5 Reasons Your Business Should Not Advertise on Google AdWords Unless you have everything lined up just right, Google AdWords is a surprisingly efficient mechanism for losing money.
By David Rodnitzky Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
I'm a huge proponent of advertising on Google AdWords – indeed, my entire business career has been dedicated to helping companies grow through search engine marketing (SEM). As much as I love AdWords, however, there are a lot of companies for whom AdWords simply will not work. I've identified five reasons you shouldn't advertise on AdWords – reviewing them before you launch a Google campaign could save you some serious money!
1. No one is searching for your product
A search engine is a "database of intentions," meaning people use search engines to find something specific. They don't browse search engines like they do a news web site, Facebook or Twitter. If you are selling a new widget, the odds are low that people will be searching for your product on Google.
Imagine being the marketing manager at TiVo when it launched. What words could you buy on Google -- "alternative to VCR?" If you have a new product, or simply sell something people don't search for on Google, you will waste a lot of time building an ad campaign on Google that will never get any clicks. And, as every business owner knows, time is money!
Related: 10 Things Nobody Tells You About Google AdWords
2. Your economics are not as good as your competitors
AdWords determines which ads show up for a given search, based on an auction between advertisers. To overly simplify this, if you bid $1 and ten other advertisers bid $2-$10 each, it is unlikely you will get any clicks on Google.
If your competitors sell the exact same product or service that you do, but make two times the margin on every sale, they will be able to outbid you for plum searches. This means that you will either not get any clicks, or only get clicks on keywords that your competitors don't want. This generally means AdWords will neither be scalable nor profitable for you.
3. You don't understand search engine marketing
Search engine marketing is easy to do but hard to do well. If your plan is to check out a how-to book on AdWords from the library and then launch your AdWords campaign, you will likely cost yourself a lot of money.
There are many, many nuances to running an effective AdWords program. If you don't have someone on your team (or an agency) with years of expertise, you are almost guaranteed to lose a lot of money advertising on Google.
Related: Common Google AdWords Mistakes and How to Avoid Them
4. You don't have the right conversion funnel
Having a great product and a terrible web site is like spending millions of dollars on an awesome Super Bowl ad but leaving the doors locked at your store when customers show up. Success with AdWords requires a great conversion funnel. The ad text, the page a consumer lands on and the checkout or form submission experience needs to give that consumer confidence that you are the right merchant for their needs.
5: You don't have a good offer
If your competitors sell a blue widget for $5 with free shipping and you sell that same product for $10 with $5 shipping, the best AdWords strategy in the world will not be successful. It is simply too easy to click on the next ad and comparison shop. Note: if you have a great brand, you may be able to get away with uncompetitive offers, but even that is a challenge!
Advertising on Google is no longer a secret. The odds are high that your competitors are already running AdWords campaigns. As a result, effectively competing on AdWords means that you need to at least be equal to, and hopefully better than, the competition.
Most of the factors I've described are really gut checks to determine how competitive you are vis-à-vis your rivals. Do you have the right margins? The right marketing chops? The right Web site? The right offer? If you can answer yes to all of these questions, not only will you have great success on AdWords, you'll also have a superb business!
