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!
