a glutton for punishment. I think that’s one of Mark’s points: small accounts can grow into bigger accounts, and can also lead to referrals and other good things for you as an agency or contract PPC manager. I know we’ve taken clients that were too small for our “agency minimums” when they had a big upside.

      That said, I’ve found just as frequently that small budget PPC accounts are often so hard to optimize (especially given time limitations as discussed in the post) that one of us finally ends the relationship. It’s hit or miss and you just need to understand your risk tolerance and also understand the potential for success/upside. Thanks for reading Cleofe, hope you’re well!

  4. Here’s my take on this topic – it comes down to margin of error. Someone who manages a big brand account with a big budget, despite knowing “best practise” may be really terrible with a budget under $2k a month. Why? Because that person is used to having a margin of error where $500 is nothing. Having a PPC blue chip CV might not make that person the best fit for a SMB. Yes, there’s always other ways to spend marketing budget but not all PPC skillsets are the same.

    Although the billable hour is generally a bad idea, if it’s for training that SMB to manage their own account, that approach can work for everyone. Not sure if agencies can keep their founders in nice things with that approach but for SMBs, I’d say look for training opportunities led by experienced PPC pros.

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  1. […] Does PPC Work For All Businesses?: What size of business is best for PPC? Check out this post to get another viewpoint on this debate. […]

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