The Google Ads Myths That Drive Business Owners Crazy – Google Ads prioritise big advertisers over small businesses

This is the second post in a series about common myths surrounding Google Ads. The aim is to not only tackle the myth but also give small businesses some insight into how Google Ads works and to better optimise their accounts.

The myth that we are going to tackle today is:

Google Ads prioritise big advertisers over small businesses

Some small businesses feel that Google Ads favor larger corporations with bigger advertising budgets, making it difficult for smaller businesses to compete effectively in the same ad space.

Google Ads operates on an auction-based system where advertisers bid for ad placement and compete for visibility. The placement of ads is influenced by several factors, including bid amount, ad relevance, ad quality, ad extensions, historical performance, and more.

While it’s true that larger advertisers often have larger budgets and may be able to bid higher amounts for ad placement, Google’s ad auction system is designed to be fair and prioritise ad relevance and user experience.

Concerns that we hear from many clients is that other larger advertisers ads are always showing higher than theirs on keywords that they deem to be important for their business success.

This raises two topics:

  1. Ensuring a good Return on Investment
  2. The misleading nature of random checks on the search listings

Ensuring a good return on investment

It is important to know what your competitors are doing and to compare your product/service to theirs in terms of the quality/value of your offering and also to understand your pricing comparative to the other available options in the market and finally to understand how competitors are marketing their products using their website content and ad content.

But otherwise, when it comes to Google Ads (and many other digital marketing channels) it is best not to look sideways too often, concerning yourself with why their ad always seems to be above yours on a certain keyword. Instead focus on improving your own return on investment through a better product/service, the communication and design on your own website or app and your own marketing strategy.

With an improved ROI you will be able to invest more in your advertising to topple competitors from the higher positions in search.

The advantage that larger, more established businesses have over smaller incumbents is that they have an existing customer base who may repeatedly purchase from them regularly. The larger businesses can reach their existing customers using low cost marketing channels such as email marketing, SMS and remarketing. This means that they have a steady income at a low cost.

This higher level of sales through an existing customer base can mean that they can invest more in acquiring each new customer which may mean that they do not need to achieve the same ROI on Google Ads as a standalone channel as a smaller business may need to do to run profitably.

Here is a very simplified comparison:

Of course Big nasty Corp will have higher overheads with more staff, a fancy office, benefits etc etc.

But this table shows how a larger player in your market has the resources to be more aggressive on channels like Google ads and can live with a poorer customer acquisition cost than a smaller business.

There is no easy solution to this – it requires patience and the belief that steady growth will bring you closer to your goals.

Also – as a small business ourselves I do enjoy the feeling of being an underdog and needing to be creative to try and optimise every part of the business to be as efficient as possible in order to compete with larger players. If you can consistently better serve the new customers than the larger players you will win in the end.

The misleading nature of random checks on the search listings

It is a massive waste of your time to go onto Google and type in your coveted keywords and see where your ad is positioned compared to the competitors.

A few reasons why:

  1. Google Search results are all personalised to each user based on their preferences and past search behaviour – If you search the same keyword all of the time and then never click on your own businesses ad then Google will assume that you have seen the ad multiple times but never clicked so are definitely not interested. They will therefore position your ad lower than others. Especially if you click on competitors ads to cost them a few quid 😉
  2. Because each search is personalised and Google are constantly learning about the interests of their users through testing they will show ads in different positions to learn what resonates best with each of their users. It is never the case that a specific brand is always in position 1 on a keyword – except upon their brand name terms.

How to check on your average position

Google stopped reporting on average position in September 2019. Now we use impression share and the various impression share related metrics to identify share of market at a keyword, ad group or campaign level.

The below example is at a campaign level but if you want to check how your keywords are doing comparatively to others then check the impression share of the keywords to understand your visibility. See the final 4 columns here:

If you see a low search impression share (4th column from the right) and are concerned about it then look at the more important metrics such as the cost per acquisition or the return on ad spend to see how the keywords are doing in line with your business goals. If you have a good ROAS or good CPA and a low impression share then that is great news – you can scale up profitably through increased bids and budgets or through loosening your automated bidding strategy targets.

Google’s primary goal is to provide users with relevant and valuable content. Advertisers, whether big or small, have the opportunity to compete in this auction system based on the bid amount, ad quality, and relevance to the user’s search query or browsing behavior. Often as a standalone channel we find that smaller businesses achieve a better ROI than larger businesses on generic keywords because they are more focused on the channel and need it to be profitable.

Small businesses can effectively use Google Ads by focusing on creating high-quality ads, targeting the right audience, optimising keywords, landing pages and websites, and managing their budget effectively.

If you have any questions on this topic then please leave a comment or also contact us via the Contact page.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.