Understanding Google Ads for tradies and contractors

Matt from Trading Web Guys and The Sideshow Podcast discusses the intricacies of Google Ads for tradespeople and contractors, emphasizing the importance of understanding ad spend and conversion metrics. He highlights that many clients misunderstand the costs and dynamics of Google Ads, often leading to ineffective campaigns. Matt advises on setting realistic budgets, targeting specific locations to reduce competition, and improving conversion rates through strategic adjustments. He underscores the value of knowing a customer's lifetime value and offers insights on optimizing ad strategies. Matt invites listeners to explore further resources on his website and join a Facebook community for business discussions.

• Google Ads campaigns often involve misunderstandings about their dynamics, including how they are run and the necessary budget.
• Clients frequently believe a small budget, such as $500, is sufficient for a successful campaign, but this is often not the case.
• Effective Google Ads campaigns require proper education and understanding of budget requirements to achieve desired conversions.

"I recently had a client asking us this morning about a Google Ads campaign that he was running. It wasn't quite getting the right return out of it, and this is quite a common conversation that I have over at Trainee Web Guys as an agency."

• Many clients struggle to achieve the expected return on investment from their Google Ads campaigns due to common misunderstandings.

"Very often, people don't really get ad spend, and they think that, okay, I'm going to put 500 dollars into a Google Ads campaign. That sounds like a lot of money, but then when you break it down, it's actually not a lot of money."

• There is a common misconception that a small budget is adequate for Google Ads, but in reality, a larger investment is often necessary to see significant results.

• A critical aspect of running successful Google Ads is understanding the budget required to meet conversion goals.
• Educating clients about budget expectations is essential for the success of their advertising campaigns.
• The agency emphasizes the importance of aligning budget with campaign objectives to ensure effective performance.

"Clients that we choose to work with with Google Ads, we educate them, and we make them understand that you do need budget for these things."

• Educating clients about the financial commitment needed for effective Google Ads is crucial for achieving campaign success.

• The conversation with the client led to the creation of an email, which was then transformed into a blog post and eventually a video.
• This process demonstrates the progression of information dissemination from personal communication to broader audience engagement.

"I created an email sent back to this client as a result. I thought, you know what, this email should probably be a blog, so we've turned that into a blog, and then, of course, now you're seeing the video based which highlights what we spoke about within the blog."

• The transformation of content from an email to a blog and then to a video illustrates a strategic approach to sharing valuable insights with a wider audience.

• Ad spend is crucial for the success of advertising campaigns, as insufficient budgets can lead to ineffective ads and poor results.
• Many agencies may misappropriate funds, allocating only a portion to ad spend and keeping the rest, which does not contribute to achieving desired outcomes.
• Proper allocation of ad spend directly influences the effectiveness and longevity of ad campaigns.

"You need to have ad spend applied to these campaigns or in the examples I'm about to give you, you'll see your ads won't last long out too soon and you won't get any results."

• This quote emphasizes the necessity of allocating adequate ad spend to ensure that advertising campaigns are effective and sustainable.

• Some agencies exploit clients by pocketing a significant portion of the budget, which negatively impacts campaign results.
• Mismanagement of funds by agencies often leads to clients not receiving value for their money, as the ad spend is not used effectively.

"There are a lot of agencies around there that will take whatever budget you have, probably put half it in their pocket, and probably put half towards ad spend, which has absolutely zero bearing on results."

• This highlights the unethical practices of some agencies that mismanage client budgets, resulting in ineffective advertising campaigns.

• Conversion metrics are crucial for evaluating the effectiveness of advertising campaigns.
• An example scenario is provided to illustrate how conversion rates impact the cost-effectiveness of ad campaigns.
• The cost per acquisition (CPA) must be lower than the revenue generated per job to ensure a viable business model.

"Let's say, for example, you say, okay, we need an extra ten jobs a week, and the keywords that we're competing on are, let's say, $30 a click."

• This quote sets the stage for understanding how conversion metrics are calculated and their impact on advertising strategy.

"If we have a website or a landing page which is turning one out of ten visitors into a client, now that's not a great conversion statistic, but we're using real numbers here."

• The quote explains a hypothetical conversion rate scenario, emphasizing the need for realistic metrics in campaign planning.

• The economic viability of advertising strategies is determined by comparing the cost of acquiring a customer to the revenue generated from that customer.
• If the cost of acquiring a customer exceeds the revenue generated, the advertising strategy is not sustainable.

"Ten clicks is going to cost us $300, so effectively, we've got one job coming through which has cost us $300 to get that job."

• This quote illustrates the cost calculation for acquiring a job through advertising, highlighting the importance of aligning costs with revenue.

"For a lot of guys, that's not a viable business model because you're not charging enough to justify that outlay."

• The quote underscores the need for businesses to ensure that their pricing model supports the costs incurred through advertising efforts.

• Assessing the lifetime value of a customer is crucial for determining the cost-effectiveness of acquiring new clients.
• A higher lifetime value justifies a higher investment in customer acquisition efforts.
• Example: If a customer's lifetime value is $2,000, spending $300 to acquire them might be justified.

"What's the lifetime value of your customer because if you've got a lifetime value of your customer and understand what that is and it might be in the vicinity of, you know, say $2,000, then is spending $300 to get a $2,000 client worthwhile perhaps?"

• This quote emphasizes the importance of understanding customer lifetime value to make informed marketing investment decisions.

• Broad geographic terms are often more competitive and expensive in digital marketing.
• Narrowing down to specific suburbs or regions can reduce competition and costs.
• Targeting smaller areas can make ad spending more efficient.

"If you're going for the more macro terms like Los Angeles or New York or Sydney or Brisbane or Melbourne or whatever it is, they're quite expensive, they're quite competitive... if you could break them down into suburbs or regions or locations or municipalities or whatever it is, then you're reducing the competitive nature of that keyword or keyphrase."

• The quote highlights the strategy of targeting smaller geographic areas to optimize marketing budgets and reduce competition.

• Determine the number of jobs needed to meet business goals.
• Reverse engineering the required job volume helps understand current conversion rates.
• Identifying conversion rates allows businesses to strategize improvements.

"The other thing you need to figure out is how many of these jobs do you need and once you understand how many of these jobs you need and you can kind of reverse engineer the equation like we've done in the evening example just now."

• This quote explains the importance of understanding job volume needs and using reverse engineering to assess conversion rates and improve them.

• Analyze current conversion rates to identify areas for improvement.
• Strategies may include optimizing the website, ad copy, and overall marketing strategy.
• Aim to increase the efficiency of clicks converting into jobs.

"We're currently getting one job out of every 10 clicks, but this is costing us too much money. We want to get one job out of every five clicks. What can we do to improve that? How can we change the website? How can we change the copy? How can we change the ad copy?"

• The quote underscores the need to improve conversion rates by modifying various marketing components to achieve better results efficiently.

• Google Ads is an effective strategy, but understanding its dynamics is crucial to avoid pitfalls.
• Key factors include ad spend, customer lifetime value, job requirements, and target locations.
• The relationship between these factors determines the success of a Google Ads campaign.

"The dynamic between Google ads is that it is quite an effective strategy; however, there are some variables that can help you if it can make you come unstuck if you don't quite understand how that relationship works between ad spend, what your lifetime value is, if your customer, how many jobs you require, locations that you want to target, and you want to try to dominate."

• This quote emphasizes the importance of understanding the interplay between various factors in a Google Ads campaign to ensure effectiveness and avoid potential issues.

• The keyphrase curve is a concept that helps understand the dynamics of different keywords and their associated competition.
• Keywords and key phrases vary in competition, influencing the strategy for Google Ads campaigns.

"You can actually see in the article there a diagram that I created from a presentation years ago which is really about the keyphrase curve and understanding the different the dynamic of different keywords and key phrases and the competition that's associated with them."

• This quote highlights the significance of the keyphrase curve in comprehending keyword dynamics and competition, which is essential for optimizing Google Ads.

• Budget allocation is a critical aspect of Google Ads campaigns, requiring careful consideration.
• Targeting niches and verticals with specific examples can enhance campaign effectiveness.
• Proactivity and granularity in setting up campaigns are beneficial.

"We're also dive a little bit in the budget and we dive more into just areas that talked a little bit about niches and verticals with examples and how you can be a little bit more proactive when you're running trying to set up a Google Ads campaign into getting a little bit more granular."

• This quote underscores the importance of budget management and niche targeting in creating successful Google Ads campaigns, advocating for a proactive and detailed approach.

• The podcast and associated community offer valuable resources and discussions for business owners.
• Engaging with a community of like-minded individuals can provide insights and support.

"You can also join the free Facebook community which is an active group of at the moment close to 6000 global business owners having high-level conversations around business and I'm sure you guys will enjoy being part of that."

• This quote illustrates the value of community engagement and the benefits of participating in discussions with other business owners to gain insights and support in business endeavors.