Google’s AdWords is an amazing business: an intrinsic part of the pricing model is that prices automatically rise to the maximum level the market can support. As a marketer, that means Google isn’t leaving much on the table – what economists call “minimal consumer surplus”.
But there’s a flipside: the maximum the market can pay also means AdWords delivers the lowest utility the market can bear. Unless you stick to the shadows of ultra-rare keywords in undiscovered market space, the service is always priced just below the level where it’s not worth it.
So what does that mean for small marketers like us?
First, it’s that AdWords will be expensive. Eyeball for eyeball, for instance, it’s pricier than a superbowl ad, and much more expensive than local radio. (Radio is always one of the best deals in media, incidentally.) If your market’s restricted by geography, as most consulting-type businesses are, take a look at traditional media: a 5,000-envelope snail mailing may well deliver better results than AdWords. The rule in this space is that “something happens” – a client turns up, a big new booking arrives – about once every thousand customer touches; expect 4-6 projects from your 5,000. Such a mailing will cost north of £3k, so you need each project to be over a grand to make it worthwhile.
(Of course, most consulting work comes from repeat business; find guys you get along really well with and they’ll still be paying you a decade later. That’s where the value is; a £3k mailing that brings in £3k of billable hours isn’t a breakeven, it’s an investment. Because one of those guys will like you enough to use you again.)
But AdWords still has value for a small marketer. Namely that it’s easy to control. You can create, change, and test ad executions in two shakes; dial your budget up or down; experiment with different times of day or sets of keywords. But because you can get started on a budget of a few pennies a day, many marketers make the Big Mistake of thinking it’s a cheap option.
The trick to making it function is to work backwards. Let’s take some figures.
Let’s say you’re in my business: a jobbing copywriter. I’ve got some built-in advantages – a decade in the world’s top agencies gives me some heft, while parallel skills with buzzwords like predictive analytics and information architecture position me a few rungs up from the average ex-agency type. But by contrast, being a lone wolf by nature means I’m hopeless at the schmoozing and networking that leads to new client contacts. While working at a higher pay grade, I’m fishing in a smaller social pond.
So key is to know what you’re looking for. A “good client”, for me, is a midsized company (up to 250 people or £50m in turnover) doing something interesting but complex. (Often you find these in the technology or financial sectors.) These tend to be companies where internal marketing resources are stretched, or who can’t afford the £80K+ cost of a senior marketing director… giving them an incentive to make good use of outside resources. (With the absolute minimum cost of employing a junior professional being £30k+, they can afford a much more senior person on a part-time basis, especially one who doesn’t need a desk.)
So what does it take to win a £30k client with Google Adwords? Answer: at least £5,000. That’s a budget that puts you in the top few percent of all AdWords spenders.
Of course, you might get lucky. But I’ve done it half a dozen times over the years, and on average, a big new client – the sort who pays a retainer for an agreed set of services month after month for a year plus, a client you can learn and grow with and give ever more value to as the journey progresses – will cost you £5,000 to acquire and another £5,000 in resources to retain. (The second £5k: we’re talking pitch projects, meet-and-greets, learning curves and outright freebies. I shortcut part of that with my free £1000 offer.) That’s £10,000 you need to invest for every new client win.
That’s why most freelancers don’t make any money. They just can’t make the investment.
Let’s look at the figures. My ideal client profile describes perhaps 15,000 companies in the UK, perhaps 50,000 across Europe. That’s surprisingly few in a zone that contains tens of millions of businesses, even given that my capacity is about 4. With half the world’s population using Google, you’re going to waste a lot of clicks and pageviews before any of them stumble across your value proposition. Count on a campaign running for three months before you get a solid sniff.
In that time you’ll have a few thousand clicks and your ads will be shown several million times across Google’s Search and Display networks. It’s all worth it, but you have to make a lot of upfront investment before it pays off.
Because that’s Google’s value: once you get a real lead, it’ll really be a real lead. The gap between someone idly clicking your ad, and actually dialling your number for a chat, is a huge mental commitment. By the time someone’s heard your voice, the odds of them becoming your client are a lot better than 1-in-10. (Once I went a whole year with every single first contact leading to a paid project.)
But on average, count on every new longterm client costing a third of that client’s first-year gross to acquire.
AdWords. It isn’t cheap. But it has coverage. And if you make the investment, it pays off forever.