Can Google Ads Work for Small Businesses?

September 30, 2024

Google Ads may work for small businesses that can effectively reach their target audience. For Google Ads to work, small business owners should bid on keywords relevant to their industry. This ensures that their ads are shown to potential customers searching for their products/services. The advertiser should know how to choose the right keywords for their campaigns. They should focus on specific, long-tail keywords relevant to their niche. Advertisers should also use negative keywords to exclude irrelevant searches. 

Google ads could work for small businesses who implement geo-targeting. This strategy limits ad display to locations where your customers are. Local service-based providers should also leverage local service ads. These ads appear at the top of relevant local searches. It increases the brand’s visibility and draws potential customers within its proximity. 

Implementing Google ads strategies can be challenging for small businesses with limited budgets. They may not be able to compete with over 1.2 million Google Ads users. Limited budget could mean inconsistent visibility. Small business with narrow margins could lose more than what they could gain as cost-per-click might exceed profit. 

I used Google ads in the past. Although I got instant traffic from it, I realized it wasn't sustainable. I explored other business models and found one that leverages organic traffic, not paid. This article answers if Google ads can work for small businesses. I'll share my experience with Google ads and other business owners as well. The pros and cons discussed, plus strategies for running ads on low budget. 

Google Ads Can Work for Small Businesses 

Bean Heath believes Google ads can work for small businesses. Google Ads enables small businesses to compete with larger companies by allowing precise targeting, regardless of budget size. Google Ads provides detailed data on ad performance. This allows businesses to optimize their campaigns based on actual performance metrics. Even with a small budget, businesses can gather enough data to make informed decisions. They can use this to improve their campaign. 

According to this Reddit commenter, Google ads work if managed right. It's a short-term fix before you establish credibility online. 

This commenter argues that Google ads work in general. However, it's up to you to ensure you get traffic from it. New advertisers are prone to mis-configuring ads and campaigns. Without experience, they might waste budget on unqualified traffic. 

Google Ads Cannot Work for Small Businesses

Google ads can be too expensive for small businesses. The results might not be worth what you're paying. He realized the money he saved from not spending on Google ads is more than the potential business he might lose. 

This guy said you need to keep refreshing campaigns with exact match keywords. Google constantly removes keywords. You need to keep starting new campaigns every so often. 

Another one also agreed that Google ads don't work for small businesses. Small business owners might not keep up with its demands. 

This commenter ranted online after Google suspended his ads for supposedly violating policies. He said it's very hard to contest Google's accusations. If you don't have a marketing agency, you'll probably get banned. There's no opportunity to appeal to a fair system. 

This business owner tried other forms of online marketing. He explored Google My Business and local service ads. However, Google Ads was the only one that failed over and over. 

Pros and Cons of Using Google Ads for Small Businesses

Pros of Using Google Ads for Small Businesses

Google Ads allows precise targeting. With 90% market share, it has access to a vast audience.

Allows businesses to set daily and monthly limits. Average CPC on Google Search Network is around $1 to $2. It can go higher in competitive niches. 

Detailed analytics on performance allow data-driven decisions.

Google Ads captures users with high purchase intent as they are actively searching for solutions.

Regular updates and changes to Google’s algorithm levels the playing field for small businesses. 

Cons of Using Google Ads for Small Businesses

Incorrect targeting can waste up 20% of your ad spend. 

High competition in certain industries increases cost per click, sometimes up to $50. 

New advertisers are prone to misinterpreting data. This could lead to ineffective strategy implementation. 

Users are prone to ad fatigue. This results in low click-through rate. 

Algorithm changes can also disrupt ongoing campaigns. The performance can temporarily (or permanently) drop. 

Benefits of Google Ads for Small Businesses

  • Google Ads can level the playing field between small businesses and larger competitors. Small businesses that use Google Ads report 4.5% revenue growth compared to 3.3% for those that don't.
  • Google Ads increases the reach and visibility of the small business. With over 8.5 billion searches daily, Google has a massive potential audience. Google allows you to appear at the top of search results. 
  • Google Ads drive immediate traffic. SEO takes time to show results. 
  • Google Ads allows businesses to re-target past visitors. This strategy increases the CTR by 10 times higher than display ads.
  • Google Ads has powerful local targeting options. 76% of people who search for something nearby on their smartphone visit a related business within a day.
  • Google Ads provides detailed analytics, allowing businesses to track performance and ROI.

The Downside of Using Google Ads for Small Businesses

  • Google Ads can strain a small business's budget. The platform operates on a bidding system, so ad spend can quickly increase. Small businesses with lower budgets might be pressured to spend beyond their means for visibility. 
  • Managing Google Ads requires a deep knowledge of the platform. Many small business owners lack the expertise to optimize ad copies and effectively use extensions. Google Ads has over 100 different features and settings. This can be hard to master for newcomers. 
  • It’s time-consuming to run Google Ads. Businesses must continuously adjust strategies based on performance data. This is challenging for owners who juggle multiple roles within their company.
  • Google Ad results vary across different industries. Clicks do not always convert into leads or sales. This can discourage those who want quick returns. Conversion rates only range from 1% to 10% depending on the industry. The unpredictability can make it difficult to gauge ROI. 
  • Larger businesses with bigger budgets dominate popular keywords. This intense keyword competition pushes small companies to target less effective keywords.

How To Run Google Ads with a Small Budget?

  • Start with search campaigns. These often provide better ROI for beginners than display or video ads. Search ads have an average conversion rate of 3.17% compared to 0.46% for display ads, according to WordStream.
  • Focus on specific, long-tail keywords. These are typically less competitive and cheaper than broader terms. Ahrefs found that long-tail keywords make up to 91.8% of all search queries. It offers a great opportunity for targeted and cost-effective advertising.
  • Use negative keywords. This lessens budget wastage on unqualified clicks by excluding irrelevant searches. WordStream reports that using negative keywords can improve CTR by up to 100%. 
  • Concentrate your ads where your target audience is. Google reports that 76% of people who search on their smartphones for something nearby visit a business within a day.
  • Set up ad scheduling. Run your ads when your target audience is most active. A WordStream study found that the highest average conversion rates occur between 9 PM and 12 AM.
  • Improve ad relevance and landing page experience to lower costs per click. According to Google, ads with higher-quality scores have better ad options.
  • Use ad extensions in your campaigns. These free additions improve your ad's visibility and click-through rate. Google reports that ad extensions can increase CTR by 10% to 15% on average.
  • Set a conservative daily budget. Start small and gradually increase as you learn what works best for you. You can start with as little as $5 per day.
  • Use conversion tracking. According to Google, advertisers who use conversion tracking get 30% better ROI.
  • Consider automated bidding strategies. Once you have enough data, you can start optimizing budget allocation. Advertisers who switch to automated bidding see an average of 20% more conversions at a similar cost per acquisition.

Google Ads Expert Shares Strategies For Running Google Ads with Small Budget

Google Ads expert Aaron Young shares three strategies on how to run Google ads with a limited budget. He suggests setting a budget enough to gather data. This is crucial for Google’s algorithm to work effectively. According to Aaron, the bare minimum is to aim for at least ten clicks a day. Advertisers should target at least 200 impressions daily and set the maximum to 10,000 impressions monthly. He suggests starting with one service or product, ideally the most popular one. This approach avoids spreading the budget too thin across multiple services/products. It also increases the likelihood of a successful campaign. Aaron also suggests including a clear price in the ad headline. This eliminates those who cannot or will not pay your asking price.

What is the Minimum Google Ads Budget? 

Some businesses start with as little as $10 a day per campaign. There's no set minimum budget required to run Google Ad campaigns. You can start with any amount you're comfortable with. However, Google recommends a daily budget of at least $10-$50 to see substantial results. It’s the optimal budget to test and optimize campaigns without spending too much. 

The minimum effective budget for Google ads depends on: 

Industry and competition

Target keywords and their respective costs 

Campaign goals and target audience

Geographic location

How to Compete with Big Spenders in Google Ads

  • Focus on local shopping ads and emphasize the local availability of your products. This strategy attracts nearby customers looking for immediate purchases. Local shopping ads increase foot traffic and eliminate the need for shipping and delivery. 
  • Create concise, persuasive ad copies that directly address customer needs. Use extensions like call buttons and location maps to enhance relevance and engagement.
  • Optimize budget by scheduling ads during peak times. Analyze customer behavior and traffic patterns to determine the best times for ad display.

Google Ads Courses

Joey Babinaeu’s 30-Day Google Ads Challenge is an online program that teaches how to be profitable with Google Ads for CPA affiliate marketing. It is hosted by Powerhouse Affiliate. The program focuses on leveraging Google Ads for affiliate marketing, creating entry-point income pages for quick traffic, and  CPA strategies. It targets beginners in affiliate marketing and online entrepreneurship.

Google Ads Masters is a comprehensive online workshop by Oliver Pestalozzi, a former Google digital strategist. The course teaches participants how to start, manage, and optimize Google Ad campaigns. Pestalozzi has a background in multi-million dollar paid ad campaigns for Google clients. It covers essential strategies for building keyword lists, creating effective ads, and selecting optimal bidding strategies. 

I Make $50K Monthly Passive Income Without Paying For Ads

I make $50K monthly passive income without paying for ads through a business model called local lead generation. This biz generates organic traffic by building simple websites for local service providers. I tried paid traffic before but it's only short-term. Organic visitors are more likely to convert since they're actively looking for the products and services you offer. SEO efforts provide data on user behavior and preferences. This will help you understand your audiences better. 

conclusion-digital-marketing

I turned to local lead generation to achieve sustainable and long-term free traffic. Organic traffic is free once your site is ranking on Google. This method is more cost-effective long-term instead of ongoing paid advertising expenses. I've been in this business for over a decade. I'm one of Dan Klein's original students. Now, I coach over 7,000 local lead gen students with him. 

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Ippei Kanehara
Founder/CEO

$52K per month providing lead generation services to small businesses

Ippei.com is for digital hustlers, industry leaders and online business owners.

His #1 online business recommendation in 2024, is to build your own lead generation business.

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