The Alignment Saves Client £50,000 in Expected PPC Costs
By Stephanie Courtney
The Alignment Drives Significantly Lean Revenue
In July 2022, The Alignment saved a client £50,000 in expected Google Ads costs. Revenue targets were met. ROAS was over target by 30% at £13/£, spend was under budget by 21%.
This month, August 2022, the client insisted we spend the full budget – without any adjustment to revenue targets. They are on track to hit revenue, ROAS, and spend targets. This means they will spend 40% more to increase revenue 6% with ROAS right on target at £10/£. The marketing manager is concerned her marketing budget will be cut if she doesn’t spend it. This is the problem when spend is considered a KPI.
The Difference between Costs in July and August is what Google hopes most advertisers never understand - and agencies that charge fees based on % of spend will never admit.
In order to spend more in August (because we already run text and shopping ads for every sellable product on the site), we had to lower tROAS on Pmax campaigns, add broad match to our vigorously cultivated target keywords, and increase spend and dependence on Dynamic Search Ads.
In other words, we had to do what Google wants every advertiser and agency to do – we had to engage with Google’s colossal automation.*
Automation and broad match proliferation are making Google billions. Not that I blame them – Google Ads, even at their most expensive, are cost effective advertising for retail – but there are much more cost effective ways to use Google Ads.
Add to this mix, agencies that charge fees based on media spend, and you have huge disincentives to create and run the leanest campaigns possible (campaigns that not only drive high revenue, but in some cases can drive more revenue because they spend less). Agencies have to spend more money; it’s how they make more money.
Google Ads Automation is a Double Edged Sword
Before the upgrade Google made to AdWords in August of 2018, advertisers were forced to rely on agencies or consultants to avail of AdWords most robust apparatus. Reliance on a limited number of experts to proliferate Google’s advertising tools created a rather significant barrier to Google’s own revenue growth. So when they revamped the platform and became Google Ads, they automated a lot of what agencies and consultants used to do, and they significantly increased the reach of broad match terms.
With Google’s automated campaigns, someone with almost no Google Ads experience can set up campaigns and drive revenue – and for many online businesses, this is a boon – especially post Covid. With Google’s ‘Recommendations,’ novices can implement even more measures that allow Google to spend more.
Google figured out that increases in cost-per-click would never drive as much in spend as proliferation of ad serving beyond average keyword targets. This has as much to do with changes in search behaviour as it does with changes to Google’s ad serving because the two go hand in hand.
The upshot is Google is making a lot of money – money most businesses don’t need to spend – from unfettered automation and reach – a lot of which does not add value, and can even be detrimental to brands and websites that rely on quality messaging.
Now businesses need experts to curb and focus Google’s automation to run the leanest campaigns possible. This takes effort and expertise, but the best news is that Google still rewards effort – especially when it serves customers best.
The Bottom Line
In July, we saved our client £50,000 of expected costs in Google fees. Our fees were €7,500 flat fee per month plus a bonus of 0.05% of revenue – which resulted in a net savings of £30,000 in budgeted media spend and fees.
If running lean Google Ads campaigns is of interest, contact me at firstname.lastname@example.org
*Google’s automation is not the same as Google’s machine learning. Google’s automation is Frankensteinian – it doesn’t know how to use language or leverage customer intent. Google’s machine learning is precise, delicate, and can drive exceptional results. The two should not be confused with each other.
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If you’re interested in The Alignment Collective, give us a moment and take a look at our services:
- Executive contracts – takes all of the work and responsibility for Google Ads off your shoulders. The Alignment does all work, using all of our expertise. Our client sets KPI’s, and we reach or exceed them.
- Strategy contracts – that give you more control over messaging while using The Alignment’s strategical expertise.