The Collapse of Google Ads

If you've been advertising on Google Ads for a while, you have probably felt 2024 to be harder or painful or performance is down and you don't know what the heck's going on. Right. What is happening or you think Google's fleecing you, which is probably happening, or something else. Right? You're trying to figure it out now. I run a Google Ads agency here at grow my ads. We have 100 plus clients. So I get to see a lot of different industries, I get to see a lot of different cl. I also have a free community called PPC Launchpad that's in the description below. And there's I think close to 2,000 people in there. So I get a lot of questions, a lot of messages there and I get to see lots of different industries and scenarios taking place. I will say 2024, I've been in the Google Ads game for over a decade. 2024 has been rough. I'm dying out here. It's been hard. I think it's hard, harder today to operate a Google Ads account than it was a few years ago when you could run alpha beta structures, manual cpc, skag, ad groups, et cetera. You had way more control. I think as Google's taken control away and really pushed into this idea that hey, just let us take the reins and automation will take over and you know, we've got all the AI and smart machine learning that, you know, this will be an easy thing now. It's not now. I don't think it's just Google. I do blame Google for a lot of what I'm seeing and what others are seeing. I do think there are some macro pressures out there. I think we are in a bit of a softer economy. But you can't just blame things, right? You know, there's that story who moved the cheese, right? The cheese is moving a bit. So what do you do? How do you manage your advertising? Or if you run an agency or you're a freelancer, how do you navigate tough periods of decreased performance when it's not a tactical issue? How do you navigate that with your clients? If you run a business and you're managing Google Ads in house, whether it's yourself or you have a marketing internal person running it, how are you navigating the decrease in Google Ads? Are you banking on everything? Are you just upset each month because your Google Ads performance is down? This is what I'm seeing from a lot of businesses and I think this is just an incorrect way of going about it. And there's a lot that can be done to improve performance not just on Google Ads, but within your business. So I want to talk about what we're doing at Grow My Ads with Our Clients. I want to talk about what I do with my own personal consultations with my inner circle of clients that I work with one on one and what I'm consulting and recommending to people that come to us just for general advice with, whether it's account audits and just conversations with other entrepreneurs. This is how I'm looking at it. And maybe I'm wrong, but I just wanted to give you what I'm seeing, what we're seeing here at Grow My Ads as a team, and what we're doing about it. So let's just dive in. Okay, so first, the idea of this video actually came from a question inside of our free community called PPC Launchpad. This was from Tammy. I do an AMA once a month and so this was from September 2024's AMA. Tammy said, hey, and this tough first question to answer. I would like advice on something that no one is talking about, which is conversion slowdown. Everyone is saying that it's because the economy has slowed, but that is not it. And the reason why I know is because organic leads are surpassing my Google Ads leads, which has never happened before. I believe the target CPA is rising because of extreme increases in Google Ads cpc. So even though I raised my target cpa, the account never seems to fall function as well as it did. And these are accounts that are three, four years old. They've produced hundreds of conversions. This has also happened across various industries, not just home home service businesses. Something is definitely going on and I refuse to believe it's just happened to my accounts. I'm seriously considering starting these accounts over and doing max clicks or manual cpc. I really need to get some good guidance on this. That was a tough first question answer I have, by the way, if you want to listen to my full answer, it's in the September 2024AMA, a video on our YouTube channel and it's timestamp Tammy and it was a great answer or a great question by Tammy. Tough one really to answer. But that is what got me thinking about the idea of this video because I, you know, I ranted in my answer to her and I wanted to do a more sort of cohesive video regarding this topic. Let's start with a few pieces. Okay. 1. Google Search CPC up 13% year over year Ad Spend growth slowing. This is a article on Search Engine Land which is reputable publication this was in April of 24 of 2024. So pretty recent data. And they're saying, listen, you know, CPC is up 13% year over year. That would be obviously across everything, whatever sort of data points they have in regards to that. CPCs are up. This one's pretty wild. CPCs are up 40 to 50% for retailers in the past five years. Okay, so if you've been in this game for five years, you have seen on average an increase of 40 to 50%. That is crazy. Right? And it's really, really hard to continue to operate how you did four to five years ago. When you have this inflation going on in your cpc. Now this is where rabbit holes you can start going down, conspiracies you can start talking about. Right. It's a conspiracy. Part of this is increased competition. Yes. What happened in the last five years? Well, we had something called Covid, right? So Covid happens and boom, Internet purchases go crazy. I mean, all of our E commerce clients went nuts. In fact, you would think that would have helped us as an agency. It didn't. I had many E commerce clients shut ads off completely because they could not keep up with shipping. They were like two, three, four weeks behind on shipments. Like, we can't do this anymore. We have too much volume coming in. We need to shut ads off. So it actually impacted me during COVID and running an agency and having those type of clients. Right, okay, so this, this takes place, then people come back, start spending again and yes, so I think there's increase in advertising naturally within Google Ads. However, their Google Ads is in an antitrust case right now. There's been some whistleblowers. Google quietly increases ad prices to meet targets claims executives. So the search engine reportedly raises prices up to 10% without informing advertisers. Okay, there is something called a floor price, right? Google sets this price. So if you are in, we'll just say the mortgage industry and mortgage keywords are obviously going to be in the finance sector. Okay, Google, you could be like the only person advertising on this is highly unlikely in this scenario. But just roll with me here. Let's say you're the only advertiser on the search term home loans. Tampa, Florida. Okay. There's literally no one else advertising on that in Tampa, Florida. And you, you know, you are a mortgage broker in Tampa and you're bidding on that keyword. That doesn't mean you pay just a penny for that click, right? No. Google sets a floor price. Hey, home loans, this is in the finance sector. They're bidding this in Tampa Bay, Florida. Here's what the floor price is. So they set a floor price. This is what you got, this is what it's going to cost just to pay to play to get an ad up, right. Even with zero competition. And then when competitors come in, their auction based system kicks in from there. So if you were the only advertiser, you literally would just be paying whatever the floor price is in that scenario. But they set that floor price. So in that case let's say it's 10 bucks, right? So you would have to pay no matter what $10 for a click in mortgages for that term even if you're the only advertiser. Now it's a high. There's no industry that I know of right now that has zero advertisers in it. So you know, it's very unlikely that there's not some competition with just about any search term. But what Google did, or at least this whistleblower is claiming is like hey, you know, we got to just kind of crank up those floor prices. And that's what they would do. They would quietly just crank the floor prices up. That would increase cpc. That was not competition, that was not a natural competition factor that caused that increase. That was Google just increase in their price. Just like if a brand decided hey, instead of selling our, you know, Arizona tea for 99 cents, it's now going to be a dollar 25. No, God, please no, no, no. Well they did that but you and I don't really get to see that. So they did that behind the scenes without advertisers being aware of it. So that increased costs. Now it just takes one simple Google search for Google Ads revenue and you can get all kinds of data. Here, look at this. So this is advertising revenue of Google from 2001 to 2023. Look at this continued growth. Okay, so Google as a company in my opinion no longer innovates. Right. It's more, more like they've just been optimizing. So Google was great five plus years ago in fact we were, you know, a premier partner agency partner with them. I've been out to California, I was at a party with John Legend that was hosted by Google. So like they, they did all these crazy things. They were truly supportive to advertisers and agencies. If you had a problem, they would help you fix it. Then there was a pivot many years ago where the support no longer was real support. It started to become very salesy, always be closing and every rep started saying very similar things. So they started Pushing certain things. They want more YouTube ad revenue. Guess what? They're going to be pushing YouTube ad spend across all the advertisers. Us, as an agency, we had agency reps out of New York City. Those reps became no longer support, but again more salespeople. So we started feeling this. Today, I won't even talk to a Google Ads rep. There's a few good ones out there I've come across, but most of them I just ignore. They all, they're. They're all scripted salespeople at this point, in my opinion, based off of my experience with them. But that was not the case many years ago. And so there's. There was this pivot within Google Ads organization in regards to even the support system of advertisers and agencies, which any of you have had to deal with that Google support in the last several years. You've definitely have felt how terrible it is and then how pushy Google reps are. And all they care about is pushing their latest campaign type or whatever they want and pushing you to spend more money. So there's been this like, and, and really the innovation stuff that's coming out, even like pmax and stuff, it's really. I. It doesn't seem like they're listening to advertisers and it just seems like they're really trying to optimize and continue to sell their unused inventory, their junk inventory, in my opinion, to continue to try to get these increases that they're getting, it's going to get harder for them to continue to increase ad revenue moving forward, in my opinion, without doing what they're kind of doing. So shareholders are happy. I'm sure the executives are happy based off the financial numbers they're seeing. Advertisers are not. Advertisers are being squeezed. Right. When your CPC are up 13% year over year, what does that mean? That means you cannot spend the same amount of money you did last year and get the same results you got last year. Right. You literally would have to increase your budget 13%. And it's never this clean of math, but you would have to increase by 13% to bridge the gap. Now, because your cost of doing business with Google Ads is up 13%, you can't buy the same amount of traffic you did last year with this natural increase in CPCs. And again, I say natural, but we know Google's behind the scenes and they've cranked up some costs on us. So they are fleecing advertisers on 100%. Right. Okay. And the economy Feels soft again. I'm not a macro economist by any means or claim to be, but based off what I'm seeing, it feels soft. Now certain industries are being impacted more. We have clients in the furniture industry. They're getting absolutely wrecked. But furniture is just down due to the fact that Covid skyrocketed sales. And now we're coming. It's a mean reversion. So we're coming back down and we're just coming back to reality. This is what the, the landscape is for furniture purchases in October of 2024. It's not what it was several years ago. Okay. So we have to navigate that along with increased advertising cost. So what the heck do you do? Number one, if performance max is not working for you, I get this question a lot. Then pivot. Try standard shopping. Try going back to manual CPC if you have to. If you're feeling this pinch and you just a continued decline, then switch. Try going back to standard campaigns. If you're on standard campaigns and you haven't tried performance max, give it a shot. You have to keep testing. Best practices are just best practices, right? That doesn't mean it's going to be best for you. I have clients that PMAX does not do anything for. And we run standard shopping, we run standard search, we run DSA campaigns, we run standard remarketing. I have accounts where we tested PMAX after running a very well optimized standard structure. And PMAX is doing better for us. So you have to test. There is no one size solution for everyone out there. Then this is a conversation I have with my clients all the time. Hey, you were operating at this specific return or if you're going off a roas, this was your roas. If you're going off of a mer, you're looking at your entire company as a whole. Your Mr. Was this last year. CPCs are up, right? Cost of doing business on Google Ads is up. Are you willing to increase spend to bridge that gap that you're probably going to start seeing decreases because if you do not spend what you did or if you spend what you did last year, you will not get what you got last year due to the fact that costs are up. Are you willing to spend more? Are you willing to analyze your financial data and are you actually at a moment right now where hey, does it make sense to be operating at the numbers we're operating? Should we be actually decreasing the return we're willing to go after? Should we actually get more aggressive? And in some cases the answer is no, you shouldn't you should actually be working on efficiency right now. It's all going to vary depending on who you are, what your business is and where you're currently at. Okay? So the number one thing I talk to businesses about right now though is stop blaming the advertising. It's hard. It sucks. I get it sucks for me as an agency, but you can't just say, all right, Google Ads is down, we're down. Right? Start working on your business. And many business owners I talk to today still are not doing that. So yes, Google Ads is down compared to last year or two years ago or three years ago. You cannot magically just fix that. And in some cases, literally the campaigns are dialed in, they're optimized. And I'm telling them this, this is not a tactical issue. This is a macro issue. What does that mean you should be doing? Start working on your business. Don't think ads is it. Ads should not be your whole business. That should not be where all sales are coming from. That should not just be where you have all of your focus. Right. What are you doing with conversion rate optimization right now? The amount of crap websites I still encounter is mind blowing. In 2024, they'll spend $50,000 a month on ads and not a single dime goes to improving their website. Even just the speed of it could improve the conversions that they get, but they don't. They're just not doing much there. Right. And I get it's a lot of hard work and it's expensive, but if you're spending any money on ads, you should also be focusing on how do you optimize post. Click right. So what are you doing to work on your business? What is your offer? What are your competitors doing? What's your competitor offer? What can you do that's unique in the marketplace compared to your competition? When's the last time you've analyzed your competition checkout process? What's your checkout process like? What is your value to your customer currently? What's the customer experience like right now? Can you improve upon that? Are you doing anything to continue to get reviews, positive reviews? I can't tell you how many companies will complain about their ad results. I'm like, dude, you got a three star like aggregate review rating on Google customer reviews. Out of literally like 50 reviews or 100 reviews, you've got, you have. Well, yeah, but we're, you know, sometimes orders just don't come in and people work on it. You can't operate at A3. Okay? People are not going to want to continue to do business with a poor reviewed company, work on the. That. So I know I'm rambling and I know this is a giant rant, but I've, I've wanted to address this topic and, and I know I'm doing this in a way that's a bit off the, off the cuff, but if you take anything from this, it's yes, ads. Google Ads costs are up. Google Ads performance is probably down for many of you year over year or looking through the past couple years. It's not one thing, it's many things. Yes. Google's fleecy, Neil, what are you going to do about it? They're a monopoly, right? You just got to work with what you got to work with. They are trying to continue to make infinite money and growth for themselves and you are getting fleeced as a small advertiser. You can complain. They're in an antitrust lawsuit now, so we'll see what comes of that. But you've got, you have to just work with what you have. You got to play in the arena that you're playing in. But there are things you can control. You can't control what Google does as an organization. You, you can't control what they do to the CPCs, even if it is total bullshit. What you can control, though, is your own company, your own offering, your website, your checkout process, your customer experience, your customer service, the reviews that you get from your customers, that social value and proof that then you can show to future customers. People don't just click and buy. They're going to navigate, they're going to, they're going to sit there and compare you to the competition, do competitor analysis. What can you do better than them? What offerings can you create that are better? How do you improve on your current offering? That is how you move forward. Google Ads is nothing more than a customer acquisition tool. Okay? There's a lot of things that can be done post click, and that is my rant to everyone today is work on. Post click, work on improving what you can do within your business. Google, you got to operate as you can. Sure, there's going to be a lot of unoptimized accounts out there. Come get a free audit from us, we'll tell you if it's good or not. I'm as upfront with anyone as possible. I do not. I could care. I know I'm not going to get your business. If I say your account's really good, it's not your agency's fault or your internal person's fault. You have no Tactical issues. I, but I'm not in the business of trying to lie to people to get their business through these audits. Our audits are there to just tell you where you're currently at. And then if you want to hire us, good. If not, I hope I at least provided value to you. So get an audit. If you need to get some 30 even, even if it's not from us, go hire an expert, have them audit your account. If your account is pretty well optimized, then it's not a tactical thing. You got to start working on this macro stuff, navigate what we're going through and you do that. And the companies that do that, I think will only be stronger and continue to grow over the next few years. And so keep testing. Again, if certain campaign types aren't working for you, like performance Max isn't working, move to standard campaigns, test standard campaign. You have to keep testing. But what you can't do is, and I see many businesses do this, they just complain. They complain, they complain, but I'm not seeing any action being done. Working on your business, start working on your business. The game is hard, but this is where you can start dominating. Because a lot of people are too lazy to actually work in a climate that gets hard, right? So the people who are willing to gut it and the people are willing to really work on the nitty gritty hard stuff will come out better, I think in the next few years. Hey, you just listen to that giant rant. Maybe some of it, probably not all of it. However, if you're like, hey, I don't know if my Google Ads account though is optimal. And yes, I should be working on my business and the macro stuff, but I actually think my ad account's not good, well then go get a free audit from us. We offer that if you qualify. That's in the description below. And again, you don't have to do it from us. Find someone else to do it. Get a third, an expert third eye view into your account and see is your account optimized? Because if it's not, then sure, there's plenty of opportunity for you there. You know, I've done a thousand plus audits and I still, I still see a ton of really, really bad accounts. This message, obviously a big rant is really towards those who are struggling and they know they're doing the right things. They know they have optimized accounts or campaigns that were working, they're just not as well anymore. So this rant was more about that. But if you do feel like, hey, I there's a lot of work tactically that should be going on within my Google Ads account. Go get an audit or I've got a lot of great value on this YouTube channel. Check out further videos. Once this ends, there's going to be a few video recommendations for you, like how to set up a search campaign the right way or the complete performance max course that I did. I spent, you know, three months building that out. It's totally free, several hours of content. Go check that stuff out if you want to get more value. Want to get into the weeds and see do I have tactical issues with in my account. So that's going to be up next. You're going to see recommendations here on the ending slide. Go check some of those videos out or go get an audit. If not, I'll see you in the next video. Thanks.