When setup properly, Google Adwords can be a great investment for your business; those first three words were the most crucial.

I speak to limousine companies’ everyday who have tried out Adwords only to have spent hundreds or even thousands of dollars and gotten very poor results. Most of the time, it was the owners themselves who setup the account, or a brother/nephew/cousin that is a little more internet savvy than they are.

This is not to say that a business owner can’t setup his own Adwords and be successful, however I have found this to be the exception, not the rule.

Search Term Reports… wait what?

When I audit an Adwords account, I can usually tell how well an account is setup by looking at their last 30 days and viewing the “Search Term” report. Google actually lets you see what a small portion of searchers are actually typing in to find your business, which can be very revealing.

Here is an actual search term report of someone I audited:

Ouch. As you can see, the actual queries people typed in that lead to clicks on his ads were not what he was hoping for. Out of the 9 search terms, only 4 were relevant to his business. In those 5 queries alone he spent $410 in clicks and this search term report goes on for pages and pages. If I had to estimate, I would say that 80% of his total spend was on completely irrelevant clicks.

It is no wonder some people have such disdain for Adwords. When setup incorrectly, it can cost you a TON of money.

It’s All About the Numbers

The beauty of Adwords—and most online marketing platforms—is they allow you to track exactly how much you spend on a “conversion.” A conversion can be a variety of things, but for limousine businesses it is typically either a phone call, or a contact form. The goal is to get your cost per conversion down as low as possible.

The majority of business owners I speak with have no idea on what they spend on a conversion. Sometimes I feel like Marcus Lemonis from the TV show “The Profit,” where he berates business owners for not knowing their numbers. If you don’t know what you spend on a lead, how can you decide if Adwords is a good investment?

Let’s run some quick numbers…

Say you get conversions for $10 each, and you typically book 1 in 5 leads on average. That means you spent $50 for the customer acquisition.

“But Mark, why would I spend $50 on a job that is only $150 total?”

Well, that all depends on something called CLV, or customer lifetime value. It might or might not be worth it, and only you can decide. Say that you average job is $150, so for 10 jobs you make $1500 but have to pay $500 to get those jobs.

Doesn’t sound like a very good deal, does it?

Well, let’s go one step further…

Let’s say 1 out of every 10 jobs is a new client that uses your services once a month for that same price ($150). That would mean an extra $1800/year.

So now it becomes $500 to make $3300, which still might not be great, but what if one of your other client refers you to their friend or business partner? See where I’m getting at?

Again, this is an over-simplified example but illustrates a point; the math is never as cut and dry as one might think.

Is Adwords Right for Your Business?

Only you can decide if Adwords is the right choice for your business. Just be sure that your campaign(s) are set up properly!

Want to find out if your campaign is set up correctly? Just drop me an e-mail atmark@limoagency.net and I’d be happy to take a look!