Are You Gambling Away Your Marketing Dollars?
Are search engines the Casinos of small business owners?
Imagine your car breaks down.
You call AAA who sends a local tow truck and you get taken to an auto repair shop. At the same time, another car is being towed into the same auto repair shop. Both broken cars - one yours - sit in front of one open bay. The owner of the auto repair shop comes out and says, I can only take one of you, the one who pays me the most. Let's starts at $500. Then he waits for you and the owner of the other car to start out-bidding each other to see who will get their car fixed and get on with their lives that night.
What would you do?
Many of us would chase after and stop that tow truck before it left because we would want to go somewhere else, right?
Why?
Because it's not right to pit another person or business up against each other. That's not what we're used to. If we have a problem, we want a solution that works at a fair price.
But pitting businesses against each other is exactly how some businesses runs their pay per click business.
More on that in a moment...first I want to comment on commodity marketing (we'll be doing a lot on commodity marketing because that is at the core idea of what's wrong with marketing today.) Through our posts, we'll show you how all of your marketing problems are simply symptoms of a much deeper problem.
That problem? Commodity Marketing.
And the worst part of commodity marketing
is when the few advertising properties that have worked for business owners in the past now treat those same business owners as commodities. That's not good business even if you're in coffee or tea. Business owners face the challenge of being seen as a commodity more and more these days. Our customers want to turn us into commodities (that is if we let them by not showing them our unique story which drives our competitive edge). Certainly, those "competitors" who lower the margins and play short cut games with their industries don't help either.
But back to those search engines
5-10 years ago general search engines worked for most competitive businesses that wanted to get into pay-per-click. Remember, pay per click is not the organic results. PPC are the ads that are on the top and bottom of the search results and where Google makes 96% of their money from. But things have evolved by separating the haves from the have not businesses and the reason for this is simple - Google and others have no rate card.
But where's the rate card?
Problem is with all other respectful forms of advertising, there exists a rate card. A pricing sheet so that everyone knows how much you are charging or, more importantly, the max that you charge. Even the Yellow Pages had a rate card! Not with Google. No rate card. Google's prices are set by by the businesses themselves as businesses bid against each other for each specific search and search keyword at that moment. Google has even made it seem fun on the backend as you place your bids and see how high up you can get by paying this amount or that amount. Are you starting to see the lights of the Vegas Strip?
That's why the house always wins
And the big businesses sitting at the table wins with them. When the price per click gets so out of control like it is today, the only businesses that can compete are those businesses that have the cash flow and the infrastructure to acquire a customer at a loss. Yes, a loss. Then they make it up on the back end after they have won the customer. This isn't so easy for a local small business to do. They simply don't have the resources to go around to acquire a customer at a loss. Yet, small business owners are spending a lot of time in the Google casino and wondering why it's not working.
It's not the business owners' fault
It's also probably not the fault of the adwords manager they hired. Whether it be the big corporation or the marketing guy working out of his garage. You know those sales reps that you may have (silently) called all kinds of names in the book because you thought they were all liars when they said they could help you with your search. After you paid them, you could never find your business on google and you certainly didn't get your money back. Believe me, they were doing their best, they just didn't see it coming either. It's the dealer who's to blame.
What about the management fees I paid those companies?
We'll cover ad management fees in another article, but you're right, some blame can go on companies who were charging you secret management fees of 40%, 50% and even higher percent. Those you can call names. They deserve it! By the way, if you still are in a contract, look up to see if those management fees are actually in your contract. If you can't find any mention of management fees, call me. I will help you find out what you're really paying to acquire a customer.
Am I saying you should not be on Google?
Obviously there's a value there and certainly there are risks in running a business and if being on Google ppc is one of those risks you must take, do it. But hedge your bets. How? More on that in future posts of telling your story and creating a unique competitive edge.
Until then, I hope some revelations have hit home here, namely
Commodity Marketing makes businesses owners and their valuable products into commodities
Valuable advertising companies treat businesses like commodities by pitting them against one another
Know how much your paying to acquire a customer with commodity marketing. Are you going into the negative right from the start?
Do you know how much you're paying for your search management fees?
Hope you find this info useful on what to look out for with some marketing options out there. We'll be back shortly to help you hedge your bets and also break free entirely from the casino if you choose.
