I spent €200 on Google Ads so you won't have to

If you remember, in one of my past blog posts, I was talking about the fact that I want to try running ads for JustFax Online. In general, I don’t like ads. Something in the advertisement industry repels me. However, as I mentioned in that blog post, for some products running an ad campaign can actually benefit. And so I spent €200 on Google Ads, so you won’t have to. Let’s see what happened.

Segment properly

The first time I ran the campaign, I did a mess. I targeted multiple countries, with multiple speaking languages. This led to a lot of irrelevant clicks.

I wanted to target the US region, as well as some non-English-speaking countries. So I created one campaign, in English, and set the target audience to US, and few other countries who speak English and non-English. This turned out to be a bad decision as it’s preferably better to segment the audience with different campaigns. Not only it lowers the cost (more on that in a moment), but also generates clicks that are more likely to convert.

Second thing I didn’t take into account, is that the same keyword, but with different target audience—will have a different cost. This is why it’s important to segment properly.

Think about acquisition cost

When users started to flow, I got so happy! I had orders, made refunds, improved the system. But I forgot one small thing—I pay more per click than I make from converted customers.

This motivated me to try and lower the cost as much as possible. Since I don’t operate on a recurring subscription model, this means that I either need to have a very tight budget, or explore other channels of customer acquisition. Speaking about budget…

On daily budget

I’m not entirely sure how the whole advertisement system works, but from what I understand you bid for ad placement. This means that Google, and other ad networks Google work with, will determine in real time the highest bidder for a particular keyword/search term. If you win the bid, your ad will be placed. This means that your daily budget is not set in stone, and your CPC (cost-per-click) is not constant.

For some days you will pay more than your daily budget, sometimes up to 2x more, while on other days you won’t reach your budget. Same goes for CPC. Some clicks will be more expensive than others.

What Google does guarantee is that you won’t pay more than your daily budget times 30 days, per each month. So if your daily budget is €10, you won’t pay more than €300 per month. But it’s not evenly spread among the days. Some days you might get more traffic and pay more, while other days you get less traffic and pay less. So just keep an eye on it.

One more thing about daily budget. I was experimenting with different daily budgets ranging from €20 a day, all the way down to €2.5 a day. It’s important to note that every time you change your budget, Google does bid strategy adjustment. It takes anywhere between 3 and 5 days, and during that period your bid strategy is not optimal. So make sure to let it finish the strategy adjustment before jumping into conclusions. This is indicated in the status of the campaign.

1 out of 10 out of 100

Now, lets talk about conversion. My current click-through rate (CTR)—the amount of people who clicked on an ad as a percentage of total impressions—stands on 8.5%. That’s roughly 8 click per every 100 impressions.

My conversion rate is hard to tell, because I didn’t actively track conversions. I can dissect the traffic and make assumptions which will lead me to about 5% conversion rate. This means that out of 100 people who clicked the ad, only 5 made a purchase.

If I round the numbers a bit, out of every 1000 people, I got around 100 clicks, out of which I got about 5 sales. This means that my conversion rate from impression to purchase is 0.5%. It’s a bit lower, as I’ve heard of 1% number, but it depends a lot on how optimized the campaign is.

Campaign optimization

Google has nice tips to help you optimize your campaign. Some of them are useful, while others are just annoying (like the advertiser verification, which I never completed, and I doubt it affects the placement strategy). I would put attention to things like: keywords, titles, and descriptions.

I never had a perfect 100% campaign score, but I was around 82% most of the time. Keep in mind that more keywords is not necessarily better. Remember, your ad is not shown every time someone hit a keyword you are targeting, hence you might spend your successful bids for low performing keywords. It’s better to focus on fewer keywords, but ones that have bigger potential to drive sales.

Another tip is to pay attention to trademarks. I’m not entirely sure how it works, but when I tried to target keywords like “fax with paypal”, I got a warning that some of my ads are limited due to trademarks in the ad description (in that case: PayPal). So keep an eye on that, and make sure to remove keywords that might limit your ads.

In addition to all that you can also set up ad schedule. If you target the US, you might want to target US waking hours, instead of wasting your budget on a 3am guy who accidentally clicks your links while searching for “jet max”, but misspells it with “just fax”. The example is made up, but you get the point. Your goal should be to play with the parameters as you go, in order to squeeze the maximum from your daily budget. Monitor your campaign, analyze the data, and iterate.

Summary

I was terrified to start with Google Ads. When I first saw the recommended daily budget, it was around €300 per day, which means around €9,000 per months. As a bootstrapped solopreneur, I don’t have that money to blow on ads. But even if I did, I’m not sure whether it would be the best use for that money. This brings me to two lessons:

1. You can have a daily budget that is 10 or even 100 folds less than what Google recommends. It will drive less traffic, and less sales. So don’t afraid to start with less.

2. Ads are not for everyone. When you get into ads, you need to think about the LTV (lifetime value) you will get from your customers. My SaaS is a one-time use: people come, send fax, and go. They might return, they might not. If I make $4 per fax, but it cost me €10 in ads to acquire that customer, I’m loosing money. If, however, you operate on subscription model, or sell a very expensive product—your LTV might be way higher, and the cost of ads might be justified.

Oh, and the interface for Google Ads is terrible. It’s so bad, that I honestly don’t understand how people use it. And it’s not only Google Ads, I peeked at Meta Ads as well, and the interface is terrible as well.

One last thing. Google Ads is not the only place where you can advertise. More platforms exist such as: Meta Ads (which includes Facebook and Instagram), Reddit Ads, and even in Google Ads you can target different products such as Search, YouTube, etc. It’s important to understand where your target audience is. I doubt that people who want to send a fax online, hang out on Instagram, but if you sell a physical product, or a digital “guru”-like course—Instagram might be more suitable for you.

If you like this kind of content, I share my progress on a semiregular basis on Twitter and Mastodon, so consider following me there as well.