Thursday, November 1, 2012

AdWords Made Little Sense for Business Owner

As I continue my mental struggle to understand the "brand new day" model of advertising alchemy represented by Google, here comes a cautionary tale from the New York Times about Paul Downs, owner of Paul Downs Cabinetry outside of Philadelphia.  He managed his own AdWords campaign, and from what I can tell, he was looking at all the right metrics and seems completely in tune with Google's new world.

To get to the bottom line of this story, Paul Downs Cabinetry makes high-end conference tables for corporate customers. His AdWords budget had been yielding good results until the Spring of this year, when his mix of inquiries shifted to a lower-margin modular conference table, while orders for the corporate units fell out of bed.  Mr. Downs seems to be a very number savvy business owner, and he couldn't figure out the issue.

As he checked with search engine optimization firms, they too couldn't seem to offer him any real economics for hiring them, and they seemed bereft of any meaningful suggestions, other than increasing his ad budget.

It turned out that Google's algorithms are driven by click rates, which wasn't a surprise to him.  The problem was that the education market was clicking a lot to look at his lower-end modular tables, but these didn't turn into click-through corporate inquiries or sales.  The algorithm switched his ad dollars to those times of day when the click rates were the highest, namely when education staffers were browsing and clicking.  By the time of day when his corporate prospects started browsing, his ads had stopped running, since they were directed to high click rate times of day.

His dollars were in the wrong place, despite the black box wizardry of the algorithms.  It turned out there was a fix by restructuring his program into several smaller programs.  I had a few observations.  Why should a savvy small business owner have to supply this much intellectual capital into a program whose whole basis is that it is smarter and learns?

It seems like the AdWords algorithms themselves should been able to see this difference between clicks that turned into click-throughs and those that didn't.

Those SEO consultants are an entire industry created by the Google's model.  The ones in Paul's story seem about as shady as penny stock brokers!

No comments: