October 30, 2014

When Bigger Isn’t Better: How Small Companies Can Win at PPC

A while back, my colleague, Elisa Gabbert, discussed why SEO is harder for small businesses and came up with 10 reasons that big companies with their larger budgets can more easily succeed at organic search marketing.

You’d think the same would be true for paid search: huge PPC budgets. More hiring freedom, etc. Well, maybe it should be easy for big brands to kill at PPC, but they certainly don’t as a rule.

Below, I’ll explain why so many businesses of all sizes are failing at PPC, and how you can buck the trend.

The Single Biggest Cause of Failure in PPC

Recently, during a webinar, we asked a non-scientific poll of approximately 200 AdWords advertisers the following question:

How much time do you spend doing PPC work every week?

Respondents painted a very rosy picture. The overwhelming majority (87%) reported doing some activity every week:

win at ppc

But what PPC marketers say they do and what they really do are two different things.

To verify whether it’s really true that most marketers do some work in their PPC accounts every week, I used the Change History log in AdWords to manually check the account activity levels for 200+ businesses that recently became WordStream customers. For the date range, I looked at activity in the 30 days prior to signing on with the WordStream software. Here’s what I found:

win at ppc

The “Activity Index” on the Y-axis is a measurement of how active an advertiser is in terms of doing PPC account optimization, with more intensive optimizations (like creating a new campaign) given more weight than less significant optimizations (like changing a single keyword bid).

As you can see, even from this rough graph:

  • About 1 in 5 advertisers don’t even touch their accounts over the course of a month.
  • Only 1 in 10 advertisers consistently do work in their account over a 3-month period.
  • Bigger spenders are more likely to be regularly optimizing their accounts – but many companies spending hundreds of thousands or even millions of dollars are doing nothing at all on a monthly basis.

Leaving your account on autopilot is how even huge companies like eBay end up making fools of themselves in paid search.

How Small Companies Can Win at PPC

Slow and Steady Wins the Race

I believe the single most significant predictor of PPC success is not budget, but time put in. We’ve analyzed thousands of AdWords accounts, representing well over a billion in collective advertising spend, and found that the companies with the best results almost invariably spend more time working on their campaigns.

But wait, you say, PPC isn’t my full-time job. I’ve got other responsibilities on my plate.

The good news is, you don’t have to devote 40, 30, 20 or even 10 hours a week to PPC to be doing better than most of your competitors. Just logging into AdWords once a week and spending half an hour to an hour doing some optimization will put you in the upper echelon when it comes to account activity.

So what do you do with that half hour?

You do stuff like:

  • Splitting ad groups down into smaller, tighter ad groups to help improve Quality Score.
  • Pausing poorly performing keywords that are spending your budget without good ROI.
  • Adding new keywords from your search query report to the appropriate ad groups/campaigns.
  • Setting negatives to reduce spend on irrelevant terms that Google broad matches you against.
  • Raising bids on your best keywords, lowering bids on weaker terms.
  • Optimize for Mobile by creating mobile preferred ads and click-to-call extensions.
  • Trying out new ad extensions like offers, sitelinks and other features than can increase clicks and conversions.

Little by little, this stuff makes a difference. So don’t get discouraged.

Even small companies can make paid search work for them with a little elbow grease.

7 Comments ▼

Larry Kim


Larry Kim Larry Kim founded WordStream in 2007. He serves as company CTO and is the author of 4 Award-Winning Books on Software Development. Larry also blogs at the WordStream Blog and practices photography in his spare time.

7 Reactions

  1. Great read, wish I had seen this before we started LOL. Will share it for other small businesses starting out!

  2. Great article Larry! Many takeaways here for small businesses. In today’s PPC landscape, there is so much to keep track of and so much to do/test. And now with Google’s new enhanced campaigns platform looming next week it could be a little too much for the expert let alone the novice.

    We at JUST Results Marketing hope to bridge that gap and help small to medium sized businesses not only understand these options and changes but flourish in them.

  3. good post, I am learning a lot more about PPC and the use of negative keywords to reduce junk clicks.

  4. PPC has always been enticing. As a matter of fact, more and more businesses who are new to the Internet marketing industry are hasty to try it out. But alas! They fail. The key is to build a solid brand first. From there, you can start promoting.

  5. Nice job larry! i really like your article i will share it to other small business…

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