Almost every Google Ads campaign has some form of budget limitation.
It may be as little as $20 or $30 per day, or it could be in the hundreds.
Let’s look at both cases…
If a Search campaign has a daily budget of $30 and the average cost per click is $4.00, you can only get 7 clicks per day. Over a 30-day period, that’s 225 clicks.
If 1 click in 10 converts to an enquiry, your result is 22 sales opportunities per month or one a day.
Let’s say you convert one in three; your net result is 7 sales for the month. If the average sale value is $1,000, your resulting revenue is $7,000 from a click spend of $900.
If just one click per day, 30 clicks per month, are for searches you shouldn’t have been found for, you have wasted 30 clicks. That reduces the number of valid clicks to 195.
In effect, your average cost per effective click has increased to $4.60, and the resultant number of sales enquiries has dropped by 3 to 19.
Converting one in three gives you 6 sales with a revenue of $6,000.
These irrelevant clicks have cost you $138 in clicks and lost you $1,000 in revenue.
These 30 clicks have, in effect, cost you $1,138 or $37.93 each.
That’s THIS month.
Next month, some of those irrelevant searches again result in unnecessary clicks. Say 10 were repeated, with another 30 new ones. This means you have had 40 irrelevant clicks meaning relevant clicks drop to 185. Your cost per relevant click has increased to $4.90 and your revenue is at risk of falling back to $5,000.
Carry this forward six months and you run the risk of half of your clicks being irrelevant. At this stage, following the same ratios, the number of sales has fallen to 3; your average cost per relevant click is now $8 and your revenue has fallen to $3,000 for an outlay of $900 in clicks.
Google Ads Don’t Work …
It’s at this point you say, “Google Ads don’t work” and chuck it all in.
Yet if you had engaged a professional agency to set up and manage your campaign in the first place, they would have reduced the number of irrelevant searches every month. This means your revenue would have stayed at $6,000 every month; and maybe even more, as the agency would have worked out which keywords, which adverts and which bidding strategies worked best.
More, a very interactive agency would have discussed with you how to improve the website experience to increase the number of conversions off the page AND helped you with sales scripts to increase your conversion rate from enquiry.
Over six months, $50,000 in revenue could have been generated compared with maybe $15,000 to $20,000 because your campaign wasn’t properly managed and there was no feedback from the agency. So, if the agency’s fees over that six months were $5,000, you would still be $25,000 ahead.
These figures are entirely realistic, we see this frequently in self-managed or poorly managed agency campaigns. One account we looked at had spent over $9,000 in irrelevant clicks over a 12-month period. That was close to 30% of their entire budget.