Why Every Business Needs to at Least Consider Google Targeted Ads Google is ubiquitous and its ad targeting is uncannily accurate but many smaller businesses have to weigh carefully if that is the right place to invest their ad budget.

By John Boitnott

Opinions expressed by Entrepreneur contributors are their own.

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Successful businesses consistently search for new ways to reach customers, not only through new channels of communication, but through the channels they use each day. Google, as one of the top tools used by consumers everywhere, has the attention of almost every brand. If they can find a way to reach Google users through their searches, businesses realize they can increase brand recognition and bring in new customers.

Google has worked hard to make sure its paid ads deliver real value to business. This keeps companies paying for the service even when they could get clicks by deploying organic campaigns. Here are a few things your business should know about Google's targeted ads.

Related: How to Use Targeted Advertising on Facebook and AdWords

Different types of targeting.

When a brand uses Google to reach out to customers, that brand wants to know that it's reaching those who are most likely to make a purchase. Through contextual targeting, Google delivers a business's ad to customers who are likely to be interested in it. Ads are matched to those customers who have shown an interest in the same type of products or services in the past.

Google also offers placement targeting, which puts relevant ads on the sites your customers are likely to visit. This includes RSS feeds, videos and mobile websites. Remarketing targets customers who have viewed items on your site, delivering ads for your business as they're visiting other sites that are part of the Google Display Network.

Cost is flexible

Worry about cost is holding some businesses back from using Google targeted ads. What those businesses sometimes don't realize is that Google's pricing is decided using an auction process. Businesses set the price they want to pay for an ad spot and that price is compared with other advertisers when an ad spot comes open.

Brands have three choices of ad types to choose from. They include cost-per-click (CPC), cost-per-thousand impressions (CPM), or cost-per-acquisition (CPA). With CPC, you pay only for the clicks you get, while CPM allows you to bid per thousand views. CPAs let you pay only when a click leads to a conversion. These options mean you'll only pay for results, which maximizes your spend.

Related: 3 Ways Customer Data Allows for Pinpoint Marketing

Not ideal for everyone.

As valuable as Google can be to businesses, the truth is that the platform isn't for everyone. According to one expert, small businesses may find it difficult to compete with big-spending brands shelling out hundreds of thousands of dollars each month on their ad campaigns.

Small businesses are generally much more conscientious about their advertising budgets, with more thought given to ensuring each dollar spent brings a customer in return. Large brands aren't that accountable for every dollar, which puts them at an advantage. Because they can spend freely on the platform, they often dominate ads, making it impossible for smaller brands to compete. It's important that small businesses realize this before putting a large chunk of their ad budgets into Google targeted campaigns. That money could be perhaps better spent on social media ads or organic efforts.

Required to be competitive.

Despite its issues, however, Google ads may be necessary for brands to remain competitive. When a business's competitors are using the service, even the smallest business may find customers simply can't find it without having at least a small Google ad presence.

To maximize their ad spends, small businesses should carefully watch their analytics to make sure the money is leading to legitimate clicks. If those clicks convert, the expense is worthwhile. Over time, however, if a business's sales aren't coming from Google targeted ads, a brand should reevaluate its advertising choices and find a more lucrative path.

Google's targeted ads are a great way for brands to reach customers. However, the platform isn't for businesses of all sizes or industries. By understanding this, businesses can maximize their ad dollars, finding a resource that fits their own customer bases.

Related: What Digital Ad Agencies Need to Navigate the Future

Wavy Line
John Boitnott

Entrepreneur Leadership Network VIP

Journalist, Digital Media Consultant and Investor

John Boitnott is a longtime digital media consultant and journalist living in San Francisco. He's written for Venturebeat, USA Today and FastCompany.

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