Should you advertise your local business on Google?

In today’s digital age, finding a way to get your business found on the web has become an essential part of any business marketing strategy.  This is true not only for the major corporations who spend millions marketing their products or services, but also for small local businesses all over the country.  Considering that 73% of local purchases are influenced by online and mobile interactions, strategically and adequately investing in a strong online presence is required to get your business to the next level and earn the revenue your business is capable of earning.

Google AdWords is a self-service marketplace solution that allows businesses to advertise their website next to Google search results.  Featuring ads based on targeted keyword searches helps maximize the possibility that customers searching for your type of business will come across and visit your website.  To determine if AdWords is a sustainable advertising channel for your business, you need to determine the costs and benefits of the program.

What does Google AdWords cost?
Operating under a pay-per-click model, Google Adwords charges your business a certain dollar amount every time someone clicks on your ad.  Google releases very little data related to the average cost per click, but it is estimated that the average click costs about $0.59, with the most expensive keywords going for as much as $54 per click.

The amount you pay for every click is determined by your bid. Google AdWords does not have a minimum budget that you have to spend, and you can bid as low as you want.  However, bidding a low dollar amount limits you to being featured if competitors bid more since it is an auction model.  You never pay more for a click than your max bid.

For Google to make sure their users see appropriate ads they also take into account relevancy. Google decides how to rank your business by multiplying your max bid by your quality score. Quality score is a ranking Google gives your business website for each possible keyword, based off of the click-through-rate, page relevance, and quality of your landing page.  The number produced is considered your ‘Ad Rank’ and the highest ad rank receives highest placement.

The price paid per click is determined by taking the Ad Rank of the site below you and dividing it by your quality score.  After adding a penny to that total, you have your pay-per-click costs for a given keyword.

You should also note that the cost and time allocations associated with successful AdWords implementation can be very high as it is a dynamic marketplace with competitive bids constantly changing.

What are the benefits of Google AdWords?
The most attractive aspect of AdWords for many local businesses is the ability to target ads directly to people searching for keywords related to your business.  When considering Google’s 67.5 percent share of the search engine market, the ability to pay for premium placement among the most relevant searches to your business can be highly valuable and result in higher quality exposure and new customers.

In addition to targeting your ads based on keywords, you can further specify your exposure based on a number of other demographic options such as location, gender, age, and even family status of the person searching.  Essentially, you can narrow your paid placement to ensure you only show up when people who meet your target demographic are searching for specific keywords.  This will ensure that those being exposed to your business are much more likely to be potential customers and, thus, will increase your return on investment.

Local Marketing Mistakes

Should you invest in Google advertising for your local business?
The pay-per-click model can be effective for some businesses.  Especially if your business relies heavily on website traffic then Google AdWords could be a great fit.  The ability to show up at the top of specific Google searches while also being able to further segment your exposure leads to high quality traffic for your site.  If you are able to convert those leads into customers, it could mean a great return on your investment and the additional exposure your business is looking for.

That said, as a local business you probably care more about offline traffic than online traffic, which means that you need an advanced approach to converting website visitors (that cost over $1 each) to new customers in the door.  You should therefore not yet engage in any online advertising like Google AdWords before you take care of the essential online marketing aspects first.  For example, have you claimed and optimized your free online listings on Google+, Facebook and Yelp?  What do you do to capture every interaction with potential and existing customers?  And how do you engage these customers to convert them to new customers and eventually valuable repeat customers that become advocates of your business?