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The Changing Landscape of Google AdWords

Over the past 4-5 years Google Ad words has become extremely popular among Australian businesses that want to drive more traffic and sales through their website.

The popularity of Google Ad words is not surprising when you consider the following facts:

  1. Google is clearly Australia’s most used search engine with 85% + market share
  2. AdWords allows you to instantly drive traffic to your website
  3. It is relatively easy and quick to set up a Google AdWords account

Google AdWords sounds like a licence to print money – right?

Not quite.  It is true that many Australian businesses have been successful and made a substantial amount of money generating new business from Google AdWords over the past few years. However, from my experience many of these businesses did very well when Google AdWords was first introduced to the Australian market and when there were high levels of search with relatively low levels of competition.

In 2007 the search engine marketing and pay per click advertising market has changed with an ever increasing number of Australian businesses competing for Google traffic. Slowly but surely the marketing budget that historically was allocated to Yellow Pages is being re-directed to Google and other forms of Internet marketing.

The shift in marketing funds allocation and the rapidly growing number of Australian businesses advertising on Google AdWords has seen the cost per click increase substantially in the past year or so. Many businesses that were paying 10-20 cents per click are now faced with the challenge of paying 5-10 times more per click.

In fact there are some competitive online industries in Australia today where the cost per click exceeds $15.

Most people I speak to are comfortable with the concept of paying 10-20 cents per click; however, they become instantly discouraged at the prospect of having to pay more than $1-2 per click in Google AdWords.  This reaction is understandable as the Google marketing budget for a business receiving 40 clicks a day has just increased from approximately $2500 to more than $12,500 per year.  All of sudden your Google AdWords campaign needs to be accountable and start delivering returns.

The scenario presented above is representative of the new challenge faced by Australian businesses who are trying to achieve a positive return on investment from their Google marketing.  In the new competitive search engine marketing environment many businesses have stopped their campaigns due to poor performance or have become suspicious of competitors clicking on their ads so their daily budget is reached and their advertisements no longer appear.

Just as the advertising competition levels on Google have increased in recent times so has the size of the opportunity available to Australian businesses. Today in 2007 more Australians are using the Internet – they have faster Internet connections, are spending more time on the Internet and are using Google when they search the Internet. All of these factors mean that your business has the opportunity to turn Google into a powerful new sales channel.

The time to take advantage of Google as a new sales channel is now. Even with increased click costs Google AdWords still represents outstanding value for money.  Once you get over the fact that you need to pay for clicks in the new economy you will quickly appreciate that Google marketing can provide better returns that any other form of marketing. If you placed a Magazine advertisement for $2000 and received 1000 responses you would be ecstatic. But $2 per click sounds expensive?

In the year 2007 there is still a huge opportunity for your business to be highly successful in generating profitable returns from your Google marketing. To achieve this goal you need to be targeted in your approach, closely measure your Google advertising and be prepared to invest the time in continuously improving the performance of your AdWords campaign.

The moment you become a little complacent you can bet that every month Google will change the design and features available from Google AdWords, so what used to work, no longer does.

If you want to stay ahead of your competition and at the leading edge of Google pay per click advertising talk to the friendly team at roi.com.au and we can review your campaign and provide suggestions on potential areas for improvement.