Does Google Ads Work For Small Business In 2023?

Bidding on highly competitive keywords with a ton of search volume can get expensive pretty quickly if left to run without good management. Bear in mind that a click isn’t even a guaranteed sale or lead.

You may know your business in and out, but you might not know how your potential customers are searching for you.

Performing deep keyword research is critical for small businesses running Google Ads to ensure you’re showing ads for relevant searches.

‘Mens Trainers’ may have 1,000,000 searches a month, but ‘buy nike air max size 13’ may have 150. Clearly the 2nd term as way more buyer intent, and should be targeted.

During keyword research, you’ll discover negative keywords to add to your account. If you only sell Nike trainers, do you want to waste money on ‘Adidas’ terms? What if you’re a removal company based in London, do you want to show for Birmingham related searches? Adding negative keywords to your account is an ongoing task and saves small businesses a ton of cash over time.

How Much Does Google Ads Cost?

The amount of money small businesses choose to spend on Google Ads totally depends on their advertising budget and the keywords they choose to target.

Someone selling ‘handmade cups’ can expect to pay a lower CPC (cost per click) than say, a company selling ‘car insurance’. Why? Competition for both can be equally fierce, but the value of acquiring that customer is much higher for the insurance company. If you layer in LTV (lifetime value) of a customer into this, you can see why insurance companies are willing to bid very aggressively to acquire that customer.

Certain keyword terms will have a much higher volume of monthly searches than others – ‘Handmade Cups’ has on average 50 searches a month in the UK, ‘Car Insurance’ has 550,000.

Keyword research around meaningful, ‘transactional’ keywords and their intended audience is crucial when it comes to avoiding wasted spend on irrelevant clicks.

One of the best aspects of Google Ads is that regardless of ad budget, smaller businesses can compete with those with huge, uncapped budgets. You can show ads based on the same keywords – it’s just that your daily spend will be exhausted faster. With Google Ads you can be very precise with your demographic targeting (gender, age, income) so if you know at 18-year-old men are highly unlikely to buy your handmade cups, you can totally exclude them, saving you those wasted clicks. If you know that females in Putney are more likely to buy, you can apply bid adjustments to that location to better target them.

The cost of Google Ads depends greatly on what keywords you’re bidding on, the locations you’re targeting and your advertising budget. That said, if you’re an insurance company, £10 a day won’t get you very far based on the average CPC.

Let’s assume you’re a London-based Removal Company and you have a weekly budget of £1000 to spend on Google Ads.  At a £10 CPC, your ads would receive 100 clicks. If you spend £5 CPC you’ll receive 200 clicks etc.

But even within different industries, there are huge variations in keyword costs and average CPCs. A lot of other factors come into play like your website conversion rate when calculating your CPA (Cost Per Acquisition).

Look at this example:

• Based on a £10 CPC, if 10% of those 100 clicks enquired about a home removal job, you’d get 10 leads.
• Based on a £5 CPC, If 5% of those 200 clicks enquired about a home removal job, you’d get 10 leads

Great, right?

Not quite…

The difference between the above is that in the first example at a 10% conv. rate, you’ll be paying £10 per lead – but for 5% conv. rate you’re paying £40 per lead.

You can see how the CPC and the 5% or 10% conversion rate affects the cost of leads you’d be receiving each week.

The ability to ‘convert’ users into leads or buyers at a higher rate is critical – which is why we offer Landing Page design to all our clients.

Is Google Ads Worth It For Small Business In 2023?

Short answer: Yes.

The fact that over 95% of Googles’ 60 billion dollars annual revenue comes from Google Ads indicates that a lot of businesses are seriously investing in this platform. There is an average of £2 profit for every £1 spent on Google Ads across all industries according to a recent poll. We’ve worked with companies with 6-figure ad spend each month on Google Ads… and why not if it’s profitable for them? 

Another epic stat of the effectiveness of Google Ads is that their ads reach around 80% of ALL internet users, and Google earns 44% of ALL online revenue generated through advertising. Although impressive, these stats are useless to small businesses if their Google Ads campaigns are run without a solid strategy in place.

Google revolutionised online advertisement by introducing Adwords (now Google Ads) in 2000. It’s still the best and will continue to be, most direct online marketing tool available. But the success of a Google Ads campaign depends greatly on how you leverage the platform to specifically suit your business.

Mistakes in your Google Ads campaign can lead to a lot of wasted spend, frustration, and distrust in the platform. Small Businesses who aren’t experienced in this particular digital channel should be to hire a specific Google Ads Agency to help them run ads effectively, like us 🙂